Displaying estimated returns

At Funding Circle we are constantly reviewing the information we provide to investors and we’re committed to providing simple and easy to understand information about how Funding Circle works, to help investors make an informed and educated decision about lending.

One area we have been reviewing recently is how we display annual returns investors can expect to achieve. As many of you will know, traditionally we have displayed this return based on past performance of loans.

Whilst we’re happy with how we display this information, we want to do more to give investors an up-to-date representation of the returns they could earn from lending to businesses seeking loans today. Therefore, from today you will see that we are also starting to show current estimated returns. We feel this is a more accurate reflection of the rates people can expect to achieve from lending today.

This figure is calculated based on the average gross interest rate from the last 100 loans, minus our annual fee and expected annual bad debts. It is compounded and before tax. You can read more details on the calculation here. We will still continue to clearly display past returns on our statistics page.

If you have any questions please get in touch or join the conversation on the forum.

The Funding Circle team​.

 

Record £6.4m lent to coincide with our 4th birthday. Weekly Lending Review

Week 33: 11 – 17 August 2014

Last week, we welcomed over 100 new businesses to the marketplace; the majority of which were allocated an A risk band.

Investors had bids of up to 15% accepted on loans in the C risk band, and bids of up to 14.1% in loans in the A+ risk band*. We also saw a record £6.4 million lent to businesses across the UK, thanks to all of your lending.

New loans

There were 102 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £6,836,040; that’s an average of £67,020 per loan. The largest loan value was £460,000 and the smallest loan value was £6,260.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn. Number of loans and value of loans are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 11-Aug represents the week of 11th – 17th August.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

News you should know

Update to minimum bid rates

We review the minimum bid rates in the middle of every month to decide whether they should be changed or kept the same. A number of factors are considered when reviewing the rates, including general economic conditions and costs of alternative borrowing products. This month, we have decided to increase rates by 0.2% on the C- risk band. These changes will take effect on Monday 1st September. The new minimum bid rates for loan requests listed after 9am on 1st September are as follows:

A+: 6% (no change)

A: 8% (no change)

B: 9% (no change)

C: 10.2% (no change)

C-: 12.2% (+ 0.2%)

Happy Birthday Funding Circle!

It was our 4th birthday last week and to celebrate, we published an infographic which tracks the rise of peer-to-peer business lending up to this year, when the industry became formally regulated.

2 weeks left to share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses by the end of the offer period, you could each have £50 cashback** paid into your Funding Circle accounts. There’s only 2 weeks to go to recommend a friend to Funding Circle, so make sure you don’t miss out.

Loans defaulted last week

Radiator retailer. Loan ID 2125

This Northill business has been trading since 1997 and is in liquidation. The original loan amount was £100,000 and all affected investors have been notified.

Heating maintenance business. Loan ID 2721

This Widnes business has been trading since 1995 and is in arrears with repayments. The original loan amount was £30,000 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

 

Enjoy lending, The Funding Circle Team

 

* Based on all successful bids in loans accepted on the marketplace from 11th August – 17th August.

**Terms and conditions apply

 

Helping more businesses and £6m of new loans. Weekly Lending Review

Week 28: 7 – 13 July 2014

It was a great week for listings as 109 new lending opportunities became available to you, with the total value of over £6 million. Of the loans that were listed last week, manufacturing was the most common sector and working capital was the most popular reason for funding.

New loans

There were 109 new business loans listed last week and there are currently 84 auctions on the marketplace.

The total value of the new listed loans was £6,171,580; that’s an average of £56,620 per loan. The largest loan value was £370,000 and the smallest loan value was £5,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn. Number of loans and value of loans are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 7-Jul represents the week of 7th – 13th July.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Summer special: share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses, you could each have £50 cashback* paid into your Funding Circle accounts.

