New mobile iOS app available to download today!

Two weeks ago, we revealed a new version of the investor mobile app was coming soon. Today, we’re excited to announce that it has been approved by the App Store, meaning you can download the new version right now! Visit App Store.

The new Funding Circle mobile app for iOS 9 has been completely redesigned for investors, so you can access your account information quickly and securely when you’re on the move. You’ll enjoy:

– a fresh, new design for the new larger screen resolutions

– shortcuts for watching and bidding on loans

– improved user experience

– Touch ID and passcode enabled to make it easier to login

– updates for fixed rate changes to the marketplace

Screenshots of the new iOS app

4-inch (iPhone 5) - Screenshot 14-inch (iPhone 5) - Screenshot 2

 

4-inch (iPhone 5) - Screenshot 44-inch (iPhone 5) - Screenshot 5

Q&A with the mobile team

Before its release, we interviewed the team who have been working on the app. In case you missed it, read what Emma, Edu, Dallas, Ben and Rory think about the new app and what they have planned next.

1) What’s your favourite thing about the new app?

Edu: I really like the way data has been exposed through the new version of the app. For example, on the summary page, it is great to be able to see how my funds are distributed across the three different stages: available, bidding, or lent to a business.

Emma: I love the folding headers, where the images blur as you scroll up the screen.

Dallas: Knowing that there is a well-engineered structure inside which is based on solid architectural principles. Having the lower layers of the app made correctly helps all the animations built on top perform much better, and will be easier to maintain in the future.

Ben: The little things that have a story behind why they were chosen – like the effort the team spent debating and researching whether there should be five or six numbers in the passcode, or the way the business information cell has a set height that entices you to read on.

2) What was the most difficult part of the project?

Emma: Adding transparency to the bottom navigation bar was tough. It’s actually one of Apple’s default settings, but the other styling we added changed the default behaviour and we had to change multiple views to bring it back.

Edu: I think the most difficult part was planning at the start of the project. We sat in a room with white paper in front of us in order to define what could be improved and how we were going to do it. We started thinking of the different reasons someone would open the Funding Circle app, what they would be looking for, and how we were solving it on the first version of the app. There were several iterations of design and user testings which allowed us to progress from a user flow on paper to the final design and implementation. This has been a huge effort across several teams, and I truly believe it was worth it in order to offer the best experience possible to our users.

Dallas: Ensuring that we are focussing on developing the right features for the user, based on real evidence and user testing.

Rory: Having fixed rates on the marketplace is changing the behaviour of our users. We will be keeping a close eye on how users interact with the new app and will work hard to roll out the new features you want much more regularly than we have done before.

Ben: I agree with Rory.  The most difficult part will be deciding what new features we should add next.

3) What would you like to develop in the next iterations?

Emma: I’d like to see us implementing autobid settings or a secondary market feature, as I feel that these are becoming more important parts of the investor experience.

Edu: We are going to continue to be really proactive in listening to feedback from our users and making changes according to their needs. There are other features that I would like to see introduced. For example, being able to subscribe to notifications whenever a loan request matching certain criteria is listed; bringing the secondary market into the app; and probably the most immediate one, updating the iPad app to the new version.

Dallas: Implement some of the new features Apple have included in iOS such as 3D touch for extra user actions, spotlight search, Apple watch app and/or contextual notifications. These would be features that would be interesting to work on but we would first need user testing/validation to ensure our users would actually find them useful.

Rory: iPad – so we can expand and iterate on top of our existing component library. Doing so will allow us in the future to roll out new features across the two platforms simultaneously.

Ben:  I’m really looking forward to finding new ways to provide the most important information for customers at the right time – maybe something that tells you what has changed in your account since you last looked at the app.

Thanks for your time everyone!

Interested in using the app?

If you’d like to use the iOS app you can download it for free from the App Store. For those who used the first version, we hope you’ll notice a real improvement in performance and usability. 

Enjoy lending,

The Funding Circle team

Is banking about to be Uberised? November industry news.

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Beyond Banking: Alternative groups seize business from lenders

Marketplace lending platforms are growing rapidly, and commentators predict banks will suffer similar market share losses as those inflicted on traditional taxi drivers by Uber. Marketplaces make up a relatively small proportion of total lending, but the sector is booming and continues to grow by %100 year on year. And, by creating partnerships with banks, such as our tie-up with Santander, we are able to work together to provide thousands of small British businesses greater access to finance.

P2P securitisation is coming

CityAm predicts a securitisation of small business marketplace loans will take place sometime in the New Year, which would be great news for small businesses across Europe. This is a way for larger investors such as pension funds and insurance funds to lend across marketplaces, opening up small business lending even further. This follows an ECB paper which highlighted the importance of securitisation as a way of getting more funds to small businesses.

We can lead world in financial technology, Osborne tells City

At the Bank of England’s Open Forum, The Chancellor commented that he expects fintech to transform banking, from mobile payments to marketplace lending platforms. The government is fully behind this ambition with more than £100 million already pledged to the sector through the British Business Bank, which includes £60 million through Funding Circle’s marketplace since 2013.

Funding Circle launches first P2P investment trust

Last week, the Funding Circle SME Income Fund successfully raised its first round of money to lend through the Funding Circle marketplaces, and listed on the London Stock Exchange. In this first round, the SME Income Fund has accessed shareholders including asset managers, pension funds and private wealth managers, giving small businesses the opportunity to borrow from an even wider range of investors through the Funding Circle marketplaces. For more info, please read the blog or visit the website. There was further coverage in the Telegraph, CityAM and AltFi. The shares in the SME Income Fund have not been and will not be registered under the US Securities Act of 1933 and may not be offered or sold into the United States or to US persons.

Transcript: FT City Network

In an online debate published in the Financial Times, Samir Desai, CEO and co-founder, gives his view on whether the kind of backstop liquidity facilities available to banks should be extended to other institutions. Samir comments: “Companies such as Funding Circle, which connect investors and borrowers directly, do not pose a systemic risk as they do not conduct maturity transformation.” In the rare case that a platform does fail, there are S&P rated back-up servicers that step into service down loan portfolios. He finishes by posing the question of whether central banks will potentially use marketplace lending platforms as a way to stabalise the economy and get money to small businesses in the next economic downturn. Lending through a marketplace such as Funding Circle is an investment, not a deposit, so it’s important to understand the risks involved as your returns can go down as well as up.

