50% fee discount for businesses on Small Business Saturday

To celebrate Small Business Saturday tomorrow (7 December), we’re offering a 50% fee discount for all businesses that register this weekend – including Sunday too!


Small Business Saturday is already a $5.5bn-a-year (£3.4bn) phenomenon in the US, and it’s coming to the UK for the first time ever, on typically the busiest shopping day of the year.

The campaign promotes the benefits of buying local, and encourages the public to consider shopping with smaller businesses.  As the leading online marketplace for business loans, we wanted to show our support and back Small Business Saturday UK.  Their work will help to raise the profile of small businesses across the country.

If you know a small business looking for finance, then tell them to get in touch this weekend as they will receive a 50% fee discount.

How it works

The offer is a 50% discount off your overall fee to Funding Circle. For example, if your loan was for £100,000 over 3 years where the fee is 3% (£3,000), you would pay £1,500 and receive £1,500 as cashback.

This offer is open to new Funding Circle members to be eligible, businesses need to register and accept the loan by 01/03/2014. Read the full terms and conditions here.

Funding Circle named a UK Future Fifty company

We’re really pleased to let you know that Funding Circle successfully qualified for the Future Fifty, a fast-track scheme to support high-growth businesses scale and reach their full potential.

Tech City UK, the organisation behind the programme, has today named the second 25 companies that are considered to be among the most promising, high potential growth businesses.The programme delivers tailored public and private sector expertise to enable companies like ours to scale rapidly, and continue to improve the service we provide to our investors and borrowers.

We are honoured to have been selected alongside so many exciting companies. The Future Fifty consists of some amazing technology businesses, each of which is transforming their industries through continual innovation as well as creating fantastic products and services. To celebrate today’s news, our co-founders, James Meekings and Samir Desai attended an event at the London Stock Exchange with other Future Fifty companies and had the pleasure of meeting the Prime Minister, David Cameron.

Our CEO and co-founder, Samir Desai said: “Fast growing tech companies are the future of the UK economy and we’re honoured to be included in the Future Fifty by Tech City UK. We really look forward to working with the Government over the next year to maximise future growth opportunities.”

The Future Fifty is a fast-track programme to accelerate selected companies’ progress, in order to create jobs and deliver significant economic impact in this country. It was launched in April by the Chancellor George Osborne and Joanna Shields, CEO of Tech City UK.

We can’t wait to get started.

An industry going mainstream: November industry news

Peer-to-peer lending continued to make waves in the financial and business pages this month. Following a bumper month in October with the FCA publishing their consultation document for regulation, our launch into the US and various prominent journalists discussing the rates they have earned through peer-to-peer lending platforms, it seems that the industry is really gathering momentum.  As 2013 draws to a close, it’s clear that the industry is becoming mainstream, as we continue to demonstrate that we’re just a better way of accessing finance.

Rules for peer-to-peer lending at risk of being lost in the crowd

Christine Farnish, chair of the Peer-to-Peer Finance Association (P2PFA), warned the regulator that grouping peer-to-peer lending and crowdfunding together for regulation would not be beneficial.  She argues that they are two different industries, each with different approaches and risks, and the regulator needs to take this into account when drawing up the rules, which are due to be introduced in April of next year.

Funding Circle lends almost all of £20m provided by government

Sean Farrell at the Guardian covered the news that we have lent £17.6m of the £20m allocation of Government money.  It’s certainly been hugely beneficial, boosting credibility with investors and borrowers, and we hope the Business Bank will continue to support businesses via Funding Circle in 2014.

P2P lending: be disciplined

As the industry does become more mainstream, so too will speculation about it’s future increase. Here’s a piece from the Financial Times which rightly cautions the industry against allowing demand to drive lending. Credit checking and underwriting processes must be sound for the industry to last, and prove it really is superior.

Peer-to-peer loans: Investors urged to lend to small firms

BBC Wales helped to spread the word to small businesses in Wales this month with radio, TV and online coverage.  In the video clip, Vanguard Cleaning, a business who took a loan through us last year, talks about why they found the process of peer-to-peer lending much easier than going to a bank.

Funding Circle hires Barclays’ Luke Jooste to lead move into property finance

We finish with a bit of our own news, that this month we hired property specialist, Luke Jooste, who will head up our move into the property finance arena.  You can read more about our plans on the blog.

Welcoming Luke Jooste to Funding Circle

As we’ve alluded to recently, it’s going to be a big twelve months at Funding Circle.

You may have read recently that Funding Circle raised $37million in October to invest partly in launching our US operation, but also to invest in expanding our UK offering into key opportunity areas, focussing mainly on expanding the types of loans we offer to our UK investors.

One such area is property finance and to help us define our offering, we are very pleased to welcome Luke Jooste to the team. Luke is a property finance specialist, bringing fifteen years of experience with him, and we’re really excited to have someone of his stature onboard with us.

