Marketplace lending in the UK breaks new record | Weekly Lending Review

Week 32: 3 – 7 August 2015

A record-breaking £500 million was lent to consumers and businesses through marketplaces like Funding Circle, from April to June 2015 for the first time in history. Here’s our round-up of last month’s industry news.

News you should know

We’re making some improvements to the marketplace; specifically how Autobid funds new loans. Until now, Autobid could fund up to half of each available loan at the minimum bid rate. As more money is being lent through Autobid than ever before, we’re increasing this so 65% of new loans can be funded by Autobid at the minimum rate. Should this change again in the future, we’ll let you know in the Weekly Lending Review. This update should not affect your lending experience, but if you have any questions about this please get in touch or visit our forum.

New loans available to you

There are currently 50 loan requests on the marketplace which are all available for you to lend to.

The total value of new loans listed on the Funding Circle marketplace was £13,119,840, averaging at £73,331 per loan. The largest loan value was £400,000 and the smallest loan value was £5,000.

Business loans still available for bidding on:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The dates on the graph should be read as ‘week beginning’, for example: 3-Aug represents the week of 3rd – 7th August 2015.

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. You can view the latest gross interest rates accepted on the marketplace on our statistics page.

Weekly average gross yield (2 weeks rolling)

WLR 32 yield

Number of loans, value of loans and amount lent are reported weekly.

Number of listed loans per week

WLR 32 loans listed

Listed loan value per week

WLR 32 value

Total amount lent

WLR 32 amount lent

Loan parts available to buy from other investors

WLR 32 loan parts

Loans defaulted last week

Retail business. Loan 8268. Risk band C

This Manchester business was established in 2011 and has entered liquidation.

Courier company. Loan 5423. Risk band D

This Cheshire business was incorporated in 2007 and has been placed in administration.

Indian restaurant. Loan 1751. Risk band B

This Birmingham business has been running since 1998 and is 2 months in arrears.

Ecological consultants. Loan 3751. Risk band D

This Wiltshire business was established in 2010 and has entered liquidation.

All affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans. Read how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

A third type of ISA. July industry news

Newspapers - Copy

P2P Isa investments confirmed for next year

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

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

 

UK peer-to-peer finance breaks new record

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

 

Funding Circle Hires Barclays, AmEx Executives to Oversee Risk

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

 

Software firm Sage brings funding options to its small business customers

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

 

Apple becoming a bank? Don’t count on it

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

News

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

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

1. Who can apply for a business loan?

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

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

2. Types of business loans we offer

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

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

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

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

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

Birchmead Homes Property Finance School Development

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

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

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

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

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

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

4. How long does the process take?

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

5. What interest rate will your business pay back?

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

6. What fees do we charge?

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

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

Fees

7. How are the repayments structured?

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

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

8. Who’s lending to me?

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

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

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

9. Can I apply for a second loan?

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

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

Have a question?

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

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

News

A record-breaking £47.5 million lent to businesses in July! | Weekly Lending Review

Week 31: 27 – 31 July 2015

A record-breaking £47.5 million was lent to businesses across the UK through the Funding Circle marketplace in July, thanks to your lending.

There are a wide variety of opportunities on the marketplace for you to lend to, including a property developer building 4 new homes in Wigan and a fundraising business looking to expand. Remember, by lending to businesses your capital is at risk.

New loans available to you

There are currently 46 loan requests on the marketplace which are all available for you to lend to.

If you are lending to less than 100 businesses (and are not part of the 100 club) you may be missing out on a more stable return. We’ve created a short video which runs through the basics of diversification, which simply means lending small amounts of money to lots of different businesses, and how you can diversify at Funding Circle.

The total value of new loans listed on the Funding Circle marketplace was £11,440,520, averaging at £84,304 per loan. The largest loan value was £515,480 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 27-July represents the week of 27th – 31st July 2015.