How to bridge the small-firm funding gap

And finally, Bank of England figures suggest that small-business overdrafts have fallen from approximately £21 billion in April 2011 to less than £13 billion today. This article in the Evening Standard addresses the small business funding gap and discusses the different options for small businesses to access finance. Statistics published in the Peer to Peer Finance Association (P2PFA) show that cumulative lending, across all platforms, now stands at over £3 billion and is on track to hit £4 billion by the New Year.

News

Funding Circle SME Income Fund closes first round at £150 million

Today we have announced that the Funding Circle SME Income Fund has successfully raised its first round of money to lend through the Funding Circle marketplaces, and will shortly list on the London Stock Exchange.

Through the SME Income Fund, shareholders get exposure to Funding Circle small business loans globally across its marketplaces, initially in the UK and US and potentially thereafter in Continental Europe.

The fund will buy up to 35% of loans originated through the Funding Circle marketplaces, and will only buy whole loans alongside larger investors. It will therefore not directly compete with retail investors, and loans will be randomly allocated to the fund in the same way they are randomly allocated as whole or partial loans.

In this first round, the SME Income Fund has accessed shareholders including asset managers, pension funds and private wealth managers, giving small businesses the opportunity to borrow from an even wider range of investors through the Funding Circle marketplaces. This marks an important step on our journey to creating a global marketplace where any investor, big or small, can lend to small businesses across the world. A diverse range of investor capital will make the marketplace more sustainable, helping to protect small businesses in the future.

Currently we can only facilitate direct lending within each country due to different regulatory environments. In addition, the shares in the SME Income Fund have not been and will not be registered under the US Securities Act of 1933 and may not be offered or sold into the United States or to US persons.

For more information, please visit the website: www.fcsmeif.com   

This is not intended as an offer for sale of any securities, nor as a financial promotion.

The Funding Circle team

News

The new mobile app is coming!

We’ve been busy working on a new version of the investor mobile app for iOS 9 which we’re submitting to the app store in just a few weeks. Before it’s available for you to download, here’s a rundown of the things you need to know.

Why iOS?

As some of you may know, we launched a Funding Circle app for iOS in December 2013. iOS was the largest user group of the website, and this trend has continued. In October 2015, 25% of website traffic came through mobile, with 64% of this traffic coming from iOS devices compared to 31% from Android.

What’s new?

The code in the current (and soon to be old) version of the app made it difficult to build new features, so the team have re-built the app entirely. This will make it easier and faster for us to add new features going forward which the team plan to do on a regular basis.

For the first release, the functionality of the new app has not changed much from the current version, but you will notice:

app image

– a fresh, new design for the new larger screen resolutions

– improved user experience

– Touch ID and passcode enabled to make it easier to login

– updates for fixed rate changes to the marketplace

Who’s behind the app?

We now have a dedicated in-house mobile team: Rory, Edu, Emma and Dallas. We asked them a few questions about the new app:

Questions  for the team:

1) What’s your favourite thing about the new app?

Emma: I love the folding headers, where the images blur as you scroll up the screen.

Edu: I really like the way data has been exposed through the new version of the app. For example, on the summary page, it is great to be able to see how my funds are distributed across the three different stages: available, temporarily held on bids, or lent to a business.

Dallas: Knowing that there is a well-engineered structure inside which is based on solid architectural principles. Having the lower layers of the app made correctly helps all the animations built on top perform much better, and will be easier to maintain into the future.

Ben: The little things that have a story behind why they were chosen – like the effort the team spent debating and researching whether there should be five or six numbers in the passcode, or the way the business information cell has a set height that entices you to read on.

2) What was the most difficult part of the project?

Emma: Adding transparency to the bottom navigation bar was tough. It’s actually one of Apple’s default settings, but the other styling we added changed the default behaviour and we had to change multiple views to bring it back.

Edu: I think the most difficult part was planning at the start of the project. We sat in a room with white paper in front of us in order to define what could be improved and how we were going to do it. We started thinking of the different reasons someone would open the Funding Circle app, what they would be looking for, and how we were solving it on the first version of the app. There were several iterations of design and user testings which allowed us to progress from a user flow on paper to the final design and implementation. This has been a huge effort across several teams, and I truly believe it was worth it in order to offer the best experience possible to our users.

Dallas: Ensuring that we are focussing on developing the right features for the user, based on real evidence and user testing.

Rory: Having fixed rates on the marketplace is changing the behaviour of our users. Keeping up to date with what our investors want can be difficult. We will be keeping a close eye on how users interact with the new app and will work hard to roll out the new features you want much more regularly than we have done before.

Ben: I agree with Rory.  The most difficult part will be deciding what new features we should add next.

3) What would you like to develop in the next iterations?

Emma: I’d like to see us implementing autobid settings or a secondary market feature, as I feel that these are becoming more important parts of the investor experience.

Edu: We are going to continue to be really proactive in listening to feedback from our users and making changes according to their needs. There are other features that I would like to see introduced. For example, being able to subscribe to notifications whenever a loan request matching certain criteria is listed; bringing the secondary market into the app; and probably the most immediate one, updating the iPad app to the new version.

Dallas: Implement some of the new features Apple have included in iOS such as 3D touch for extra user actions, spotlight search, Apple watch app and/or contextual notifications. These would be features that would be interesting to work on but we would first need user testing/validation to ensure our users would actually find them useful.

Rory: iPad – so we can expand and iterate on top of our existing component library. Doing so will allow us in the future to roll out new features across the two platforms simultaneously.

Ben:  I’m really looking forward to finding new ways to provide the most important information for customers at the right time – maybe something that tells you what has changed in your account since you last looked at the app.

 

Stay tuned on the blog to find out when the new app will be released!