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Before joining Funding Circle, Luke oversaw the commercial performance of Barclays Business as their Commercial Director, of which property is a major asset component.

We spent a few minutes with Luke to hear what drew him to Funding Circle.

What’s your background?

I’m always reluctant to say (only because it shows my age), but I’ve been in financial services for 18 years, 15 of which have been in property finance. I began my banking career in 1995 after being recruited from University by one of the large South African retail banks.

I moved over to the UK as an Associate Credit Director (Real Estate) with Barclays Corporate Bank in 2008, just as the credit crunch really took hold. It was an incredible learning experience for me as I got a huge amount of insight into the heart of credit risk in the UK real estate sector. After two years in that role I moved to Barclays Business Bank as UK Head of Real Estate Finance, and for the past 12 months I’ve been the Commercial Director of Barclays Business.

It’s been a difficult time for the UK banking sector but very valuable experience for me to have.  I’m now looking to bring that experience across to Funding Circle, so that we maximise opportunities while avoiding the mistakes of the past, and add real value for our borrowers and investors.

Why did Funding Circle appeal to you?

The emergence of peer-to-peer lending is probably the most exciting development in the UK financial sector at the moment. So being given the opportunity to develop a real estate finance proposition for the company that is pioneering the peer-to-peer lending movement is both an honour and a compliment for me.

It’s also incredibly exciting to move from a global corporate like Barclays to a smaller tech start-up company. I’m still struggling with not wearing a suit everyday and getting used to having table tennis in the office however! But most importantly it’s about the people. The team at Funding Circle are exceptionally talented and that was the most appealing aspect.

Why do you think it’s a good idea for Funding Circle to develop it’s property offer?

If Funding Circle is going to achieve its ambition of being a global peer-to-peer lending company, then it needs a full suite of funding product offerings. Property finance is at the core of any funding market. There is general consensus across the board that the UK real estate market is improving, and we must be able to service borrowers who need finance as well as investors that are looking to get into this popular asset class.

But we won’t be naive about how we do that and are very aware of the risks that this carries, particularly given the learnings from the 2008 property downturn. Just because it will be difficult however, doesn’t mean we shouldn’t do it.  In fact it means we should do it a lot better. As a peer-to-peer lender, Funding Circle doesn’t have the legacy in real estate finance that the banks do. I think this gives us a real advantage and look forward to enhancing lending opportunities for all of our investors.

Why now?

The timing is a combination of the natural growth path of Funding Circle, a recovering property market (based on a number of metrics, not just house prices), the continued shortage of credit in the market (especially to small and medium sized property professionals) and ultimately our sheer determination to be able to offer the right suite of products and opportunities to our borrowers and investors.

Thanks Luke.  That’s it for now, but we’ll be in touch with more exciting property news in the next few weeks.


A big month for peer-to-peer lending: October industry news

October has been a bumper month for media coverage of the peer-to-peer lending industry. What with the Financial Conduct Authority announcing plans to regulate the industry from April 2014, and our move into the US, peer-to-peer lending has been across the papers, radio and even TV. Martin Lewis has also been blowing the industry’s trumpet after revealing the great returns he has made by investing in three of the UK’s biggest peer-to-peer lenders.

Let’s regulate

Peer-to-peers are good for banking competition

It’s great to see the Daily Telegraph welcoming news of peer-to-peer regulation.  We certainly agree that “it’s unusual to hear senior executives pining for increased regulatory control”, but that really is how we and the Peer-to-Peer Finance Association feel.  Proportionate regulation will ensure the industry is cemented in the wider financial services industry.

Peer-to-peer lending has a role to play but investing matchmakers need tough controls

Jeff Prestridge at the Mail on Sunday highlights how the regulatory emphasis will be on ensuring those prepared to lend via peer-to-peer platforms are not misled in any way, shape or form.  He says all of the risks will have to be spelt out in black and white, and any interest rate calculations will have to be fair and clear.  Quite right too, and you’ll be pleased to know transparency has always been the name of our game.

FCA wrong to lump P2P lending and crowdfunding together

Christine Farnish, chair of the Peer-to-Peer Finance Association, wrote an interesting piece for Money Marketing encouraging the FCA to better distinguish between peer-to-peer lending and crowdfunding.  She argues that businesses taking a peer-to-peer loan go through a full credit check, similar to a traditional bank loan, therefore making it lower risk than crowdfunding, where some investors might see total capital loss.

Funding Circle raises $37M and heads across the pond

Funding Circle US will ‘cut out banks’

On 24 October we announced that we had raised $37 million and were joining forces with San Francisco-based business lender Endurance Lending Network (now known as Funding Circle) to help millions of businesses across America sidestep the broken banking system and access finance.  Our very own Samir Desai kicked the day off in style on the BBC Radio 4’s Today programme – take a listen. Other highlights include Reuters, Daily Telegraph, New York Times and Forbes.

