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

 

Funding Circle celebrates its 4th birthday!

Today, we are celebrating our fourth birthday, and what an incredible journey the last few years have been. We want to say thank you to all of the investors and borrowers who have made the last four years possible.

To date, you have lent over £330 million to over 5,500 small businesses across the country, creating an estimated 16,500 jobs. To celebrate, we’re publishing an infographic which tracks the rise of peer-to-peer business lending right up to this year, when the industry became formally regulated.

If you’re a small business owner looking for finance, then why not put an application in now? Apply here.

Infographic FINAL resized for blog

News

Meet David, who 1,277 of you helped last year. Weekly Lending Review

Week 32: 4 – 10 August 2014

It was another good week for listings as nearly 100 new businesses came to the marketplace, with the A+, A and B risk bands sharing a similar volume of loans.

A £400,000 loan for a property developer is closing in the next few days. It will be used to convert flats in a central London location into one family-sized home, and is A+ rated at a fixed rate of 8%. It is first bid, first served, so place your bids before it’s too late!

New loans

There were 96 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £6,135,460; that’s an average of £63,911 per loan. The largest loan value was £581,000 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: 4-Aug represents the week of 4th – 10th 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

Digging into the data: Collections and recoveries

We’re starting a series which will look at the data behind Funding Circle and the first post examines the decline in late payments by businesses and the increase in the amount of money recovered for investors when they experience a bad debt.

Meet David, a business owner you’ve helped

We visited David Potter, director of Ambic, who borrowed £100,000 from 1,277 investors last year. He set up his furniture business over 30 years ago and it is still going strong. You can find out what they did with their loan in this short video.

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 3 weeks to go to recommend a friend to Funding Circle, so make sure you don’t miss out.

Loans defaulted last week

Electrical contractor. Loan ID 5864

This Southampton business has been trading since 2007 and has experienced a change in circumstances. The original loan amount was £75,000 and all affected investors have been notified.

Furniture retailer. Loan ID 4705

This Chesterfield business has been trading since 2008 and is in arrears with repayments. The original loan amount was £20,000 and all affected investors have been notified.

Poultry business. Loan ID 1963

This equipment supplier has been trading since 2009 and is in liquidation. The original loan amount was £26,500 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

One year on: did you lend to this manufacturer?

Last month we visited David Potter, Director of Ambic, who is based in County Durham and borrowed £100,000 in July 2013.

Ambic is a long-established UK manufacturer and their primary focus is making and fitting educational furniture. They supply schools, universities and offices in the North East of England and pride themselves on the quality of their furniture; and the experience their staff bring to the field.

In this short video you’ll meet David, who set the business up 30 years ago. You can find out more about his manufacturing business and how his Funding Circle loan helped him with working capital over the busy summer months.

Ambic borrowed £100,000 from 1,277 investors through Funding Circle in July 2013.

If, like David, you’re interested in taking out a working capital loan for your business, you can get started on the application here.

Peer-to-peer lending set to hit £1 billion mark. July industry news

Newspapers - Copy

Peer-to-peer lending set to hit £1bn mark

Data released by industry body, the Peer-to-Peer Finance Association, shows that UK peer-to-peer lending platforms handled new loans of over £500 million in the first half of the year. In the first six months of 2014, new peer-to-peer lending to businesses surpassed £275 million, with new consumer lending at £243 million. Lending is forecast by the Association to exceed £1 billion by the end of the year.

How does peer-to-peer lending and crowdfunding work?

Following the latest round of figures from the Bank of England which show bank lending is still down, despite a better economic outlook, the BBC 6 o’clock news took at look at all the various forms of alternative finance, including crowdfunding and peer-to-peer lending. One of our borrowers, Moo Free who manufacture dairy free chocolate, featured in the piece.

Robert Steel joins Funding Circle board

We announced our series D funding round for $65 million, which means we have now raised $123 million in total to grow the business. This latest round 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. Coverage was also seen in the Times, Daily Telegraph and Reuters, and you can read more on our blog.