The Funding Circle team

Funding Circle launches in Europe. October industry news

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Funding Circle launches in Europe in bid to become ‘household name’

Last month we joined forces with Zencap, creating the first truly global marketplace lending platform. Our mission is to help millions of businesses across the world access finance from investors, and this is an exciting step to helping businesses across Europe access the finance they need to grow. The Continental European business in Germany, Spain and the Netherlands will operate separately from Funding Circle in the UK, so there will be no change to your lending experience. In time, we hope that you will be able to lend across borders to further diversify your investment. More coverage can be found in Financial Times, CNBC, City AM, Evening Standard, The Times, Reuters, Business Insider. Read the full story on our blog or you can join the conversation on our forum.

Is this Government bank behind the alternative finance boom?

The Government continues to promote marketplace lending to small businesses through the British Business Bank. The bank has lent £60 million through the Funding Circle platform since 2013, which has helped to raise awareness of the choice business owners now have when they are looking for finance. The role of the British Business Bank funding is to create a stable and diverse platform for our investors, and help more small businesses access finance across the UK.

MPC member highlights increased role of alternative lenders

Monetary Policy Committee member, Ian McCafferty, stated last month that since the financial crisis, there has been a rise in small and medium sized businesses turning to marketplace lending platforms for finance. Although still small in comparison to traditional bank lending, marketplace lending volumes are growing quickly and are becoming increasingly important in helping to close the ‘funding gap’.

Treasury sings praises of peer to peer lenders

MP Harriet Baldwin, speaking at LendIt Europe last month, branded marketplace lending a “brilliantly innovative new form of finance – which we want to see continue to grow and evolve.” The MP for West Worcestershire said she’s proud the UK has the largest alternative finance sector in Europe, and highlighted the introduction of a third ISA which will allow investors to hold lending through marketplaces, such as Funding Circle, within an ISA from 6th April 2016.

Cameron to announce affordable housing starter homes

Last month, at the Conservative Party Conference in Manchester, David Cameron launched a housing ‘crusade’ announcing the Government wishes to help build 200,000 new homes by 2020 to combat the UK’s housing shortage. Following the announcement, Head of Real Estate Finance at Funding Circle, Luke Jooste, stressed the importance of financing smaller property developers to meet the growing demand. Coverage also seen in Architects Journal and Property Wire.

Funding Circle investors hit £100m lending mark

The Funding Circle Property Team also announced that you have facilitated £100 million in property loans through the marketplace, helping established developers to build over 600 new homes across the country. You can read more about this property milestone in Mortgage Introducer and Best Advice.

News

Funding Circle launches across Europe to help more small business access finance

Today we’re excited to announce that we’re joining forces with Zencap, to create the first truly global marketplace lending platform and to help millions of businesses across Europe access finance.

charlie image

Zencap currently operates in Germany, Spain and the Netherlands, and has experienced strong growth over the past 18 months with more than €35 million lent to 520 businesses. They are Continental Europe’s leading marketplace for small business loans and will now operate as Funding Circle across Europe.

Together as one business we combine their established home grown team and local knowledge, with our experience and innovative technology. The European business will operate separately from Funding Circle in the UK, so there will be no change to your lending experience; investors based in the UK will continue to lend to businesses in only the UK. 

Since launching in the UK in 2010, the Funding Circle marketplace has helped 12,000 businesses access more than $1.5 billion of finance in the UK and US. We’re excited to be taking this technology to Europe, so we can help businesses borrow in a faster and more efficient way whilst giving investors the opportunity to make a return on their money.

Commenting on today’s news, Samir Desai CEO and co-founder of Funding Circle said: “Our vision is to help millions of businesses across the world sidestep the outdated and inefficient banking system and borrow from investors. Today’s news is the next exciting stage of this journey. We have been hugely impressed with what the Zencap team have achieved so far. By coming together we combine Funding Circle’s leading position in the UK and US with Zencap’s deep understanding of local markets to create the first truly global marketplace lending platform.”

Today’s news is the next step towards a global revolution in the way small businesses access finance. We’re over on the forum talking about this, so please do join the conversation.

The Funding Circle team

News

Did you lend to Verto Homes? September industry news

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EIB turns to peer-to-peer lending for UK companies

Top notch coverage in the Financial Times last week as the European Investment Bank discussed their plans to work with us. They are preparing to lend £100 million through our platform, and believe our model is a dynamic way to channel government-backed funds for small businesses. The EIB were quoted saying: “This is an interesting direct model for supporting small businesses, which has the potential to be quite efficient”.

Smart housebuilders stand out from the crowd

In this article, Kathryn Hopkins discusses the battle with the banks as a house building business, Verto, struggled to access finance quickly in order to build homes in Newquay. After turning to Funding Circle, it took only three weeks to secure their first loan, and they are now building 21 homes in the area. To date, your lending in the property sector has mainly gone towards funding residential developers, such as Verto Homes, who specialise in building eco-homes in Cornwall. Read more about these types of loans on our blog.

Funding Circle, H&R Block partner to offer loans to small businesses

Across the pond, we announced an exciting new partnership with Block Small Business, giving thousands more small American businesses greater access to finance. Our agreement will mean that Block Small Business will refer small business clients looking for finance to Funding Circle. We believe that by working in partnership, we can help more small businesses grow, and bring investors more lending opportunities on the marketplace. More coverage found here.

Four funds advisers tip for a retirement income portfolio

Following the new pension freedoms introduced earlier this year, pensioners now have many different ways to maximise their retirement income, depending on what they want to achieve. This interesting article from the Telegraph looks at the ‘drawdown’ route and examines different types of funds available. Alongside these funds, marketplace lending is listed as another option to earn an attractive return.

The 17 hottest fintech companies in Britain ranked

And finally, Funding Circle was ranked as one of the hottest fintech companies in Britain. We are very pleased to have this recognition, as it means we are truly making a difference to investors and small businesses across the UK, and it’s all thanks to your lending. We were also spotted on the Tech Track rank list, which you can read here.