Update to minimum bid rates

We review the minimum bid rates in the middle of every month to decide whether they should be changed or kept the same. A number of factors are considered when reviewing the rates, including general economic conditions and costs of alternative borrowing products. This month, we have decided to increase rates by 0.1% on both the C and C- risk bands. The new rates will take effect on Friday 1st August. The new minimum bid rates for loan requests listed after 9am on 1st August are as follows:

  • A+: 6% (no change)
  • A: 8% (no change)
  • B: 9% (no change)
  • C: 10.2% (+ 0.1%)
  • C-: 12% (+ 0.1%)

Planned business advisory service for our borrowers

We’re planning to launch a free advisory service for Funding Circle borrowers, to help them make the most out of their Funding Circle loan. This will include a 60-90 minute session from a Funding Circle account manager and an independent business advisor of their choice, to look deeper into any business need they’d like to focus on.

Assessing more businesses on a case by case basis

As part of our ongoing work to improve and innovate the service we provide to both borrowers and investors, we are starting to review loan applications where the business has a turnover between £50k and £100k.

Loans defaulted last week

Film equipment provider. Loan ID 2009

This Guildford business has been trading since 2005 and entered administration last month. The original loan amount was £100,000 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

*Terms and conditions apply.

 

Cashback & £6.9m of new loans

Week 13: 24 – 30 March 2014

It was the biggest week to date for the number of loans listed on the marketplace, with 121 new lending opportunities available, totalling nearly £7 million.

Funding Circle investors have also secured interest rates of up to 13.5%, 14.6% and 15%* on loans in the A+, A and B risk bands over the past 7 days, and with 1% cashback** available on certain loan requests, it’s an exciting time to lend.

New loans

There were 121 new business loans listed last week and there are currently 91 auctions on the marketplace.

The total value of the new listed loans was £6,859,760; that’s an average of £56,692 per loan. The largest loan value was £156,260 and the smallest loan value was £10,000.

Business loans still available for bidding on for the next 3 days or more:

News you should know about

A great budget for peer-to-peer lending

In the March Budget it was revealed that peer-to-peer lending will be included in ISAs and there will be a consultation into the referral of small business leads from banks to alternative funders.

Community Forum

The forum was down last week for maintenance but it is back up and running and it has a new look too. Start talking to others on our community forum.

Loans defaulted last week

Printers and designers. Loan ID 2222

This business designs and prints marketing materials and has fallen into arrears with repayments. The original loan amount was £25,000 and all 379 investors have been notified.

Paint supplier. Loan ID 466

This South Shields business has been trading since 1974 and has fallen into arrears. The original loan amount was £50,000 and all 479 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loan.

Enjoy lending, The Funding Circle Team

 

 

*Based on successful interest rate bids on all loans accepted between 25/03/2014 and 31/03/2014. See our statistics page for the latest accepted rates.

**Terms & conditions apply.

Investment through Funding Circle involves lending to small and medium sized businesses, so your investment can go down as well as up. Remember, past returns are not necessarily a guide to future returns.

Rules for peer-to-peer lending announced. Your weekly lending review

Week 10: 3 – 9 March 2014

Last week, 97 new loans were listed on the marketplace, most of which were allocated to the A risk band. The majority of businesses looking for funding were located in the South East of England and the most popular business sectors were manufacturing and property & construction.

New loans

There were 97 new business loans listed last week and there are currently 90 auctions on the marketplace.

The total value of the new listed loans was £5,285,700; that’s an average of £54,492 per loan. The largest loan value was £150,000 and the smallest loan value was £6,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average. Number of loans, value of loans and secondary market are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 3-Mar represents the week of 3rd – 9th March.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

News you should know about

Peer-to-Peer Lending Regulation

Last week, the Financial Conduct Authority published the final rules for peer-to-peer lending which will take effect on 1st April.

The top 6 P2P industry news articles from last month

Including the Daily Telegraph kicking off a campaign which called for peer-to-peer lending to be included within a stocks and shares Isa.

Recommend a friend and share £80

If you recommend a friend to Funding Circle and they lend at least £1,000 to our great British businesses, you could each have £40 cashback* paid into your Funding Circle accounts!

Community Discussions

This week we’re talking about display suggestions for the loan request page. You can join the discussion on our community forum.

Unsure how to get started with lending?

Take 5 minutes to read through our blog which explains how to start lending to businesses through Funding Circle.