Would you invest in your favourite restaurant? Investors plough more than £1m into Burrito Bond that pays 8%

Mexican restaurant chain Chilango has been inundated by investors clamouring for a slice of its business after founders released a Burrito Bond via crowdfunding site Crowdcube. The 8 per cent four-year mini-bond has proved so popular that the two-man team has already beaten their original target of £1 million by £361,600.

Alternative finance to aid commuters

A new UK start-up, CommuterClub and consumer peer-to-peer lender, Ratesetter, have come together to bring the benefits of an annual season ticket to everyone travelling within the area covered by Transport for London’s Oyster smart card. In time, the company aims to operate in other UK cities with travel smart cards too.

The pros and cons of P2P lending

BBC Moneybox focused on peer-to-peer lending in a recent episode. Our co-founder Andrew Mullinger discussed the risks involved from an investor perspective and the importance of diversification. All Funding Circle investors who have lent to at least 100 investors with a maximum exposure to any one business of 1% are earning a positive return and 60% are earning 6% and more. Read up on the importance of diversification here.

Santander gets behind FinTech with $100m fund

Santander launched a $100 million (£58.3 million) fund to back financial technology (FinTech) start-ups, as the bank’s chief executive hailed the UK as the world’s leader in financial innovation. The money will be invested across the world, but Santander chief executive Ana Botin hinted that much of the money could end up in the UK, saying: “There is no doubt the UK is leading the way in financial innovation, not just in Europe, but globally.”

News

Digging into the data – Collections & Recoveries

At Funding Circle we are committed to being a transparent business and we want to share more of our information with you around lending and borrowing activity.

As part of this commitment we are launching a series of monthly blog posts looking at the data behind Funding Circle. The series launches today and this first post examines the decline in late payments by businesses and the increase in the amount of money recovered for investors when they experience a bad debt.

Understanding why bad debts occur

Lending to businesses can deliver attractive returns to investors while helping established British businesses to access the finance they need to grow.

However from time-to-time some businesses will be unable to fully repay their loans. This is often due to an unexpected change in their circumstances; sometimes businesses are themselves the recipient of a late payment from one of their customers, causing cash flow problems. At other times another financial provider, like a bank, may withdraw their support suddenly. Often these are only temporary setbacks for a business, but in some cases it can have a more significant impact, leading to a business failing to repay their loan on time.

When businesses are late repaying their loan at Funding Circle our in-house collections and recoveries team work closely with the business affected to deliver the best possible results for everyone. One of our core principles of collections and recovery is ‘survival for revival’. A business that ceases to trade or is declared bankrupt without any recovery for investors is never a positive outcome.

Since we brought all of our collections and recoveries processes in-house in February 2014, we have seen significant improvements in the recovery rate for investors and a reduction in the number of businesses being late with a monthly payment. What this means to investors is that more businesses are paying back on time and when an instance does occur where a business ceases to trade, we are recovering more money for investors.

Let’s take a look at some of the key numbers:

Bringing down late payments

Firstly the number of businesses that are late with their monthly repayments has dropped since February from ~1.5% to less than 1%. The lowest this has reached is 0.80% was on 31 July 2014.

Decline in % of late payments since launch of FC in-house collections and recoveries teamDecrease in late rate - August 2014

Bringing down the rate of late payments was not achieved by simply defaulting more loans. This short term gain may look good initially, but the overall recovery rate would go down with each new default.

Instead, the decline in late payments is a result of building industry leading policies for managing businesses in distress. These policies involve working closely with borrowers as soon as they experience trouble – which helps to reduce the frequency of late payments, and puts us in a better position should the business ultimately cease to trade.

Raising recoveries for investors

As a result of this work, we expect recoveries across all loans defaulted up to 30 June 2014, to recover a minimum of 34p in the pound. Based on more recent loans (between 1 January 2014 – 30 June 2014) we anticipate the recovery rate to be 40p in the pound.

To give some context to these numbers, independent research indicates that traditional lenders would expect to receive between 28p-42p recovery on a secured business loan once a business enters administration, and 1p-3p. on unsecured business loans (without a personal guarantee).

Increase in recovery rate - August 2014

What is particularly encouraging about these figures is that we believe these estimates could potentially be higher. For example we have not included estimated recoveries on bankruptcies, and any loans currently in dispute before the courts or otherwise in negotiation for a payment plan.