News

A revolution in small business lending. August industry news

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Bye, banks. We prefer peer-to-peer lending

This month, one of our borrowers Jenny Brown, was featured in this great article about her experience of getting a business loan for her company, Pampeano. She discusses her experience with banks versus her experience with marketplace lending. With sophisticated technology, online platforms are able to assess the credit risk of a business and help investors to deliver cash much faster than a bank. Last year, around £1.6 billion of loans were granted by these platforms and this figure is set to almost double this year. Another borrower of ours, The Stripes Company, was also highlighted in an article published in the Daily Mail.

Zopa reaches £1 billion lending milestone

A massive congrats to Zopa on their huge milestone; the platform has now facilitated its billionth pound in consumer loans. For the past five years, Zopa’s loanbook has grown between 70 and 100 percent a year and is on track to increase even more. This substantial growth is seen across the sector as more investors and borrowers look to marketplace lending for business and consumer loans.

Disruptive new tech companies are transforming business in Europe

Prevailing attitudes about Europe being able to produce successful global companies are beginning to change, as Britain continues to build a powerful fintech sector. In the second quarter of this year alone, nearly €3.5 billion has been raised by European tech firms. In this article bylined by our CEO, Samir Desai, he discusses the importance of embracing this innovation.

Funding Circle Wants To Start A Revolution In Small Business Lending

Last month, Funding Circle US, along with five other marketplace lending platforms in the US, helped lead the charge to launch a Small Business Bill of Rights. Sam Hodges, our US Managing Director, talks about the importance of a Bill of Rights in order to protect small businesses and promote transparency in the sector. The six key rights can be found here, and there was further coverage in Forbes and Reuters.

Banks should be afraid, the disruption of financial services has only just begun

Simon Champ, CEO of P2PGI – a large marketplace investor, discusses how disruption in financial services has not yet reached the same levels as sectors such as e-commerce and travel. Marketplace lending platforms are beginning to change that as we continue to see immense growth within these tech firms. It’s only a matter of time before we see marketplace lending become the accepted way for people or businesses to grow money – the disruption of financial services has only just begun.

Funding Circle is set to do over £35 million in revenue this year — and it hasn’t spent any of the £97 million it raised

And last but certainly not least, on the 26th August Funding Circle celebrated it’s 5th birthday! Investors are now lending more than $100 million a month via our platform across the UK and the US, helping hundreds of small businesses access business finance, so thank you to all our customers for your continued support. To read more about what we’re up to at the moment, check out our blog. Any questions? Please get in touch.

News

Fixed interest rate loans – important Funding Circle update

As you may already be aware, we sent a letter and Q&A to all active Funding Circle investors today announcing that we will be moving to fixed interest rate loans within the next month.

Below is the letter and you can read more about these changes on our fixed interest rate webpage. To download a more detailed Q&A about the changes, please click here.

We appreciate this is a big change but we believe it is a necessary step towards building the most successful marketplace for our customers. We would be grateful for your feedback to help us in the next stage of our journey.

The Funding Circle team

……

Fixed rate letter from Samir Desai, CEO and co-founder of Funding Circle

Since we first launched Funding Circle our goal has been to enable investors to earn attractive, stable returns and to help small businesses access finance quickly at a fair, transparent price.

Recently, we have been reviewing in detail how Funding Circle operates, with a view to providing an improved service for both investors and borrowers. We have found that the current auction model has significant drawbacks, which we believe can be improved to give investors and borrowers a better experience, and ensure the long term sustainability of the marketplace.

After careful consideration we have taken the decision to move to fixed interest rates for all loans within the next month. I appreciate this is a big change, which is why I wanted to write to you today.

What’s the challenge with the auction model?

The auction model has existed since Funding Circle first launched in 2010 – enabling investors to choose the interest rate they wish to earn and the amount of money they wish to lend.

Whilst I know many investors have enjoyed the auction model, there are a number of disadvantages with it:

  • Auctions tie-up investors’ funds: auctions typically last 7 or 14 days. During this time your money is not earning any interest and your bid may be knocked out by a lower rate. This means that investors may bid multiple times during an auction, with no guarantee their bid will be successful.
  • Confusing and complex to understand: many investors tell us they want a simple, easy way to lend their money. Auctions can be confusing and unattractive, especially for new investors.
  • Unattractive to borrowers: many business owners are put off by the lack of certainty around the cost of their loan.

How do fixed interest rate loans work?

Fixed interest rate loans are where Funding Circle sets the rate based on the risk of the loan and all investors achieve the same interest rate. We already operate fixed interest rates for property and asset finance loans.

The interest rate is based according to the risk of the loan, rather than the availability of investor funds. The rate is set before a business is listed and it is published on the marketplace for all investors to see. Rates will be set according to the risk band and the length of the business loan.

By setting the interest rate before a loan is listed on the marketplace, there is no need for the traditional auction. Loans will fund and be accepted by businesses more quickly, meaning your money is working harder for you.

Benefits of fixed interest rate loans

  • Simpler and easier to understand: if you like a business you can bid knowing your offer rate cannot be knocked out by other investors.
  • Your money works harder for you: by giving borrowers certainty of rate we expect businesses to accept their loans faster than they currently do, meaning your money is used more efficiently.
  • More businesses to lend to: certainty of cost means more businesses will apply to Funding Circle, creating more lending opportunities for you.

How will this change affect me?

We believe this move is in the best long-term interest for the Funding Circle marketplace. For the majority of investors, fixed interest rate loans will deliver a better service and higher returns. From our analysis, if the new fixed interest rates had been introduced at the start of last year, 71% of investors would be earning a higher expected return. To help plan for the launch of fixed interest rates, we are releasing the new rates to all investors today. You can see these on the Q&A page attached with this letter.

We have taken this decision in the interests of the majority of our investors and the feedback we have received has been positive. 90% of you have previously told us that you would increase or maintain your investment through Funding Circle if more fixed interest rate loans were introduced.

We recognise, however, there are a group of investors who actively use the auction model to earn above average returns, and who will be unhappy with this news and whose overall return is likely to drop as a result. We hope those affected will still consider that they can earn an attractive return at Funding Circle and continue to lend through the platform.

How can I provide feedback?

This is a significant change to how Funding Circle operates. We want to be open with all investors and provide the opportunity to ask questions before we make this change.