Weekly average gross yield (2 weeks rolling)

WLR 31 Yield

Number of listed loans per week

WLR 31 Loans Listed

Listed loan value per week

WLR 31 Loan Value

Total amount lent

WLR 31 Amount Lent

Loan parts available to buy from other investors

WLR 31 Loan parts

News you should know

We’re making some small changes to our investor terms and conditions this week, mainly to clarify how the marketplace works and to comply with regulation. More information about the specific changes can be found on our blog.

If you have any questions please contact our customer service team who will be happy to help.

Loans defaulted last week

IT recruiter. Loan 4315. Risk band D

This Hertfordshire business was established in 2007 and is 5 months in arrears.

Video game retailer. Loan 8570. Risk band B

This Angus business was incorporated in 2012 and has ceased trading.

All affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans. Read how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

 

Small updates to our terms & conditions

We’re making some small changes to our investor T&Cs this week, mainly to clarify how the marketplace works and to comply with regulation. Please see below for details:

Investor terms & conditions

  • Changes to clauses 1.10 to 1.14 to clarify that money must be paid in from, and withdrawn to, a bank account in the name of the Funding Circle account holder.
  • A change to clause 5.1 to clarify that we can make changes to loan conditions in respect of future loans, as long as we notify investors of such changes and they do not adversely affect investors.
  • Changes to clauses 10 and 12 to clarify that any debt collection activity is carried out by Funding Circle Limited.
  • Amendments to clauses 13.2(a) and (e) to make clear that we can, in the interests of all investors, terminate membership of Funding Circle if our marketplace is not being used for the purposes for which it is intended.
  • Some small changes to clause 25 (clauses 25.3 and 25.4) to clarify how we hold client money and how statements are provided.

If you have any questions about these updates please get in touch and we’ll be more than happy to help.

Enjoy lending,

The Funding Circle team

 

Laird London: Hats off to business owners Alex and Zofia

Laird Hatters opens new shop in Covent Garden

Last month we were in Covent Garden visiting the latest Laird Hatters shop and we met owners Alex and Zofia Torun-Shaw. The husband and wife team sell traditional English caps and hats but with an approachable, modern twist. Alex, who studied at London College of Fashion, says “you can have a nice coat, nice shoes… but a great hat really distinguishes you. As my dad always says, ‘Get ahead, get a hat’.”

Laird Hatters London Shop

Set up in 2008, in the midst of the recession, Alex and Zofia wanted to offer an antidote to the usual homogeneous high street which they have achieved with their selection of handmade British hats. The couple now have six stores and have recently expanded their main retail premises in Covent Garden. Furthermore, Yoko Ono, Keira Knightley and Stephen Fry are said to be big fans.

Funding Circle investor Richard has been lending to hundreds of UK businesses through the marketplace for 3 years and Laird Hatters is one of them. We took Richard to meet Alex and Zofia to see how his money directly helped the business to grow. He said ‘having my money go to businesses that need money is important.’

Laird Hatters has borrowed £140,000, across two business loans, from more than 2,000 Funding Circle investors to expand their range of handmade hats and caps.

In this short video you’ll meet Alex, Zofia and Richard, hear how Laird Hatters became closely linked to the fashion industry and why they pride themselves on their shops being an experience.

Are you interested in lending to businesses?

You can support businesses like Laird Hatters and earn a great return. It takes minutes to sign up online and you can use our investor information guide to help you get started. We have thousands of loans which you can be a part of, making it quick and easy to build a diversified portfolio. Remember, by lending to businesses your capital is at risk.

Do you need a business loan?

More than 9,000 businesses in the UK have accessed  finance from the marketplace, helping them with cashflow, refurbishment and much more. You can check if your business qualifies to apply online in just 30 seconds.

Improving our loan communications to investors

Over the last few months we have been looking at how we can further improve the information we share with investors regarding defaulted loans.