Loans defaulted last week

Camping shop. Loan ID 1950

This Swansea business has been trading since 2003 and has failed to keep up with repayments. The original loan amount was £51,500 and all 568 investors have been notified.

Windows manufacturer. Loan ID 1873

This Newark business has been trading for 6 years and went into liquidation in December. The original loan amount was £25,000 and all 238 investors have been notified.

Printing company. Loan ID 71

This Wiltshire business has been trading for 20 years and has failed to keep up with repayments. The original loan amount was £30,000 and all 253 investors have been notified.

Solicitors firm. Loan ID 3298

This St Albans legal firm has been trading for 6 years. The original loan amount was £100,000 and all 1,076 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loan.

Enjoy lending, The Funding Circle Team

* Terms & conditions apply

Read last week’s lending review

iPad app & update to the annual net return. Weekly Lending Review

Week 8: 17 – 23 February 2014

Last week, a record £6.3 million worth of new loans were listed on the marketplace, available for you to lend to. The majority of loans were assigned to the A risk band and the South East of England had the most businesses looking for funding.

Investors have also secured rates as high as 15%, 14.9% and 14.7% for loans accepted in the C-, B and A risk bands respectively* so now is a great time to increase your lending to businesses across the UK.

New loans

There were 97 new business loans listed last week and there are currently 84 auctions on the marketplace.

The total value of the new listed loans was £6,313,520; that’s an average of £65,088 per loan. The largest loan value was £250,000 and the smallest loan value was £10,400.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average. Number of loans, value of loans and secondary market are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 17-Feb represents the week of 17th – 23rd February.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Our iPad app has landed in the App store

You can now download the Funding Circle app for free for use on your iPad. You won’t miss out on the end of auctions again as you can turn on alerts which will notify you of auctions closing.

Annual net return increase

Last week we updated the headline annual net return rate across the site. We have also decided to change the headline rate from a simple average to a weighted average based on the amount each investor has lent, as we think this is a better reflection of the performance of all lending.

Recommend a friend and share £80

If you recommend a friend to Funding Circle and they lend at least £1,000 to our great British businesses, you could each have £40 cashback** paid into your Funding Circle accounts!

Community Discussions

This week we’re talking about interest and fees. You can join the discussion on our community forum.

Unsure how to get started?

Take 5 minutes to read through our blog which explains how to start lending to businesses through Funding Circle.

Loans defaulted last week

Egg producer. Loan ID 1396

This Scarborough business produces free range eggs and has been trading since 2010. The original loan amount was £20,000 and all 234 investors have been notified.

Adult careers service. Loan ID 1546

This Bridlington business has been trading since 2001 and has failed to keep up with repayments. The original loan amount was £50,000 and all 571 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loan.

Enjoy lending, The Funding Circle Team

 

*Based on all successful bids into loans accepted between 17/02/2014 and 23/02/2014. For further information please see our statistics page.

** Terms & conditions apply

 

Annual net returns update

Today, we’ve updated the headline annual net return rate across the site.

The previous reported headline rate was a simple average across investors and was 5.7%. This has now risen to 5.8%.

As part of this update we have decided to change the headline rate from a simple average to a weighted average based on the amount each investor has lent.

Given the range and types of investors on the site, we think this is a better reflection of the performance of all lending through Funding Circle. We also expect this approach to be in line with FCA regulation starting in April 2014. The headline rate is now showing as 6.1%, up from a comparative figure of 5.9% previously.

The weighted average for investors who are lending to more than 100 businesses with a maximum exposure of 1% of their lending to anyone business is 6.3%, and 71% of investors are earning more than 6%, up from 62% in the previous period.

net returns

You can see the full updated statistics on the statistics page.

Enjoy lending

Updates to the Terms & Conditions and Minimum Bid Rates

Weekly Lending Review 

Week 7: 10 – 16 February 2014

Last week, a record £5.4 million made its way to businesses across the UK thanks to your lending. We also saw close to 100 new business loans available for you to lend to, totalling £5.6 million.