Below are details about how you can be involved in the process:

  • Investor evening: this will be held on 17 September and primarily focused on questions about fixed interest rate loans.
  • Webinars: we will be hosting regular webinars to answer your questions. We will provide further information about these on the blog, forum and in your weekly email newsletter.
  • Written feedback: investors can provide written feedback, found at our fixed interest rate webpage.

If you would like to join any part of this process, please email us at community@fundingcircle.com.

This is a big, but necessary, move to continue to build Funding Circle into a successful, mainstream business. I hope this letter provides you with further information behind this important change and we look forward to answering any questions you have.

Yours sincerely,

Samir Desai

CEO and co-founder, Funding Circle

News

A third type of ISA. July industry news

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P2P Isa investments confirmed for next year

July saw the Chancellor deliver his Summer Budget, where he confirmed a third ISA, which will allow lending through marketplaces such as Funding Circle to be held within an ISA from the 6th April 2016. This is tremendous news for investors who will soon be able to lend up to £15,000 per year tax free. Our co-founder, James Meekings said “inclusion of peer-to-peer lending within ISAs is a pivotal moment for our industry”. You can read more in the Telegraph, Mirror, Mail, Times, Independent and on our blog.

Funding Circle’s new Innovative Finance ISA can be found here

 

UK peer-to-peer finance breaks new record

Another busy month at Funding Circle as you lent a record £47.5 million to businesses across the UK! Q2 was also a record quarter for marketplace lending as a whole with over £500 million lent to consumers and businesses across a three month period for the first time in history. The phenomenal growth is proof that marketplace lending continues to become a mainstream way to borrow and lend. Check out this article in the Guardian if you’re still not convinced.

 

Funding Circle Hires Barclays, AmEx Executives to Oversee Risk

In more big news, we are delighted to welcome Jerome Le Luel and Manpreet Dhot to the Funding Circle team. Jerome, former Head of Risk Analytics at Barclays Group, is joining the company as Global Chief Risk Officer. And Manpreet, previously Chief Credit Officer at American Express within the Latin American market, has joined as Chief Risk Officer in the USA.  Full details can be found in the press release.

 

Software firm Sage brings funding options to its small business customers

We were also pleased to announce our new partnership with Sage, one of the world’s leading software providers for small businesses. Our partnership means Sage will refer small businesses to the marketplace for fast and efficient access to finance.  We believe that by working in partnership, we can help more small businesses grow, and bring you even more lending opportunities. This tie-up follows our agreement with Santander last year. More details can be found in the Daily Mail, CNBC and on our blog.

 

Apple becoming a bank? Don’t count on it

And finally, in this interesting article about the powerful growth of the financial technology industry, Morgan Stanley predicts that marketplace lending could grow from 1% of consumer and small business lending in America, to 10% by 2020. With tech companies popping up everywhere and smartphone apps providing 24/7 services to millions of people, it’s no wonder the fintech revolution is taking off. The internet is driving the biggest upheaval to the financial services industry in its history, and we hope that by lending to businesses through Funding Circle, you feel part of this!

News

9 things you need to know about applying for a business loan

Thinking about taking out a business loan through Funding Circle? Cast your eyes over our list below to make sure you have all of the information you need.

1. Who can apply for a business loan?

Our aim is to help established and creditworthy businesses access finance through our marketplace.

Limited companies, limited liability partnerships (LLPs) and non-limited companies that have at least 2 years of filed or formally prepared accounts can apply. We’ll typically need to see a minimum annual turnover of £50,000 in your latest accounts. You can check if you’re eligible for a business loan online in just 30 seconds.

2. Types of business loans we offer

Unsecured loans – typically up to £250,000
These are highly flexible loans that can be used for a wide range of purposes, including working capital, expansion capital, asset purchase and more.

Secured loans – typically up to £1 million
These loans can be used for a wide range of purposes and will allow you to borrow more for your business.

Asset Finance – typically up to £1 million
If you’re thinking about purchasing a new asset or refinancing an existing one, then this could be the best solution for you. We can also fund the VAT if required.

Property Finance – typically up to £3 million
We offer the full suite of property loans including finance for development and investment purposes, commercial mortgages and bridging finance. Please contact propertyfinance@fundingcircle.com to find out more.

A personal guarantee from the majority shareholder(s) is required for all of the above.

Birchmead Homes Property Finance School Development

Jonathan Jay, director of Birchmead Homes Limited, has borrowed more than £2 million since July 2014 to develop a former school in Gloucestershire into 19 family homes. Find out more about the development on the blog.

3. What do we look for when we make our decisions?

The credit assessment team use the information you provide, as well as information from credit bureaus (for example, Experian) and other third parties.

Once you’ve checked your business is eligible you will need to complete our short online application and provide the following, all of which can be uploaded online:

  • Most recent filed / formally prepared accounts
  • Last three months of business bank statements

We may also request management accounts, depending on the age of your most recently filed / formally prepared accounts, and other supporting documents for certain products.

4. How long does the process take?

The application form only takes 5-10 minutes to complete. Then, our Credit team will assess your application, making a decision typically within 2 working days, and the funds will be available for you to drawdown within a week.

5. What interest rate will your business pay back?

If your loan application is successful, the loan will be given a risk band. This will be one of six: A+, A, B, C, D or E. The final interest rate you pay back on your loan will depend on many factors, but the risk band is the most influential. Interest rates start at 6%.

6. What fees do we charge?

One of the best things about taking a loan through Funding Circle is that there is only one fee, and unlike other lenders, there are no early repayment fees so you can settle your loan early with no extra cost. All we ask is that you pay the outstanding capital on the loan and the interest up to, and including, the month that you repay.

The fee amount will depend on the risk band and loan term you have requested.

Fees

7. How are the repayments structured?

You’ll need to pay your loan back in equal monthly instalments over your chosen time period. (Please note the repayment structure of some property development loans may vary.)

Make sure you get your ID documents in to us to set up a direct debit as soon as you can, as your first repayment is due one calendar month after your loan request closes. This is to ensure payments are on time for the investors who have lent to you.