What this means for investors

We are committed at Funding Circle to having the best collections and recoveries process in the industry – ensuring investors feel confident in lending to businesses. We know there is still lots more to do and we are constantly looking to recover as much money as possible, and further improve our communications.

We hope you found this post useful. We’ll be talking about this in more detail on our forum – please join us there. Our next data post will appear in September.

The Funding Circle team

A record-breaking month for lending. Weekly Lending Review

Week 31: 28 July – 3 August 2014

Last month, Funding Circle investors lent a massive £21.9 million to 362 businesses across the UK, outdoing the previous record by over £1.5 million. Thank you to all who helped these businesses, we’ll have more case studies on the way soon!

Currently there are 3 property development loans on the marketplace, including one in central London, one in Ealing, and one in Barrowby.

New loans

There were 98 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £6,884,340; that’s an average of £70,248 per loan. The largest loan value was £450,000 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: 28-Jul represents the week of 28th July – 3rd August.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value1

News you should know

Loan book

The loan book is now available to download from our statistics page. Included are details such as the risk band and sector of the business, and whether the loan was initially offered as a whole loan (WL) or went to auction on the marketplace as a partial loan. We’re committed to providing you with as much data as possible which is why we’ll be adding financial information, accurate to the nearest £10, to the loan book in the next version.

Summer special: 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 4 weeks to go to recommend a friend to Funding Circle, so make sure you don’t miss out.

Loans defaulted last week

Coach operator. Loan ID 5309

This coach business has been trading since 1928 and is now in administration. The original loan amount was £100,000 and all affected investors have been notified.

Ready meals producer. Loan ID 1348

This Birmingham business has been trading since 1998 and is in arrears with repayments. The original loan amount was £50,000 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.

 

Over £1m of loans with 2% cashback. Weekly Lending Review

Week 29: 14 – 27 July 2014

Last week we saw over 90 new lending opportunities come to the marketplace, including an A+ property loan for a development in Plymouth. It is nearly 90% funded with 3 days to go and has a fixed rate of 7.5%. A £400,000 fixed rate loan for a central London property development is also nearly funded. Both loans have 2% cashback* available for every successful bid, so get bidding before it’s too late!

New loans

There were 94 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £5,036,120; that’s an average of £53,576 per loan. The largest loan value was £400,000 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 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: 21-Jul represents the week of 21st – 27th 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.

Marketing tips from a Funding Circle borrower

We’re starting a new Marketing Tips series in partnership with Cognition Agency, which we hope will help businesses grow and provide investors with interesting material they can read and share. The first in the series is 5 trade secrets to improve email marketing.

Loans defaulted last week

Electrical business. Loan ID 1945

This Hertfordshire business has been trading since 1987 and is now in administration. The original loan amount was £100,000 and all affected investors have been notified.

Scaffolding business. Loan ID 3964

This Walsall business has been trading since 2008 and is in arrears with their repayments. The original loan amount was £50,000 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.

 

5 Trade Secrets That Will Improve Your Email Marketing

Email marketing is one of the most powerful ways small businesses can build relationships and grow. 76% of marketers use email more today than they did three years ago (HubSpot). This is hardly surprising, given the fact that email provides the most direct line of communication for conversion to sales. What’s more, it’s incredibly cost effective, with an ROI of around 4,300%, according to the Direct Marketing Association.

So, what’s the secret to getting your messages opened, read and shared with others?

Here are 5 trade tips to help you out:

1. Segment your database

The last thing people want is to have their time wasted by information they’re not interested in. It’s worth taking the time to segment your database and send relevant, targeted information to groups of people.

2. Carefully consider your subject line

The most common mistake people make is to spend lots of time on the email itself and then throw together a last-minute subject line. However, if no one opens your email it doesn’t matter what it says inside. Entice your recipient in the same way you would with an advertising headline.

3. Reward your readers

Once people have opened your email give them a reason to engage with you. How do you do this? By giving them something in return, such as a useful tip or link to a relevant guide or ebook.

4. Communicate the benefits

Don’t fall into the trap of headlining your product features. Instead, focus on the benefits that can be gained by working with you – always tell the recipient what’s in it for them.