Funding Circle Raises $37 Million and Launches in The U.S.

The go-to site for peer-to-peer lending news in the US, Lend Academy, also covered the news.  Peter Renton wrote he first met with Samir back in November 2012 when they discussed the US market generally.  At the time he said the peer-to-business market in the US was wide open with no established player, but in Peter’s own words: “that officially ends today with the launch of Funding Circle USA.” Thanks Peter! We’ll certainly be working very hard to help make sure that’s the case.

Martin Lewis reveals all

What I earned from peer-to-peer savings

Having invested money in three of the biggest peer-to-peer lenders in the UK, Martin revealed the various returns on his money and personal highlights of investing in each platform.  He also reminds potential investors how important it is to diversify something we believe in at Funding Circle as well.

Martin was also on BBC Radio 2 earlier this week explaining to presenter Vanessa Feltz how it all works, and how investors can make a much better return on their money.

Lending to small businesses: banks vs. peer-to-peer

Non-bank lending to small businesses at highest level since 2008

The Financial Times reported that non-bank lending to small businesses has hit a five-year high.  The UK’s commercial finance brokers have arranged £10.5bn of credit for small and medium-sized enterprises in the last year. This marks the highest figure since 2008 and an annual rise of 17 per cent.  Andrew Bounds argues that the data highlights the shift away from traditional bank lending to small business, which has shrunk by a quarter since 2011.

Net lending to businesses continues to contract

Mortgage Introducer picks up on similar news that high street banking figures from the British Bankers’ Association show that net lending to businesses has fallen in 8 of the last 12 months, despite growth of £2.5bn between August and September.  Adam Tyler, CEO of the National Association of Commercial Finance Brokers commented: “High-street lenders remain very selective in granting finance which is stifling small businesses and slamming the brakes on economic growth, particularly jobs and wages”.


Government participation in loans reducing to 10%

In March, the Government started lending to businesses through Funding Circle and until now, they have funded 20% of every loan that has appeared on the marketplace. From Friday 1st November, this figure will decrease to 10% of every loan.

Since they started lending through Funding Circle, they have lent more than £15 million to 1,100 businesses and played a big role in helping us to raise awareness and understanding of what we do.

We are hopeful that the Government will consider continuing to lend to businesses once they have lent out their £20 million allocation and we will keep you updated with any progress on this.

Our aim is to facilitate hundreds of millions of pounds of loans to British businesses every month in the next few years, and to do this we will require more sources of money from a variety of organisations. In November we are likely to see some of these new sources of finance start lending following the reduction in the percentage of Government funds. We will provide further information on this as timings become clearer.

People lending directly to businesses through Funding Circle have always been the core of what we are about and we will ensure this continues as we keep growing.


Funding Circle raises $37m in equity funding to expand UK operations and launch in the US

Today we’re excited to announce that we have completed a $37 million series C investment, led by Facebook backers Accel Partners.

This is one of the largest investment rounds made in Europe this year, showing how far Funding Circle has come in the past 3 years. In the last 12 months alone more than 1,800 businesses have accessed a total of £110 million from over 20,000 investors. The funds will be used to expand in the UK and launch in the US.

In the UK, the funds will be used to improve our service and introduce a range of new borrowing products for businesses, such as commercial property and asset finance. These will significantly increase the number of lending opportunities for investors.

Our vision is to give businesses a better way to borrow and investors a better way to earn a return. Since our launch in the UK, we have developed technology to allow businesses to borrow in a faster and more efficient way whilst allowing investors to make a better return on their money. We’re now excited to be taking this technology to the US.

We are joining forces with Endurance Lending Network to help millions of businesses across the US access finance. Endurance will now operate under the Funding Circle brand and their team will be based in San Francisco. Together as one business we combine their local knowledge and talent with our experience and innovative technology. The US business will operate separately from Funding Circle in the UK, so there will be no change to your lending experiences.

Today’s news is the beginning of an exciting 12 months at Funding Circle. You will soon see improvements and new functions appearing across the site and we’ll also be launching our mobile bidding app very soon.

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

The Funding Circle team


Bank lending to small businesses down again, but our figures show 30% growth for last quarter

Bank lending to small and medium businesses fell in the three months to August, according to figures published by the Bank of England today.  The Trends in Lending report showed that net lending to businesses of all sizes fell by £2.3bn.

Despite this drop  – that few will be surprised of – lending through Funding Circle has continued to accelerate. Lending increased by 30% in the last quarter with more than 570 businesses borrowing from Funding Circle investors. Compared to 12 months ago this figure is an increase of 170%.

As the economy continues to show positive signs, we’re looking forward to helping even more businesses access finance throughout this year and into 2014.