8. Who’s lending to me?

With more than 41,000 investors, including individuals, local councils, universities and the Government-backed British Business Bank*, the marketplace gives all types of investors, big and small, the chance to participate in your loan.

Each loan request is listed on the marketplace and is either funded in full by a large investor, like a family office, or as a partial loan, where thousands of investors can offer as little as £20 each to fund your loan.

They will have access to key financials for the business, for example the credit score and details of why you need the loan. Investors can also ask you questions about your application, and we recommend answering these as quickly and in as much detail as you can!

9. Can I apply for a second loan?

It’s easy to apply for another loan, as you’ve been through the process once before. You’ll typically need to have made at least 3 to 6 months of repayments on your existing loan before applying.

If you’re interested in taking out a business loan through Funding Circle, you can have a look at the website for more details, or start the application here.

Have a question?

If you are unsure about any of the above or would like to discuss your options, our team are more than happy to help. Call  0207 401 9111 (and choose option 2)

*Funding Circle is supported by the British Business Bank, a development bank wholly owned by the UK Government. The British Business Bank and its subsidiaries do not offer bank accounts, take deposits or provide regulated banking services. The British Business Bank provides its financial support to smaller businesses through its delivery partners. Any decisions to provide finance to smaller businesses are made by Funding Circle not by the British Business Bank.

News

Introducing a third ISA: What does it mean for Funding Circle investors?

Funding Circle’s new Innovative Finance ISA can be found here

Last week, during the Summer Budget 2015, the Chancellor confirmed a third ISA, the ‘Innovative Finance ISA’, which will allow lending through marketplaces such as Funding Circle to be held within an ISA from 6th April 2016. This is fantastic news for investors who will soon be able to lend up to £15,000 per year tax free.

Funding Circle co-founder James Meekings said the “inclusion of peer-to-peer lending within ISAs is a pivotal moment for our industry.”

The change follows HMRC’s consultation earlier this year, and is another sign that lending through marketplaces is becoming a mainstream way for individuals to earn attractive returns on their money. We calculate that if just 3% of ISA money is channelled through Funding Circle, it would create £1.5 billion of new lending to small businesses annually, creating 75,000 new jobs.* This ISA will sit alongside the traditional cash ISA and stocks & shares ISA as a third option.

What does this mean for investors?

This third ISA will give investors more flexibility and allow for a higher level of diversification, as you will be able to choose how best to allocate your £15,000 ISA limit across the three types of ISA.

It will also mean that Funding Circle can become an ISA manager. With Funding Circle as an ISA manager, you will be able to own all of your investments yourself, rather than investing through a third party ISA manager. This will give you greater control over your investment and keep you closer to the small businesses you lend to, as well as allowing you to avoid paying additional fees to an intermediary.

When and how do I start using my ISA allowance?

Further information about how the ‘Innovative Finance ISA’ will work in practice will be published later this year, including whether investors will be able to transfer existing investments into the new ISA. We will keep you up to date with any developments on the blog, however our recommendations to the Treasury on how the ISA should work can be found in our Lending ISA blog post.

Will you be taking advantage of the new ISA from April next year? Let us know your thoughts below.

*Independent research by government think tank Nesta found that businesses that receive a loan through Funding Circle employ on average 11 people, and see an average increase in employment of 27 per cent after receiving finance.

Are you helping transform a former school into family homes?

Last month we met Jonathan Jay, director of Birchmead Homes Limited, at the former Abbey School in Gloucestershire. A former retail banker, Jonathan turned his hand to property development 15 years ago and is currently part-way through converting 19 homes in the idyllic market town of Tewkesbury.

Birchmead Homes Property Development

The local community has welcomed the project as the building, which overlooks the magnificent Tewkesbury Abbey, had become an eyesore. The project has even been featured in the local press, for example the Gloucestershire Echo.

Jonathan has borrowed more than  £2 million from 21,000 Funding Circle investors since July 2014 to develop the school building, and already has 70 potential buyers.

In this short video you’ll meet Jonathan, and have an understanding of how your lending is helping to build homes across the UK.

Property development loans were available between April 2014 and April 2017. If you work in the property industry and are looking for finance, we may still be able to help you with an unsecured loan up to £350,000 with a personal guarantee, or a secured loan up to £1 million.

Get an instant quote online or speak to our dedicated team today on 0800 048 8747.

Why you can’t ignore the rise of mobile friendly websites

You’ve probably seen headlines with statistics about the growing proportion of our lives now dedicated to technology, or you’ve noticed the average person on the street glued to their mobile phone. Whether you surf the web while you walk, talk or eat, it’s safe to say that mobile phones, and the way we interact with the internet, is now integrated into our daily lives.

UK adults now spend an average of 2 hours, 26 minutes a day on mobile devices according to research from eMarketer, up almost fivefold since 2011. They also forecast that the average time spent searching online using a mobile phone will surpass time spent at a desktop or laptop later this year.

What does ‘mobile optimised’ really mean?

A website that is optimised for mobile is designed specifically to be read and navigated on a mobile phone (rather than a shrunken version of a website designed for desktop). For example, a mobile friendly site will have easy to use ‘finger friendly’ buttons. If you aren’t sure where to start, Google has an easy to follow guide to help make your website look great on mobile.

What does this mean for small businesses?

Consumers are searching for businesses while on the go and want to find shops, restaurants and bars near to where they happen to be. This provides a great opportunity for small businesses as they can now pinpoint customers in their local area.

mobile friendly business“People searching in their local area are more likely convert

Curious to understand the search activity of potential business customers Google undertook an independent study. It concluded that people searching in their local area are more likely to be ready to act and so convert better than non-local searchers.

In February this year Google also announced a new algorithm for browsing on a mobile device. This update, which came into effect on 21 April, means people searching on mobile will only see the most popular and mobile friendly websites. For example, Funding Circle borrower Cable & Cotton’s mobile friendly website ranks highly if you search ‘fairy lights’ in Brighton.

On the flip side, businesses who have not yet optimised their website for mobile might have seen a decrease in traffic since April as their website’s Google ranking may have dropped. Most importantly, the change will make it harder for potential customers to find you.