5. Time your messages

Getting the timing right is crucial to your success. Saturday has the highest click-through rate at over 9%; 6am attracts the highest click-through rate of any hour, and most unsubscriptions take place on Tuesdays. The trends may be different for your industry, so experiment to find out what gives you the best results.

Effective email marketing is just one aspect of digital marketing. Once your prospects have clicked through to your website you need to provide them with the right information, in the rightway in order to convert them.

 

By Tim Witcherley, Cognition Agency

You can get more tips on digital marketing by downloading Cognition’s free eguide, Making The Most Of Online Channels To Generate Leads

Cognition is a full-service marketing agency and a Funding Circle borrower. It’s known for its commercial approach, linking marketing activity to revenue and growth.

If you’re interested in taking out a Funding Circle business loan to improve your email marketing, you can apply online at anytime.

Time to take a peer-to-peer loan?

The news today that small businesses are still struggling to access finance via traditional means, despite the more positive economic outlook, should comes as no real surprise for anyone who has been following business lending figures over the last few years. There has only really been one trend when it comes to high bank lending figures, and that has unfortunately been downwards.

The figures released by the British Bankers Association today show that borrowing by non-financial companies from high street banks declined in the year to June by £12.7 billion. Whilst it’s heartening to see that there was a small percentage increase in lending to small businesses in the wholesale and retail, accommodation and food, and real estate sectors, the percentage change remained below zero. Where we had previously seen some improvement in the manufacturing industry, with this being the only sector benefiting from positive increases in lending since October last year, this fell in June from ~10% to ~4%.

BBA lending stats June 2014

In comparison, business can typically access finance directly from investors via marketplaces like Funding Circle within two weeks. The application process is entirely online and can take as little as twenty minutes, and the credit assessment team will typically have a decision for you within 48 hours. On average it can take up to 15 – 20 weeks to hear from a bank – by which time the season may have passed, or the stock you needed to buy is no longer necessary as you weren’t able to take an important contract.

Today we’re publishing an infographic which shows just how fast a peer-to-peer loan can be for small businesses looking to grow and expand. If you have any questions, then just get in touch. Otherwise please feel free to share to help raise awareness of the choice that business owners now have when they are looking for finance.

If you’re a small business owner looking for finance, then why not put an application in now? Apply here.

Infographic final

Loans of £600k and your latest business video. Weekly Lending Review

Week 29: 7 – 13 July 2014

Last week was one of the best weeks for listings, as over £6.7 million of loans were available for you to lend to. We also announced that we have raised further funding to help improve your Funding Circle experience.

There are 2 loans on the marketplace with a value of £600,000 and above: both have a fixed rate of 7.5%, both are A+ risk bands and both have 2% cashback* on them. Place your bids quickly to take advantage of these loans!

New loans

There were 109 new business loans listed last week and there are currently 66 auctions on the marketplace.

The total value of the new listed loans was £6,770,600; that’s an average of £62,116 per loan. The largest loan value was £620,000 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: 14-Jul represents the week of 14th – 20th July.

Weekly average gross yield (2 weeks rolling)

yield2

Number of listed loans per week

number

Listed loan value per week

value

We’ve raised $65m to help improve your Funding Circle experience

We’re delighted to announce that we have raised $65 million in equity funding, to improve our offering for both borrowers and investors. We’re also pleased to announce that Bob Steel, who is currently CEO of Perella Weinberg Partners, will join our board as a non-executive director.

Did you lend to fashionable polo retailer, Pampeano?

Earlier this year, Pampeano, a retailer of own-label polo equipment and handmade leather belts, took out a business loan from 415 people to help fund their growth. You can watch their story on our blog.

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.

Loans defaulted last week

Taxi company. Loan ID 1287

This Loughborough business has been trading since 2002 and has fallen into arrears. The original loan amount was £30,000 and all affected investors have been notified.

Animation business. Loan ID 3781

This Caernafon business has been trading since 1992 and has ceased trading. The original loan amount was £15,000 and all affected investors have been notified.

Welding business. Loan ID 2889

This Worcester business has been trading since 2010 and is in arrears with their repayments. The original loan amount was £20,500 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.