Downton Abbey’s lawn furniture and 7 other top peer-to-peer lending industry news articles


We started highlighting peer-to-peer lending industry articles in August to draw attention to the large amount of coverage out there on the topic. September is no different with a bumper month for peer-to-peer lending news coverage. Here are our favourite articles:

More than half of businesses believe that banks don’t care about them

No news here from Real Business but what is interesting is that ‘only’ 37% of small businesses knew about peer-to-peer lending. This number has certainly increased over the last year.

Funding Circle furnishes the lawns of Downton Abbey

If you’re a fan of the lawn furniture on Downton Abbey, and let’s be honest who isn’t, then you’ll be as excited as us to know that Funding Circle investors helped the company that created them with a £75,000 loan to continue growing. As reported by the Telegraph.

Infographic on SME borrowing in the UK

Ever wondered how much money small and medium businesses are borrowing in the UK? Turns out it’s a col £100bn according to this infographic by our friends over at The Funding Store.

The P2PFA is growing

The Peer-to-Peer Finance Association (of which, we were founding members) is growing with the addition of LendInvest and Thincats, although they were not mentioned in this article.

How to call the bank manager’s bluff

The Sunday Times speaks to Dessi Bell about how she uses invoice financing and peer-to-peer lending to help her sportswear business Zaggora overcome cash flow issues, no banks required. Well done you Dessi!


How to profit from crowdfunding

So even Kevin McCloud from Grand Designs is raising money via crowdfunding these days. He’s raised £1.4 million for his housing firm. The article also provides a decent explanation on the difference between crowdfunding and peer-to-peer lending.


Bank upstart’s rapid growth needs policing

Reuters features this well-balanced piece on the rapid growth of the peer-to-peer lending industry and why it needs to be regulated, a sentiment we wholeheartedly agree with.

A five minute guide to peer-to-peer lending and crowdfunding

This article by The Express pretty much does what it says on the tin, although it took me longer than five minutes to complete. Maybe I’m a slower than average reader.


Peer-to-peer lending to businesses filling the void in small business finance

Responding to today’s news that lending to small businesses fell by £900 million in July as part of the Government’s Funding for Lending scheme, Samir Desai, CEO and co-founder of Funding Circle said:

“At a time when the economy is showing signs of recovery it is imperative that finance can find its way through to the people who will do most to drive future growth and employment.”

“The peer-to-peer lending industry is stepping in where the banks are failing and filling the void by providing quick and accessible finance to small businesses. Thousands of people are choosing to cut out the middleman and lend directly to small businesses. Between June and July, hundreds of British businesses borrowed £14 million – up more than 20% on the previous month and 250% compared to the same period last year.”

“The Funding for Lending scheme may be failing businesses, but other Government-supported schemes, such as the Business Finance Partnership are proving to be very successful. Since April the Government has lent £10 million directly to more than 800 businesses through Funding Circle with owners obtaining their funds in a matter of days. This is yet another example that non-bank sources are better at ensuring finance flows to those that need it most.”

Since its launch in 2010, Funding Circle has helped more than 2,500 businesses to borrow in excess of £145 million. Almost 52,000 people have joined Funding Circle lending alongside the British Government, businesses, universities and a number of local councils.

Peer-to-peer lending continues to grow at an exceptional rate. More than £500 million has been lent through the three biggest peer-to-peer lenders, with recent predictions by Ernst & Young that the industry will grow to five times its size in the next three years.



9 biggest peer-to-peer lending stories for August

9 biggest peer-to-peer lending news stories for August

Here’s a round up of the most important peer-to-peer lending industry news for the month of August. Did we miss something? Let us know in the comments.

Digital finance lending set to hit £1bn

The Financial Times digs into data released by the Open Data Institute which says that the peer-to-peer lending industry in the UK will be worth £1bn by 2016. They also take the time to look back to see that the market has trebled in 3 years to £550m. Good article, although their use of the term ‘digital finance’ is questionable!

Peer-to-peer lending boom has just begun

Continuing the theme of good times and growth in the peer-to-peer lending industry, The Daily Mail interviewed the Funding Circle co-founders on the week of our third birthday, asking questions about the business and the potential for the industry. They were kind enough to include our vital stats to date: Over 2,500 British companies have now received more than £135m of loans from in excess of 50,000 people in the UK through the ‘peer-to-peer’ lender.

Peer-to-Peer Lending Likely to Continue its March Into the Mainstream

The Huffington post joins in the growth stories this month by reporting on peer-to-peer lending’s march into the mainstream, calling it one of the most exciting developments of recent modern finance. We couldn’t agree more.

Funding Circle open its doors to sole traders as the lend-to-save firm looks to support ‘finance-starved’ businesses

More news about Funding Circle from the Daily Mail! This time they’re discussing how Funding Circle is dipping its toes into providing loans for Sole Traders, which was announced on our blog. The Scottish Herald reported on the first sole trader business to benefit from the trial, Howie’s Bistro, based in Dunkeld who raised £35,000 from 356 people in just six days.