Is your website mobile friendly?

Making sure you have a mobile friendly website is a great opportunity to put your business ahead of the competition. You can check if your website is classed as mobile friendly by entering a web address into the Google mobile-friendly analyzer.

There are also handy online tools to help you start thinking about your Google shopfront, including My Business Be found, customize your website software and guidelines for representing your business on Google.

It’s never too late to change!

The good news is that when you switch to a mobile-friendly website Google will pick it up immediately, so you should start seeing the difference straight away.

What would you like to find out in our next Google post? Please add your suggestion to the comments section below.

Want to find out more about how using Google can help your business?

Business lending through marketplaces surges. June’s industry news

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P2P business lending to eclipse consumer sector

Last month, business lending through marketplaces overtook lending to consumers in the UK for the first time. Marketplace lending to consumers began in 2005, whilst business lending began in 2010. However, the small business lending market is worth approximately £7 billion per month, and the options available to small businesses has historically been narrower than for consumers, so it was only a matter of time before business marketplace lending overtook consumer.

The lenders of the revolution look familiar

Big news in June as Goldman Sachs announced their intention to launch a marketplace lending platform at some point in the future. They plan to offer loans to both consumers and small businesses. A sign that the industry is maturing as larger institutions become more involved, particularly those who are historically used to dealing only with other institutions rather than consumers. In this Financial Times article, Morgan Stanley estimates that marketplace lending could become a $290 billion market within the next five years.

2015 Digital Masters Awards

The Digital Masters Awards recognise Europe’s top leadership talent across the digital space. Our very own UK COO, Pam Burton, won the ‘Google Award for Women in Digital’. Pam has helped make Funding Circle one of the fastest-growing technology companies in Europe and the marketplace is currently the 5th largest net lender to small businesses in the UK.

Peer-to-peer lending must mature to thrive

Back in May, Metro Bank and Zopa announced a new partnership where Metro Bank will lend to British people alongside existing investors through the Zopa platform. This type of relationship aids further expansion of marketplace lending and is a great example of how technology companies can work alongside traditional banks in the best interests of customers.

From couriers to car clubs: How the power of sharing could help you save money, cut costs and share the love

In this final piece, Laura Shannon describes the rise of ‘people power’; the rapidly expanding personal marketplace where people deal directly with other people to invest, save or anything from house sharing to car rentals. The sector is expected to be worth £230 billion a year within a decade. Within this falls marketplace lending, and the attractive rates you can earn if you diversify your individual investments across hundreds of loans. To learn more about what diversification could mean to you, check out our blog. And remember, when you lend, your capital is always at risk.

Channel 4 Dispatches

As you may have seen, Funding Circle was included as a part of Channel 4’s Dispatches this evening. The show was called “Where to Save Your Money” and examined how individual savers have been affected since the financial crisis.

Since we launched nearly 5 years ago, investors have lent to thousands of UK businesses and earned more than £32 million net interest – an average 6.6% after fees and bad debt, but before tax.

In brief, the programme covered a specific loan that was made in 2013 and defaulted after one payment.

Whilst it is always frustrating when loans default, Funding Circle is an investment, and all investors who have been lending for at least 1 year and to 100 businesses equally are currently earning a positive return. Of the 10,800 loans issued in the UK, only six loans have resulted in a loss to investors after one or zero repayments.

We have built Funding Circle on the principles of openness and transparency. Details about specific loans would not be publicly available if we did not publish data on every single loan that has been made on the marketplace. We think it’s very important investors can see who they are lending to and the performance of these loans over time. This brings extra scrutiny, which we welcome. It makes us stronger and committed to getting things right.

Transparency makes Funding Circle unique and we remain absolutely committed to this principle and it will not change.

We appreciate there may be further questions so please join us on the forum or get in touch with our customer service team directly.

The Funding Circle team

The fintech revolution. May industry news

Cool, man

Marketplace lending features in this special report about financial technology. With topics that include payments, peer-to-peer lending and money management, ‘cool, man’ discusses the finance gap left by banks and how a range of fintech ventures are stepping in to fill them with more efficient methods. Discussing the gap in the market for small business lending and the importance of the use of data in credit assessment, Samir Desai, our CEO and co-founder, says, “There is far less readily available information to help gauge a business’s creditworthiness than there is for a person’s.”

The fintech revolution

A second article in the Economist discusses how the fintech revolution is improving finance in three fundamental ways including a quick and transparent process, new and clever ways to assess risk, and the creation of a stable credit landscape with diversification. At Funding Circle, we strongly believe in diversification. By spreading your money to hundreds of business, it not only helps you earn attractive rates in a sustainable way, but helps more small UK businesses too. To learn more about the importance of diversification, check out our blog.

Key to solving housing crisis? Giving smaller housebuilders more financial support, investment bankers say

Small property developers continue to struggle to access the capital they need from traditional sources. As awareness of other options grows, these developers have begun to use marketplaces like Funding Circle for finance. More than £50 million has already been lent to small house builders by Funding Circle investors, helping them to build more than 400 homes across the UK. Our head of real estate, Luke Jooste, says, “We are facing a huge housing supply gap which we know will only partially be met by big housebuilders.”

Retail investors at risk as big business enters P2P lending

A year ago, we introduced whole loans so that a wider range of investors could lend to small businesses through Funding Circle. By offering both partial loans, where lots of investors lend to one business, and whole loans, where one larger investors lends to a business, we are able to ensure that retail and institutional investors are given the same opportunity at Funding Circle. As part of a refresh of the Peer-to-Peer Finance Association’s operating principles, members agreed that this equality of opportunity must always be the case on member platforms. All members have made sure this is the case to date anyway so there’s no change for investors at a practical level. AltFi also covered the discussion.

Debt disruptors yet to face test from a downturn

New forms of finance have emerged and been hailed a disruptive force, offering investors attractive returns and borrowers lower rates, or finance they could not have otherwise accessed at all. But the majority of platforms have been set up since the financial crisis in 2008 and are yet to deal with an economic downturn. At the end of last year, an independent consultancy conducted a stress-test on the Funding Circle loanbook to see what the impact of a serious downturn might be. You can read about the results on our blog.