As you may be aware, in March we launched a RAG (Red, Amber, Green) rating system, also known as a Traffic Light system, in the Loan Comments in your summary page. Our Collections & Recoveries team provide regular detailed updates on loans currently late or in default where there has been a material development. So far, the feedback we have received from investors has been positive with many telling us they find the RAG system very helpful.

A summary email

As part of our goal to continue to improve communications around defaults, this month we have also started including a summary of your account within your monthly newsletter.

This includes:

– Your average return after fees and bad debts up to the end of preceding month (i.e. June)

– The number of businesses you were lending to

– The number of defaults you experienced in the last month, if any

– The total exposure of your overall investment this represents

This information, together with the RAG rating system will now replace the bad debt communication emails that are sent out each time a default happens. These emails will be phased out over the next month.

Together, these changes provide a regular, comprehensive overview of your account activities. Investors will not receive any less information regarding their accounts than before, as all information regarding loans is included in your summary page. We will continue to default loans on a Thursday and investors can see most recent defaults by reviewing comments in their summary page from noon every Thursday.

Introducing a live Q&A

In addition to these changes, we also want to provide you with a more direct way to communicate with our Collections & Recoveries team. From August, Andrew Jackson, our head of Collections & Recoveries will host a live Q&A every month. He will answer any questions around specific loans you have, and provide you with a general update on the team’s statistics.

If you would like to submit a question, please contact community@fundingcircle.com. Due to data protection, all questions regarding loans must not contain the businesses name, so in your questions, please refer to any business by its loan ID.

The Funding Circle team

 

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

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

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

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

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

What does this mean for investors?

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

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

When and how do I start using my ISA allowance?

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

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

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

A fantastic benefit from our partner, Virgin Trains | Weekly Lending Review

Week 28: 6 – 10 July 2015

Earlier this year we announced our partnership with Virgin Trains, and brought members of the Funding Circle community 20% off train travel on the Virgin Trains West Coast Mainline. We’re pleased to announce the offer has been extended until 29th December 2015. You can read more about the announcement, and how to book on the blog.

New loans available to you

There are currently 75 loan requests on the marketplace which are all available for you to lend to.

The total value of new loans listed on the Funding Circle marketplace was £11,599,200, averaging at £59,002 per loan. The largest loan value was £500,000 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 6-July represents the week of 6th – 10th July 2015.

Weekly average gross yield (2 weeks rolling)

WLR 28 - yield

Number of listed loans per week

WLR 28 - listed

Listed loan value per week

WLR 28 - loan value

Total amount lent

WLR 28 - amount lent

Loan parts available to buy from other investors

WLR 28 - loan parts 2

News you should know

Lend to more businesses in these 3 easy steps.

Following the introduction of the E band, you may wish to update your autobid settings by following the 3 easy steps below. You can read more about our new risk band on the blog.

(1) Log back into your account and navigate to Autobid.

(2) If your Autobid is on:

Take a note of your current settings
Click ‘Turn Autobid Off’
Use the ‘Advanced Settings’ to include the E risk band
Click ‘Turn Autobid On’

(3) If your Autobid is off:

Use the ‘Advanced Settings’ to include the E risk band
Click ‘Turn Autobid On’

Providing more information around defaulted loans

If you have any defaulted loans you may have noticed we apply a RAG (Red, Amber, Green) rating system, also known as a traffic light system, in the loan comments on your dashboard. This is to help you assess the quality of your defaulted loans, and your expected return over a certain period of time.

Loan defaulted last week

E-cigarette supplier. Loan 11038. Risk band B

This Cardiff business has been running since 2011, and is entering insolvent liquidation. All affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans. Read how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

 

Funding Circle & Sage announce partnership to support more small businesses

We’re delighted to announce our new partnership with Sage, one of the world’s leading providers of software solutions for small businesses.

Sage provide a range of invaluable business tools including software for accounts, payroll, HR and payments, and has in excess of 6 million customers worldwide.

The tie-up involves Sage referring their small business customers to Funding Circle in cases where their customers are in need of business finance.