Savers find way to beat low interest rates and inflation

The Scottish Express focusses on a report by the CEBR about savers that have turned to peer-to-peer lending and achieved a better return than an ISA. This is all good news but it’s worth remembering that peer-to-peer lending is a risk-based product, so you should do your research before diving in.

Savers risk big losses at peer-to-peer start-ups

This article by The Telegraph sounds scary at first but as you read on, you’ll find it is more a warning to savers to be careful about which website they choose to lend on and suggest it may be safer to stick with the more established peer-to-peer lenders.

Caveat Emptor Banking: Peer-To-Peer Lending Challenges Too-Big-To-Fail Status Quo

Possibly the most amazing description of peer-to-peer lending I have ever seen, Forbes dives deep into the industry comparing it’s attributes to the ‘too-big-to-fail banks’. Very interesting reading indeed.

Talks begin to include peer-to-peer lending in ISAs

Super snooper, Dan Hyde from the Telegraph, has discovered that HMRC is in discussions with the industry to talk about including peer-to-peer lending into ISAs. This of course is a move we welcome and have spoken numerous times about the need for tax breaks for peer-to-peer investors.

Revenge of the nerds

The Economist explores the tech startups in London, San Francisco and New York that are taking on the world of finance, in what they describe as an explosion. It seems the rebellion is turning into an industry and it’s great to see innovation solving problems for consumers that bigger organisations won’t. We’d like to point out that we don’t drink lattes near our laptops, this is an accident waiting to happen, and we only get free fruit on Tuesdays. Although hearing that other startups get free food, we might raise this with management.



Welcome to the new Funding Circle blog

We’re excited to present to you the new Funding Circle blog!

Maintaining transparency and an open dialogue with our investors and businesses will always be a key priority at Funding Circle. We know that regular updates, communication and information help you to be more effective and successful within the marketplace.

Over the past few years, the blog has become one of the go-to channels for our community to catch up and comment on the latest happenings at Funding Circle. We’ve received a lot of suggestions from many of you about what kind of content you’d like to see on the blog which has helped us define and grow the relevance and volume of our communications.

The new blog not only looks great (we hope you agree!) on the surface, but it is very powerful and flexible under the hood which will help us serve your information needs better. The design also works hard to highlight some of the amazing businesses on Funding Circle, helping tell their story and giving a sneak peak into the businesses that the investors among you have helped to grow and flourish.

We truly hope you find the new blog to be helpful and informative. It is, after all, here to serve you.

Enjoy watching and reading! The Funding Circle team.



New business types coming to the Funding Circle marketplace

Over the coming week you’ll see loan requests for new types of businesses listed on the marketplace which will be available for you to lend to. Previously, only limited companies and limited liability partnerships (LLPs) have been able to apply for a business loan through Funding Circle but from this week, you’ll be able to start lending to non-limited companies, in the form of sole traders and partnerships, too.

Why are we doing this?

More than 70% of all businesses in the UK are non-limited, including some partnerships and sole proprietors. By expanding the types of businesses we lend to, we can help support even more enterprises across the UK while offering a greater variety of lending opportunities for investors.

What’s the difference between limited and non-limited companies?

There are two key differences between limited and non-limited companies. Firstly, owners of limited companies are not liable for the debts owed by the business; their personal liability is limited. The owner of a non-limited company on the other hand is liable and has a personal obligation to repay any debts; their personal liability is unlimited. The second key difference is that a limited company is required to file their accounts and key documents at Companies House whereas non-limited companies do not. You can read more about these types of businesses in our help centre.

Who are non-limited companies?

Non-limited companies include professionals such as barristers, doctors and veterinary practitioners as well other business types such as farms. They can look like a limited company, for example by having many employees but may have been formed as a non-limited company many years ago and have evolved since then.

Will there be any other differences between the businesses I’ll lend to?

Non-limited companies must pass very similar qualification criteria to limited companies, in that they are required to have maintained a good credit history, have at least 2 years of accounts & trading history, have no county court judgements (CCJs) over £250 and pass Funding Circle’s full credit assessment. The non-limited companies will be put into the same A+ to C- risk bands as limited companies according to their level of risk and level of expected bad debt.

Non-limited companies will be able to borrow from £25k (vs £5k for limited companies) due to regulatory differences.

How will this affect my lending?

If you’re an Autobid user, there’s nothing you need to do to lend to these businesses via Funding Circle. Your Autobid will automatically include all types of businesses when bidding and buying loan parts.

If you place bids manually, you’ll be able to see the company type on the individual loan request page.

We’re excited to help more small businesses, the backbone of the British economy, with access to finance and we’d love to hear your thoughts on this. You can join the discussion on our community forum.