 

Did you help this polo business access funding?

From Argentina to John Lewis: Pampeano’s Argentine leather belts hit the high street

Earlier this year we met Jenny Brown, founder of polo retailer Pampeano, who borrowed £30,000 from 415 people through Funding Circle.

Pampeano, located in Dorton, near Aylesbury, supplies the majority of UK polo retailers with own label polo equipment. They also design fashionable handmade polo belts, made from Argentine leather.

Having set up Pampeano in 2008, Jenny has successfully grown her business over the years and has recently secured a contract with major UK department store, John Lewis. Pampeano belts are now on sale at some of their stores and online.

Their business loan has helped them buy the stock needed to fulfil this contract, and will fuel their growth even further.

In this short video, Jenny shares her business story and what she liked about her Funding Circle experience. She is determined to grow the brand over the coming years so watch out, you may hear more about Pampeano soon!

 

If you want to lend to businesses like Jenny’s, or you run a business and need funding, you can sign up here.

There are many more businesses who have accessed finance through Funding Circle, and you can view their stories here.

 

Funding Circle raises $65m in equity funding and announces Bob Steel as new board director

Today we’re delighted to announce that we have completed a $65 million series D investment, led by Index Ventures, along with existing investors, Accel Partners, Union Square Ventures and Ribbit Capital. 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 announce that Bob Steel will join our board as a non-executive director. Bob is currently CEO of Perella Weinberg Partners and his expertise and experience is unparalleled. As former Under Secretary for Domestic Finance of the United States Treasury, former CEO of Wachovia, vice chairman of Goldman Sachs and Deputy Mayor of New York, we are very excited to be welcoming Bob to the team.

You can read the full press release for today’s news in our media centre. This news follows the last round we raised in October last year, which allowed us to expand into the US and helped us to tailor our loans for small businesses who develop or invest in property. Since launching in the US at the end of 2013, the Funding Circle US team has increased its lending to American businesses by 500 percent and is expected to lend $100 million by the end of 2014.

Globally, investors have now lent more than half a billion dollars of lending to over 5,000 businesses and we believe this is just the beginning. Thank you to all investors for your support over the last few years – you are helping to build a better financial world.

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

The Funding Circle team

 

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.

 

Make the most out of your loan and use our free advisory service

At Funding Circle our passion is to help small businesses succeed and prosper, and help investors earn attractive returns. Over 5,000 businesses have now accessed finance via the marketplace, but often this access to capital is just the beginning.

Biz advisory

After speaking with many of you over the last four years, we know that most businesses regularly review their management information. However time pressure can make other things such as the business strategy, competitive edge, value creation, revenue streams, marketing, financial health, staff morale and management competency, easy to overlook.  

The good news is these things can be easily reviewed and improved if you know which questions to ask and some easy steps to take.

That’s why we are trialling a new and free business advisory service, for small businesses who feel they would benefit from independent professional business advice. These 60-90 minute sessions will take place with a Funding Circle account manager and an independent business advisor from a professional transformation organisation. In a recent Funding Circle survey, 92% of business owners said they would be interested in this service.

Who are the advisors?

We have a panel of four advisors to choose from including Baker Tilly, BDO, FRP Advisory, and ReSolve Partners. If you feel your business could benefit from this service, then the first step would be to get in contact with us, so we can discuss your position and agree which advisor would best suit you.

What information would you need to provide?

The more information you are able to provide in advance of the consultation, the better.

The minimum information is the completion of a SWOT analysis, which is a structured planning framework that identifies the business’ Strengths, Weaknesses, Opportunities and Threats. This should take about 15 minutes to fill out.

Ideally you could share the most up to date cash-flow forecast and management accounts. We can send you a generic 13 week short-term cash flow model that will help you prepare one for your business. Other information that would be useful, is a business plan, debtor ledger and a creditor ledger as these can be helpful in identifying and prioritising payment and debtor collections to improve cash flow.

Is there any obligation on me to have a meeting?

No obligation whatsoever.  However, this opportunity will enable us to develop a closer relationship with you and gain a better understanding of your funding needs, which may be useful in the future.