We believe that signposting alternative finance providers from such a trusted brand will help to raise the profile of the options now available to business owners, and bring more lending opportunities to the 40,000 Funding Circle investor community.

This partnership follows our agreement with Santander last year, who are also referring their business customers to Funding Circle where we are better placed to help.

Are you helping transform a former school into family homes?

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

Birchmead Homes Property Development

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

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

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

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

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

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

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

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

What does ‘mobile optimised’ really mean?

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

What does this mean for small businesses?

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

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

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

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

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

Is your website mobile friendly?

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

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

It’s never too late to change!

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

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

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

You’re helping even more small businesses | Weekly Lending Review

Week 27: 29 June – 3 July 2015

It was an exciting week at Funding Circle as we introduced a sixth risk band, to help even more small businesses access finance, whilst offering you more lending opportunities on the marketplace. More than £10 million made its way to businesses across the UK in just one week alone, thanks to your lending.

New loans available to you

There are currently 75 loan requests on the marketplace which are all available for you to lend to.

As part of lending to businesses, some may be unable to fully repay their loans, which is why diversification is so important. We’ve created a short video which runs through the basics of diversification and how you can diversify at Funding Circle.

The total value of new loans listed on the Funding Circle marketplace was £8,709,500, averaging at £66,484 per loan. The largest loan value was £588,000 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 29-June represents the week of 29th June – 3rd July 2015.

Weekly average gross yield (2 weeks rolling)

Yield 2 27

Number of listed loans per week

Loans listed 27

Listed loan value per week

Loan value 27

Total amount lent

Amount lent 27

Loan parts available to buy from other investors

Loan parts 27

News you should know

Following the introduction of the E band, C- has been renamed to D

C- has been renamed to D to make our risk grading easier to understand. The new risk band structure is: A+, A, B, C, D, E,  where A+ is lowest risk.

Providing more information around defaulted loans

If you have any defaulted loans you may have noticed we apply a RAG (Red, Amber, Green) rating system, also known as a traffic light system, in the loan comments on your dashboard. This is to help you assess the quality of your defaulted loans, and your expected return over a certain period of time.

Loans defaulted last week

Industrial fastening stockist. Loan 3824. Risk band A

This Cambridgeshire business was incorporated in 2001 and is entering insolvent liquidation.

Building design. Loan 1839. Risk band B

This London business has been running since 1997 and has entered administration.

Vehicle recovery and repairs. Loan 3564. Risk band D

This Durham business was established in 2012 and has ceased trading.

Sports optics supplier. Loan 3788. Risk band D

This Surrey business was incorporated in 2010 and has ceased trading.

Agricultural contractor. Loan 6127. Risk band D

This County Fermanagh business has been running since 2014 and is 3 months in arrears.

Tarpaulin manufacturer. Loan 5387. Risk band A

This Suffolk business was incorporated in 2007 and has entered insolvent liquidation.

Digital agency. Loan 1372. Risk band C

This London business was established in 1996 and is 3 months in arrears.

All affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans. Read how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

 

Virgin Trains extends their travel discount for the Funding Circle community

Earlier this year we announced our exciting partnership with Virgin Trains as part of our ongoing commitment to helping small businesses stay ahead.

The partnership brought all Funding Circle customers, including investors and borrowers, 20% off train travel on the Virgin Trains West Coast Mainline.

virgin trains

We’re pleased to tell you all that Virgin Trains have extended the offer period until the end of the year, so you can book advance train tickets with a 20% discount until 29th December 2015.

Offer details: 20% off!

All Funding Circle customers can access a 20% discount on travel anywhere on the Virgin Trains West Coast Mainline until 29th December 2015. To book your advance tickets:

1. Go to http://www.virgintrains.co.uk/funding-circle/

2. Enter ‘Funding Circle’ as the company name

3. The password is ‘FCinvestor’ if you lend to businesses through Funding Circle, or ‘FCborrower’ if you are a small business customer

4. Terms & conditions apply

Tickets can be booked from 3 July – 29 December 2015, for travel between 4 July and 30 December 2015, whether it be for work or leisure.