More businesses to lend to with our new risk band

Following the successful launch of C band loans in September 2011, we are introducing a fifth risk band, which will increase the number and variety of businesses available on Funding Circle for you to lend to. You can expect to see some of these new rated loans on the marketplace from tomorrow.

We are introducing this new risk band because we want to support even more British businesses to sidestep the banks and access the finance they need to grow. It will also offer an attractive risk-return profile for investors with the minimum bid rate for C- band loans being set at 11.5%, and the expected annualised bad debt rate is 5%. Read more about expected annualised bad debt rate and how to manage your risk.

Having a new risk band will naturally change a few things when it comes to lending through Funding Circle, so here’s a quick checklist of what to consider when making your lending decisions:

  • If you currently have Autobid turned on, it will not bid on loan requests in the new C- risk band. If you want to allow Autobid to bid on C- borrowers, you will need to log into your account on or after Wednesday 10th July 2013 and simply turn Autobid off and then on again and this will automatically include C- band.
  • If you are a new investor and have not yet turned Autobid on, loans in the C- band will be included when you turn your Autobid on. If you do not want to lend to C- band businesses, go to Advanced Settings on the Autobid tab.
  • Loans in the C- risk band will initially have a minimum bid rate of 11.5% to reflect the higher level of risk. The estimated annualised bad debt rate is 5%.
  • Remember all businesses listed, including those with C- risk bands, are required to have maintained a good credit score, have at least 2 years filed accounts, have no county court judgements (CCJs) over £250 and pass Funding Circle’s full credit assessment. As with all loans, businesses allocated to the C- risk band must demonstrate that the loan is affordable.
  • Similar to loans in other risk bands, in almost all circumstances a personal guarantee will be requested for C- band borrowers which will be clearly shown on the loan request page.

We are excited to grow the marketplace by providing even more lending opportunities for investors, allowing them to earn attractive returns and support British businesses.

– See more at: https://www.fundingcircle.com/about-us/our-blog/more-businesses-to-lend-to-with-our-new-risk-band#sthash.dDPw1fLd.dpuf

Update on the Minimum Bid Rate trial

Last week we introduced a trial of new minimum bid rates by risk band. Prior to this change the minimum interest rate you could bid on a loan auction was 4% across all risk bands. This was increased on 24 June 2013 and you can read our blog post announcing this initial change here.

When deciding to increase the minimum bid rate, we take into consideration a range of factors. These include the cost of alternative borrowing products, the returns available on other investment products, the general economic conditions, protecting investors from bidding rates significantly below the average and the estimated bad debt rates for each risk band.

Since announcing the start of this trial, we have received valuable feedback from investors on the forum, and also through a survey sent out on Friday, which you can see the results of here. Regular feedback from investors and borrowers is crucial to the success of Funding Circle and we’d like to thank everyone who has taken part so far.

Following the feedback we will be adjusting the trial minimum bid rates to the following levels:

A+ risk band: 6.0%

A risk band: 7.0%

B risk band: 8.0%

C risk band: 9.0%

Going forward we are committed to reviewing minimum bid rates on a monthly basis and providing two weeks’ notice of any future changes. This will ensure investors are aware in advance of any changes and there is minimal impact on market behaviour or an individual’s investment experience. Additionally, any future adjustments will be introduced incrementally at a maximum of 0.5% (+ or -) of the existing minimum bid rates across each risk band.

Samir, our CEO, and other team members will be discussing the minimum bid rate trial on the forum, and the rationale behind the decisions we took. If you have specific questions or would like to discuss this in more detail, please post a question and we will be happy to answer.


Introducing new minimum bid rates

We want lending at Funding Circle to be as rewarding as possible which is why we are now trialling a different minimum bid rate for each risk band.

Previously the minimum interest rate you can bid on a loan auction is 4% across all risk bands. This will now be increased in steps accordingly across all risk bands and the new minimum rates will reflect the associated risk of each band.

We believe that this will create more stability in the market, promoting a sustainable environment for both investors and businesses.

When will this happen and what will the rates be?

From this morning, 08:00 Monday 24th June, we will begin the trial of the new minimum bid rates for all new loan auctions. Here is the breakdown of the new rates:

A+ risk band: 6.0%
A risk band: 7.5%
B risk band: 9.3%
C risk band: 10.5%

These minimum bid rates may be adjusted as market conditions change and you can view the current minimum bid rates here.

What does this mean for investors?

If you bid manually, then the main change to keep in mind is that there is now a minimum rate you can bid at for all new loans, which depends on the risk band of the business. This will be the minimum rate you can select on the loan auction page where 4% was the previous minimum.

If you’re using Autobid, it will only ever bid on auctions at or above your Autobid rate. If your Autobid settings are below the minimum bid rate, Autobid will automatically bid on the marketplace at the minimum rate.