The average gross yield for investors has been increasing steadily over the past month across all risk bands, with rates as high as 15%, 14.8% and 14.4% accepted into loans last week, in the C-, B and C risk bands respectively.*

New loans

There were 96 new business loans listed last week and there are currently 86 auctions on the marketplace.

The total value of the new listed loans was £5,632,880; that’s an average of £58,676 per loan. The largest loan value was £150,000 and the smallest loan value was £5,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average. Number of loans, value of loans and secondary market are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 10-Feb represents the week of 10th – 16th February.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Updates to the Terms & Conditions

We’ve made some change to our terms & conditions which will reflect (1) improvements to our debt collection processes, (2) more lending and borrowing opportunities, and (3) necessary changes for FCA regulation later this year. You can read about the changes in more detail on our blog. It’s important to have a look, as by continuing to use the Funding Circle marketplace you agree to be bound by these revised terms.

No change to minimum bid rates

We review the minimum bid rates in the middle of every month to decide whether they should be changed or kept the same. Minimum bid rates for March will remain at February levels, as the majority of loans have been clearing above these rates: 6%, 7.9%, 8.9%, 9.9% and 11.6% for the A+ to C- risk bands.

Recommend a friend and share £80

If you recommend a friend to Funding Circle and they lend at least £1,000 to our great British businesses, you could each have £40 cashback** paid into your Funding Circle accounts!

Unsure how to get started?

Take 5 minutes to read through our blog which explains how to start lending to businesses through Funding Circle.

Community Discussions

This week we’re talking about updates to the T&Cs. You can join the discussion on our community forum.

Loans defaulted last week

Berkshire restaurant. Loan ID 697

This business operates a Michelin star restaurant and has been trading since 2004.The original loan amount was £100,000 and all 727 investors have been notified.

Fish & chip restaurant. Loan ID 135

This Norfolk business has been trading since 2006 and suffered a fire at their premises last year. The original loan amount was £30,000 and all 308 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

* Based on all successful bids into loans accepted between 10/02/2014 and 16/02/2014. For further information please see our statistics page.

** Terms & conditions apply.

 

Updates to the Terms & Conditions

Today we will be making some changes to the Terms & Conditions which will affect all of our community.

As you may already know, we will be launching new borrowing products in the near future, such as asset and property finance, as well as opening more channels through which you can lend your money – the iOS mobile app for example. Through the introduction of these new products, there will be many more lending opportunities and specifically more lending opportunities on larger loans, so we have made some changes to the terms and conditions to reflect these new types of loans.

In addition, we want to ensure that we are in a more flexible position to deal with borrowers who are unable to keep up with their monthly repayments. These changes should help us reach a better outcome for both investors and businesses.

Here are the key changes you should know about:

1. Information from borrowers: We have added requirements for borrowers to provide information to us if we request it, during the life of the loan.

2. Restructuring loans: In certain circumstances we’ll be able to agree an extension of the loan term with borrowers (provided there is an increase in the interest rate), which may help borrowers stay in business whilst making regular repayments back to investors, rather than placing the loan into default.

3. Flexibility of default date: If there is one late payment for a loan, we may place the loan into default (after 10 working days) if we believe this will maximise recovery.

4. Restrictions on loan participation: A single investor (either retail or institutional) can fund up to a maximum of 20% of each loan through the API.

5. Our ‘website’ is now our ‘platform’: To better describe our service due to the apps we will release in the future.

These changes will be reflected in the updated Loan Conditions, as well as the Terms & Conditions for investors, borrowers and intermediaries. It’s important to have a look, as by continuing to use the Funding Circle marketplace you agree to be bound by these revised terms. From later today, before making a bid you’ll also be asked to reaccept the Loan Conditions.

 

3 ideas to help your business grow

We’re committed to helping British businesses grow so we’ve asked one of our great business owners for her ideas on how to run one successfully. We visited Michelle Partington, of Lakeland Picnic in the Lake District and captured her thoughts in this video.

Michelle setup Lakeland Picnic in 2007 as she wanted to make and sell delicious hot food at events and shows in the North West. The team manufactures burgers and sausages at Holme Mills farm in the Lake District and sells them at street stalls across the country.