Why are we offering this service?

We want to see borrowers become successful and make the most out of their loan. We believe that this free service can help borrowers be better at business; and help you avoid, or plan for, any difficulties that may lie ahead. Meeting you in person and seeing your business will also help us gain a better understanding of your business needs.

Things to note

It’s worth mentioning that any information provided to us is treated with the strictest confidence and shall not be disclosed to any third parties without your express consent. The service will initially be trialled with businesses who have £50k outstanding on their loan and are ideally based in London and the South East, but we hope to roll it out more widely in due course.

How to get started

Contact us by emailing Vijay Chadha, who is running this trial service, or by calling 0203 667 2225.

Assessing more businesses on a case by case basis

Last month we revisited how we assess the types of security required for business loans, and removed the £150k threshold for loans without asset security. As mentioned, this will give our credit team more flexibility to assess the security required 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 will also start to review loan applications where the business has a turnover between £50k and £100k.

Previously we have considered loans for businesses who have around £100k turnover. However, as the marketplace grows, we are seeing an increasing number of businesses with a lower turnover and a high profit margin, that would pass our affordability check and our credit assessment.

These kinds of businesses are typically service companies, such as accountants or consultants, who have previously not been able to borrow through Funding Circle due to their lower turnover figure.

It’s important to note that we will always assess a business’s ability to repay a loan, and only list those that pass our credit assessment. Having the flexibility to consider businesses with a lower turnover will allow us to look at companies who have performed consistently well.

An example

Company A has been trading for 6 years, consistently turning over £60k with a profit of £25k.

Company B has 2 years filed accounts. The first shows a turnover of £6k with a loss of £100k, and the second year shows a turnover of £51k and a profit of £2k.

Company A is much more likely to be approved than Company B.

If you have any questions about this, please visit our FAQs or join us on our forum where we will be happy to discuss this in more detail.

Summer promotion: share £100 cashback! Weekly Lending Review

Week 27: 30 June – 6 July 2014

Summer is here and to celebrate, we’re running a special recommend a friend promotion. If you recommend a friend to Funding Circle during July and August and they lend at least £1,000 to businesses, you could share £100 cashback* with them. Start recommending today!

There are currently 50 lending opportunities available to you, including a property investment loan for £520,000 that’s currently on the marketplace with 2% cashback available on every successful bid.

New loans

There were 77 new business loans listed last week and there are currently 60 auctions on the marketplace.

The total value of the new listed loans was £4,266,320; that’s an average of £55,407 per loan. The largest loan value was £220,000 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: 30-Jun represents the week of 30th June – 6th July.

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

Last month’s top industry news

In this month’s news roundup, we announced our partnership with Santander, the largest global peer-to-peer lender, and a consultation into the peer-to-peer ISA.

Keep lending using our iOS App

We’ve just updated our iOS app to allow you to transfer funds into your Funding Circle account, so you’ll never miss out on an auction again. If you haven’t got the app yet you can download it here. Happy bidding!

Loans defaulted last week

No loans were defaulted.

Enjoy lending, The Funding Circle Team

 

Tie-up with Santander and Lending Club IPO. June industry news

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Santander in peer-to-peer pact as alternative finance makes gains

In a sign that marketplace lending continues to march further into the mainstream, we launched a new partnership with Santander last month. The referral arrangement will see Santander proactively refer small business customers looking for a loan to Funding Circle, where we are better placed to help. The exciting new partnership is the first between a UK bank and an online finance provider, and will give thousands of small British businesses greater access to finance, whilst bringing more lending opportunities to the marketplace. More information can be found on our blog, the Evening Standard and Reuters.

Lending Club IPO seeks $5bn valuation

The world’s biggest peer-to-peer consumer lender, Lending Club, is preparing to raise more than $500m from a US initial public offering in what would be a landmark moment in the rapid growth of the industry. The San Francisco-based company has chosen Morgan Stanley and Goldman Sachs to lead the offering, which could come as early as the third quarter of the year, with proceeds from a stock market listing intended to help fund its growth.