The minimum bid rate only applies to new auctions, so if you’re buying loan parts from other people, Autobid will buy loan parts at or above your Autobid rate. Remember Autobid only buys loan parts that are sold by other investors at par value.

Additional information on how minimum bid rates will work

There will now also be a limit on the portion of a loan that can be funded by Autobid users at the minimum bid rate, to ensure that both Autobid users and those bidding manually have equal opportunities to lend on a loan requests.

Up to 50% of the available amount of the loan can be funded by Autobid users bidding at the minimum bid rate. So on loans where Government funds 20% of the loan, a maximum of 40% of the loan can be funded by Autobid users at the minimum rate. Autobid users will be able to fund more of the loan if they bid above the minimum bid rate.

The introduction of minimum bid rates for loan auctions will allow the possible introduction of new risk bands in the future.

You can discuss how minimum bid rates may affect your investing strategy with other community members in our forum.

Enjoy Lending,

The Funding Circle Team



Nesta and Funding Circle report reveals peer-to-peer lending has potential to deliver £12 billion in business lending

Click the image to view the supporting infographic


Today we’re excited to help launch a new report by Nesta that looks at peer-to-peer lending for businesses.

The report titled Banking on Each Other is part of a project Nesta has been undertaking over the last year and involved research with both Funding Circle borrowers and lenders.

The report – the first time an in-depth piece of independent research has been conducted into peer-to-peer business lending – looked at the characteristics and motivations of both Funding Circle lenders and borrowers and draws some very interesting conclusions about the future for peer-to-peer lending to businesses.

Highlights from the report, which has been endorsed by the CBI and Federation of Small Businesses, included:

  • 77% of businesses said they would come to Funding Circle first for future finance needs, rather than going to their bank. Business owners cited frustrations with the lengthy application process with banks as their reason for using peer-to-peer lending.
  • Even if banks offered a similar facility, only 27% of businesses would approach the banks first.
  • Lenders place greatest importance on interest rates to explain their motivation of why they start lending to businesses, with 75% suggesting they would increase the amount they lend within the next year.

What is particularly exciting about the report is that Nesta believes in time the peer-to-peer lending industry has the potential to deliver as much as £12.3 billion in business lending annually.

This is a pioneering piece of independent research and we are pleased to have been able to support Nesta to undertake it. As we approach the milestone of having facilitated £100 million lent to businesses, we recognise that there is a huge opportunity for us and others in the peer-to-peer lending industry to help fill the finance gap that British businesses are facing.

This report is well worth a read and you can download it here.


The Funding Circle team

– See more at: https://www.fundingcircle.com/about-us/our-blog/nesta-and-funding-circle-report-reveals-peer-to-peer-lending-has-potential-to-deliver-12-billion-in-business-lending#sthash.9w3a9x8p.dpuf


Introducing net returns and diversification data


We want lending at Funding Circle to be as straight-forward as possible so we’re always looking for ways to improve the information we provide you. Having spoken to many investors over the past few months, we can see there are some valuable changes we can make:

  1. Displaying net returns after fees and bad debt: to show an average across all investors and also showing individual net returns in your account.
  2. More information on the distribution of net returns across investors and how these returns vary by level of diversification: allowing you to compare the returns for those investors lending to a handful versus those lending to hundreds of different businesses.

This new information will not only help you make more informed lending decisions, but make it simpler to track the returns you earn as a result. We’re part-way through these changes and you’ll see them across the site in the coming weeks, but in the meantime we wanted to share a preview with you.

The average net return (after fees and bad debts) across all investors who have been lending for more than 180 days currently stands at 6.2%. 75% of investors that are lending to at least 100 businesses (with a maximum exposure of 1% of their total lending to any one business) have earned more than 6% net per year. The charts below show the distribution of net returns for investors who have lent to a least 100, 50 or 10 businesses with a 1%, 2% or 10% maximum exposure respectively.

You can read more about the net returns and diversification calculations, the methodologies used and their limitations in our post on the Funding Circle forum, together with comments from other investors.





– See more at: https://www.fundingcircle.com/about-us/our-blog/introducing-net-returns-and-diversification-data#sthash.IkS8CKA6.dpuf

Government to start lending through Funding Circle

Click the image to view the supporting infographic: The Rise of Peer-to-Peer Lending


In December, the Government announced that it was their intention to lend £20 million to British small businesses through Funding Circle, as part of the Government’s Business Finance Partnership scheme (BFP).

Today, we’re pleased to confirm that the process with the Department for Business Innovation and Skills (BIS) has been completed, contracts have been signed and from Monday 25th March, the Government will start lending.

Before this begins, however, we wanted to update you all on how this will work and why we believe Government involvement will increase awareness of Funding Circle in the business community and consequently provide more lending opportunities for investors.

Why is the Government doing this?