Her 3 tips are:

Tip 1: Support your team in their strengths and encourage learning.

Tip 2: Have a network of people who you can rely on for advice.

Tip 3: Don’t just plan it. Go fot it!

Watch the video for more detail on each tip.

Lakeland Picnic borrowed £17,500 in September from 221 people through Funding Circle to update their street stalls. If you’re looking for business finance, find out how your business loan could be funded by people across the UK in a matter of days.

The Weekly Lending Review: Week 30

Week 30: 22 – 28 July 2013

Over £3.6 million worth of new lending opportunities were listed on the marketplace last week, including loans to a leading fireworks display supplier and a designer of women’s clothes. Of the 58 new loans, the majority were allocated to the C risk band.

New loans

There were 58 new business loans listed last week and there are currently 41 auctions on the marketplace.

The total value of the new listed loans was £3,613,500; that’s an average of £62,302 per loan. The largest loan value was £150,000 and the smallest loan value was £7,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average. Number of loans, value of loans and secondary market are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 8-Jul represents the week of 22nd – 28th July.

Weekly average gross yield (2 weeks rolling)

yield.jpg

Number of listed loans per week

number.jpg

Listed loan value per week

value.jpg

News you should know

We visited Bramley & Gage, a manufacturer of fruit liqueurs and gin in Gloucestershire, after they took out a £25k business loan in May. They used their loan to buy a new gin still which will allow them to increase capacity. In this video we explore how the family business started and became what Bramley & Gage is today.

The refer a friend promotion will end on the 31st July at 17:00 so be sure to get your recommendations in before then if you’d like to earn cashback for you and your friends.

Community Discussions

This week we’re talking about how peer-to-peer lending to businesses is taxed. You can join the discussion in our community forum.

Loans defaulted last week

Branded jeans company. Loans 1471 and 898 This London-based business designs and sells women’s jeans and encountered cashflow difficulties earlier this year. The original loan amounts were £156,000 and £95,000 and all 1,301 investors have been notified.

Computer system supplier. Loan 1814 This Bolton-based business has been put into administration and has failed to keep up with repayments. The original loan amount was £75,000 and all 665 investors have been notified.

Enjoy lending, The Funding Circle Team

– See more at: https://www.fundingcircle.com/about-us/our-blog/weekly-lending-review-week-30#sthash.jTAv3gjw.dpuf

Video: Meet the businesses you lend to: Bramley & Gage


Bramley & Gage was started 25 years ago by husband and wife, Edward and Penny Kain. Their son, Michael, has since taken over the family business which manufactures award-winning fruit liqueurs and gin in Thornbury, Gloucestershire.

Their fruit liqueurs which include strawberry, elderflower and plum, have won numerous prestigious drink awards and their 6 o’Clock Gin is now stocked in Waitrose stores nationwide.

In May, they took out a peer-to-peer loan through Funding Circle for £25k to buy a new gin still to help them increase their production. This was funded by 248 people in 7 days. In this video we explore how the business started and became what Bramley and Gage is today. Edward and Michael also share their experience of Funding Circle as a small business borrower.

Funding Circle on Channel 4 News


 

Last night, Channel 4 News ran a feature about the growth of new types of finance for businesses. We featured in the piece with Samir Desai, our CEO, talking about the business benefits of using peer-to-peer lending. Also included was one of our borrowers, Moo Free. They are the only dairy-free chocolate manufacturer in the UK.
After struggling with the banks for 4 months, Moo Free came to Funding Circle and were able to take out a loan in April 2013. They achieved their £60k loan in less than a week which was funded by 366 people and the British Government. They have used the money to purchase equipment to facilitate their rapid growth which is exactly what the British economy needs.

We are delighted to see one of our fantastic borrowers on national news; and we hope that this broadcast will help raise awareness of peer-to-peer lending across the UK.

blog_banner_forum.jpg

The top 10 British innovations in 2012: Part 3

hailotaxi.png

Part 3: Hailo App

In the third instalment of our British innovation blog series we’ll be looking into the success of Hailo, the app that allows you to hail a cab from your mobile phone.