Treasury set to launch peer-to-peer ISA consultation next month

The inclusion of peer-to-peer lending within ISAs continued to pique interest in June. The Treasury is poised to launch a consultation next month on how investors might gain access to the peer-to-peer lending market through individual savings accounts – and whether a new type of ISA should be created for the purpose. Funding Circle is part of the steering group working with government to finalise the exact mechanism and timings. We’re expecting the process to take a further six to eight months.

First p2p scheme through a Sipp

Personal pension owners can now invest in peer-to-peer lending through a partnership struck between a peer-to-peer lending platform, a pension provider and financial portal SippClub. The new venture enables self-invested personal pensions (Sipps) to include peer-to-peer lending within the tax-efficient wrapper. This is something we are working hard to allow investors to do. The Daily Telegraph also discusses the improvements that could be made to the way returns are paid out, in order to make peer-to-peer lending an attractive source of income for pensioners who wish to avoid annuities.

First peer-to-peer firm fails – but savers are repaid

Following the introduction of regulation on 1 April, a peer-to-peer lender Yes-secure, has shut down, but has promised a full refund of outstanding loans to all investors. The Financial Conduct Authority requires all peer-to-peer lenders to meet strict capital requirements and show detailed plans of how the contracts would be enforced should a company go bust. All companies belonging to the Peer-to-Peer Finance Association have had these requirements in place for a number of years in the run up to formal regulation.

Ambic furniture company looks to expand beyond Newcastle

One of our borrowers, Ambic, featured in the Times, in an article about overcoming the issue of cash flow. The educational furniture manufacturing company had relied on a bank overdraft over the busy summer months, until the recession kicked in. The director, David Potter, took the decision to try Funding Circle and within two weeks, he received his £100,00 loan funded by 1,277 of you

And finally, whilst it’s not technically industry news, we couldn’t help but include this article in the Evening Standard ahead of Ping Pong Fight Club last month. Following last year’s victory, we descended on Shoreditch to retain our ping pong title against the rest of London’s tech scene.

Jenny shares her top business tips

Last month we met Jenny, founder of Pampeano, who borrowed £30,000 from 415 people through Funding Circle earlier in the year. Pampeano is a retailer of own label polo equipment, including their handmade polo belts made from Argentine leather.

Having set up Pampeano in 2008, Jenny has grown her business to a stage where she has now secured a contract with major department store, John Lewis. Their business loan helped them buy the stock they needed to fulfil this contract, and will fuel their growth even further.

We caught up with Jenny and asked her to share some of her top business tips.

1. Manage your cashflow

Managing your cashflow is key to maintaining your reputation with customers. Ensure you have the capital to fund your inventory, so you’ll always be able to supply your goods.

2. Keep at it

There will be moments when you doubt yourself, but keeping working hard.

3. Be innovative

As a small business, you’ll need to manage your budget carefully. Try to be innovative and find different ways of marketing and staffing your business.

Record day for new loans. Weekly Lending Review

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Week 26: 23 – 29 June 2014

Last Thursday we listed over £2.2 million of new lending opportunities, beating our previous daily record by over £300,000. As a result of all of your lending, we were also thrilled to pass the £300 million lent milestone last week.

There are currently 2 loan requests on the marketplace which have 2% cashback* on them and are still available to bid on. One is a property investment loan for £520,000 and one is a second tranche loan for a property development.

New loans

There were 88 new business loans listed last week and there are currently 60 auctions on the marketplace.

The total value of the new listed loans was £5,270,180; that’s an average of £64,270 per loan. The largest business loan value was £520,000 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: 23-Jun represents the week of 23rd – 29th June.

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

£300 million lent

In just under 4 years, investors have reached a major milestone having lent more than £300 million to over 5,000 businesses; with £100 million of this lent in the last 6 months alone.

Recommend a friend and share £80

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

Community Discussions

This week we’re talking about our investor evening video. You can join the discussion and watch the video on our community forum.

Loans defaulted last week

Software solutions company. Loan IDs 494, 1324, 3058

This Staffordshire business has been trading since 2001 and has entered into insolvent voluntary liquidation. All 804 investors have been notified.

Consultancy firm. Loan ID 1630

This London business has been trading since 1991 and has entered into administration. The original loan amount was £65,000 and 711 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