Despite many initiatives to stimulate bank lending over the last few years, net lending to businesses has continued to decline. Whilst bank lending to businesses has deteriorated, Funding Circle has rapidly grown. In two years since we launched, thousands of British people have helped to lend nearly £90million to more than 1,700 businesses. In the last 30 days, investors have lent £10m to British businesses.

The Government has now recognised the impact that non-bank channels, such as Funding Circle, can play to help ease the flow of finance to businesses.

How will lending work?

From Monday, the Government will start lending to all businesses which meet their criteria (more details on this are available in our FAQs). They will fund each loan at a set amount which will be fixed at any point of time.

This will start at 20% of the total loan amount, as shown in the picture below, and will decrease over time as the £20 million runs down and the value of loans being accepted through Funding Circle increases.

The remaining 80% of a loan will be funded in the normal way and your lending experience will stay the same. Once a loan closes, the Government will fund the 20% at the average interest rate of all successful bids on that specific loan.

The Government will only take part in new loan requests and will not purchase any loan parts from existing investors.

Will this affect opportunities to lend?

Since the Government first announced plans to lend through Funding Circle we have seen an upsurge in interest from businesses. Many businesses have told us that this is directly as a result of the Government news.

Interest from businesses has particularly picked up over the last two months. As result, in the last 30 days there have been more opportunities to lend than ever before with £10m being lent to more than 170 different companies. The Government’s involvement will also allow us to list larger loans on to the marketplace and as such we have increased the upper loan limit to £1 million.

There is approximately £7 billion of lending to businesses every month in the UK, so the opportunities remain significant. We will be working hard over the coming months and focusing our efforts on attracting more businesses to join Funding Circle.


We hope that you feel this move is an exciting and positive step for Funding Circle, and will help produce more opportunities to lend. We are absolutely committed to ensuring everyone continues to enjoy lending through Funding Circle.

If you would like to find out more information, you can read our FAQs, or head over to the forum to join the discussion with us and other members.

The Funding Circle team

– See more at: https://www.fundingcircle.com/about-us/our-blog/government-to-start-lending-to-businesses-through-funding-circle#sthash.cq5tXosj.dpuf


10 exciting developments to expect from Funding Circle in 2013


This year is already shaping up to be an exciting one for the Funding Circle community. With 2013 officially underway, we thought we’d share with you some of the more interesting developments that will affect your experience on the marketplace.


The £100 million milestone

A major milestone for the marketplace is quickly approaching: £100m in loans funded on Funding Circle. At the time of writing this, we are just about to cross the £70 million mark. Our expectation is that we will pass the £100 million milestone sometime in the first half of the year, can you predict when?


Government funds start being invested

We announced in December that the Government will be investing £20 million through Funding Circle. The funds should become available for investment in the next few months. We’ll keep you updated on when this happens.


Regulation of the Peer-to-Peer industry commences

Consultation on the Financial Services Bill will begin in January, which is the first step in the Peer-to-Peer finance industry becoming regulated. We welcome this move and the resultant regulation should see many benefits for organisations, borrowers and investors alike.


The Funding Circle community

We launched the new Funding Circle forum in December. The ambition, with your help, is for it to become a valuable resource for anyone investing or borrowing on Funding Circle or anyone thinking of doing so. We’ll also be growing our presence across the major social channels so you can engage with us on the platform of choice. We’re currently on FacebookTwitter and our own blog. Look out for our new presences on Google+ and Pinterest in the near future.


Secondary loan parts market

We are currently reworking the secondary market to make it much more useable and dynamic, with a lot of your suggestions coming to life in the new version. Based on some of the conversation on the forum, it appears that these will be welcome changes for the investor community.


Sole trader finance

We have always experienced a strong demand for the marketplace to offer loans to Sole Traders . We have been exploring the option for a few months now so look out for more news on this pretty soon.


Asset finance review

We are reviewing our asset finance product to create more opportunities on the marketplace for both borrowers and investors. The product will provide additional security for our investors and offer businesses more financing options.


More investment data

We’ll be exploring ways of presenting more Funding Circle data on the forum, giving you more insight into what is going on in the marketplace and hopefully helping you become a more successful investor on the Funding Circle marketplace.


Description and listing pages

We are currently working on creating much clearer and easier-to-use business description and auction listing pages. In the coming year, we’ll look to give a similar makeover to all parts of the site.


iPhone and iPad apps

One of the more exciting projects for the year will see us developing iPhone and iPad applications to make it easier to interact with the marketplace wherever you are. We will also be looking to make our site a lot friendlier to use on smartphones and tablets.

What else would you like to see from Funding Circle this year? Tell us in the comments

– See more at: https://www.fundingcircle.com/about-us/our-blog/10-exciting-developments-to-expect-from-funding-circle-in-2013#sthash.Xu3sxFBy.dpuf