Having started off in a café in London in late 2011, it has experienced phenomenal success and now operates in 11 major cities worldwide. Hailo’s business model draws similarities to Funding Circle as it cuts out the middleman; by allowing passengers to connect with the taxi driver directly, rather than going through an operator.

What is Hailo?

Hailo provides a service to both cab drivers and customers. To get going with it, you can download the app onto your smartphone from your respective app store which will allow you to pick up a booking if you’re a cab driver or help you to book a taxi if you’re a passenger. Instead of braving the elements and searching the streets for a yellow light, the GPS on users’ phones pinpoint where both parties are; providing an estimate of when the taxi will collect their ride. As a passenger, you also have the option to pay by credit card for your journey, which is great for when you don’t have any cash.

Why has it been so successful?

Recognising that there were huge inefficiencies in the taxi market, three London cabbies teamed up with three technology entrepreneurs and together, their wealth of knowledge allowed them to create an easy-to-use app for the urban population. With figures suggesting that cabs can have between 30-60% downtime, there was a gap in the market to provide something that would ease the uncertainty of driving around and searching for a fare. The Hailo team also saw inefficiencies for the customer. Cash is being used less as people use electronic payments and credit cards more, and once you create a Hailo account you can pay electronically, add a tip and leave feedback for your driver.

Success despite the competition

At the time of launching Hailo, there were other taxi apps available to download, however their success can be attributed to building a happy community of drivers first, before it was offered to the public. They offered services to drivers, such as daily logs to improve efficiency and traffic sharing information which meant that as soon as Londoners started using Hailo, their service was already established enough to take off.

Their key London competitor is Get Taxi, which has 1,500 black-cab drivers registered, and apps for mini cab providers, such as Addison Lee or comparison taxi apps like Kabbee.

What’s next?

Currently Hailo operates in London and four other cities worldwide, and there are plans to expand to New York and another 5 cities this year with the $30 million they received in series B funding.

Challenges

Although the app is free to download for drivers and passengers, the costs involved for a successful trip may act as a deterrent for users in the future. Drivers hand over 10% of their fare to Hailo, and they have recently introduced a minimum £10 fare for the passenger on a Friday and Saturday night; which has to be paid by card.

Hailo is an excellent example of British innovative thinking that can produce great success locally and internationally by solving everyday problems.

Labour recommends income tax deductibility for peer-to-peer lending

Funding Circle investors have long been asking us what we have been doing to encourage tax incentives for lenders. For a long time now we have been campaigning for income tax relief on loans and actually for extensions to schemes like EIS to allow lenders to pay NO TAX on lending they do at Funding Circle given the economic benefit created.

On Monday we attended the launch of the Labour small business taskforce report, and now that the report has been issued we are pleased to announce that the Labour party are now recommending that losses incurred in peer-to-peer lending can be off-set against income tax rather than capital gains tax. The full report can be seen here (we have a nice mention on page 26!). This is the first time a major political party has recommended a favourable tax change for peer-to-peer lending. Here’s the relevant extract:

8. Government should give active support and encouragement to emerging alternative finance marketplaces and their participants. This means understanding the particular business models adopted by new providers and the challenges they encounter. For example, the growth of marketplace lenders is being constrained because they must pay interest income tax calculated before lending losses. This makes it unprofitable to lend to riskier businesses. The government should permit marketplace lenders to calculate income tax obligations based on interest net of bad debts, rather than pre-bad-debts.

We can now use this to campaign with the existing Government to adopt these measures. I don’t want investors to get their hopes up, but often when one political party recommends something like this it can be quickly taken up by the current Government if there is enough momentum. This is a good step in the direction of eventually getting complete tax relief for people who lend via peer-to-peer lending.

I know it may seem like these things are very slow, but behind the scenes we are working hard to improve the regulatory and tax environment for our lenders.

Samir, CEO

– See more at: https://www.fundingcircle.com/about-us/our-blog/labour-recommends-income-tax-deductibility-for-peer-to-peer-lending#sthash.IfjGnits.dpuf