Metro Bank strikes deal to lend through P2P site

The relationship between banks and marketplaces continues to develop, with Zopa and Metro Bank announcing a new partnership last  month. As part of the deal, Metro Bank will lend to British people through the Zopa platform alongside existing investors. This unique collaboration brings together two disruptive challengers in the consumer lending space. These partnerships will continue to increase awareness of the many ways you can now access finance. Read more in Reuters and the Independent.

Is Peer-to-Peer Lending the Future of Loans?

Sam Hodges, our co-founder in the US, was interviewed on Bloomberg this month to discuss the solution to the small business lending issue also seen in the States. He talks about the impact marketplaces, like Funding Circle, are having on small businesses and the huge potential of the model  in the future.

$150 million investment in marketplace lending. April industry news

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Funding Circle raises $150m in new boost for London tech sector

We were really pleased to announce a large equity investment into Funding Circle last month. New investors include DST Global, who have invested in companies such as Facebook, Twitter, Airbnb and Alibaba. The money will ensure we continue to improve our offer for both borrowers and investors; helping more businesses borrow in the US and UK, and improving the investment experience for all investors. Investors have now lent $1 billion collectively to small businesses in the UK and US, so thank you for your continued support and lending. You can read the full press release here  and find more coverage in the New York Times, Wall Street Journal and TechCrunch. If you have any questions, please get in touch.

Funding Circle raises $150 mln, aims to be top UK lender to SMEs

We were also pleased to welcome David Yu and Chitra Nayak to the team. David is the former CEO and CTO of Betfair and joins us as Global Chief Product Officer. He will oversee both technology and product going forward and we look forward to introducing you to him soon. Chitra joins us from Salesforce and is our new Chief Operating Officer in the States. Our CEO, Samir Desai, was on CNBC and Bloomberg to discuss the news.

‘I invested £4k in peer-to-peer lending’: Fed-up savers turn to riskier investments – we weigh up the alternatives tempting them

As people continue to look for more attractive returns, the number of investors that are tempted to cut out the banks and look towards peer-to-peer lending platforms continues to rise. In 2014, individuals lent £1.2 billion via peer-to-peer, or marketplace, lending; nearly double the amount in 2013. This article takes a look at what is on offer right now and highlights the benefits of using an online marketplace like Funding Circle, including the ability to access your money early and sell your loan parts onto other investors. Remember your capital is at risk, and returns can go down as well as up.

How Larry Summers would regulate peer-to-peer lenders

Last month our team attended LendIt, the largest conference dedicated to connecting the global online lending community, which has grown immensely over the past year. In this article, Larry Summers, Former US Treasury secretary and speaker at LendIt, talks about his views on regulation, and some key principles on the best way forward. He also highlights the importance of transparency. At Funding Circle, we believe transparency builds trust, which is why you can download our full loanbook here. If you need more evidence that the online lending market is exploding, just take a look at the crowd at this year’s conference on CNBC.

Boutique chocolate makers growing faster with help from thousands of small investors

This article is about the story of James Hutchins, and how he borrowed money for his business, James Chocolates, through the Funding Circle marketplace. More than 2,500 investors have lent £166,000 to artisan chocolatiers in the past year. Great news for all of you chocolate lovers out there. Remember, it’s important to lend small amounts to hundreds of businesses at Funding Circle in order to minimise risk.

Karen Mills supports marketplace lending

In a bylined article in the Guardian by small business champion, Karen Mills, who was Administrator of the Small Business Administration in the US, we hear why support for marketplace lending platforms is so key. She acknowledges that the future of small business finance isn’t going to come solely from traditional banks. There are now many options for small business owners looking to grow and expand, and the challenge going forward is to raise awareness of these.

Funding Circle announces $150 million investment to fuel growth

Today we’re delighted to announce that we have completed a $150 million equity investment, in a round led by DST Global, with participation from Baillie Gifford, a fund managed by BlackRock, Sands Capital Ventures and Temasek. This latest round of funding will help us to continue to improve our offer for both borrowers and investors; helping more businesses borrow in the US and UK, and improving the investment experience for all of our investors.

We’re also pleased to welcome David Yu and Chitra Nayak to the team. David is the former CEO and CTO of Betfair and joins us as Global Chief Product Officer. He will oversee both technology and product going forward and we look forward to introducing you to him soon. Chitra joins us from Salesforce and is our new Chief Operating Officer in the States.

Your collective lending, both here in the UK and in the US, has now passed $1 billion globally. This is a huge milestone and we want to thank you for your continued support and lending. You are on track to lend $1 billion over the next year, showcasing the huge potential of marketplace lending on the global economy.

You can read the full press release for today’s news here and read some of the coverage in the Financial Times, New York Times and Reuters. Our CEO, Samir Desai, was also on the Today Programme this morning discussing the news. Listen in at 23 minutes 50 seconds here.

We are talking about today’s news on our forum, so come and join the conversation.

The Funding Circle team

News

What a week!

This week we were delighted to hit the 10,000 loans to UK businesses milestone. We also passed £600 million lent through the Funding Circle marketplace since 2010!

Investors are now lending more than £40 million a month to creditworthy small businesses, and the Funding Circle marketplace is currently one of the largest net lenders to small businesses in the UK. Since launch, this has created an estimated 24,000 jobs.

Lakeland Picnic - banner

Michelle Partington has been running Lakeland Picnic since 2007, making homemade burgers and sausages from their base in the Lake District. In September 2013, the business borrowed £36,000 from 221 people across the UK, alongside the UK Government, to revamp the look of their street stalls.

Michelle said: “There was a list of nearly 5 pages of people who had lent me money…I was nearly crying: these people believe in what I’m doing!”

Are you interested in lending to businesses like Michelle

You can support small businesses like Lakeland Picnic by lending to them, and you can earn a great return by doing so. Simply sign up online and use our investor information guide to get you started. We have thousands of loans which you can be a part of, making it quick and easy to build a diversified portfolio. Remember, by lending to businesses your capital is at risk.

 

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