For more information, please visit our partner page.

The Funding Circle team

Business lending through marketplaces surges. June’s industry news

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P2P business lending to eclipse consumer sector

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

The lenders of the revolution look familiar

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

2015 Digital Masters Awards

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

Peer-to-peer lending must mature to thrive

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

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

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

3 top business tips from Jason, director of Spartan Motor Factors

In June we caught up with Jason Farrugia, director of Spartan Motor Factors, who shared his top tips for running a small business.

Investor monthly banner - spartan 3

Spartan Motor Factors are the fastest growing vehicle parts supplier in South Wales, with branches in Newport, Cardiff and Bridgend. They stock a wide range of batteries, clutches, springs, braking and services parts, lighting and much more.

Established in 2012, Spartan Motor Factors has impressively been voted CAT Awards Small Factor of the Year for the past three consecutive years. The directors feel it’s essential that all customers are provided with truthful and accurate information regarding the price, availability and delivery time for vehicle parts, and they take great pride in having advisors with over ten years experience in the industry.

Back in May 2014, Spartan Motor Factors borrowed £75,000 from 1,251 investors to open a new branch. In this short video you’ll meet Jason and find out why he believes constantly analysing your stock profile is so important.

These are his top tips:

  • Know your stock and customer needs
  • Keep on top of cashflow
  • Build great relationships with your suppliers

If, like Jason, you’re looking for business loan, You can check your eligibility online in just 30 seconds.

Apply online and a member of our team will get back to you within 2 working days.

We’ve helped more than 8,000 businesses in the UK and US access finance for a range of finance needs.

Furnishing the set of Downton Abbey, thanks to over 2,000 people | Weekly Lending Review

Week 26: 22 – 26 June 2015

The Stripes Company, based in Chester, supplied delightful deckchairs and sun shelters for the set of Downton Abbey! A striped fabric specialist, they have borrowed over £175,000 across 3 Funding Circle loans since 2011 to help with cashflow. Founder Maria discusses her experience of Funding Circle on the blog.

New loans available to you

There are currently 47 loan requests on the marketplace which are all available for you to lend to.

As part of lending to businesses, some may be unable to fully repay their loans, which is why diversification is so important. We’ve created a short video which runs through the basics of diversification and how you can diversify at Funding Circle.

The total value of new loans listed on the Funding Circle marketplace was £11,375,820, averaging at £64,811 per loan. The largest loan value was £430,000 and the smallest loan value was £7,500.

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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 22-June represents the week of 22nd – 26th June 2015.

Weekly average gross yield (2 weeks rolling)

WLR 26 Yield

Number of listed loans per week

WLR loans listed

Listed loan value per week

WLR 26 Loan value

Total amount lent

WLR 26 Amount lent

Loan parts available to buy from other investors

WLR 26 Loan parts

News you should know

We’re introducing a new risk band and renaming C-

We’re excited to announce that we’re introducing a sixth risk band, E, to help more small businesses access finance, whilst offering investors more borrowers to lend to. These loans will be listed on the marketplace over the coming weeks.

Within the next few weeks, C- will also be renamed to D to make our risk grading easier to understand. The new risk band structure will be: A+, A, B, C, D, E,  where A+ is lowest risk. Please note all loans parts you hold which are C- will be renamed to D shortly.

More information about the new risk band and renaming risk band C- to D can be found on our blog or if you have any questions about this update please contact us.

Providing more information around defaulted loans

If you have any defaulted loans you may have noticed we apply a RAG (Red, Amber, Green) rating system, also known as a traffic light system, in the loan comments on your dashboard. This is to help you assess the quality of your defaulted loans, and your expected return over a certain period of time.

Loans defaulted last week

Retail outlet. Loan 8629. Risk band B

This Glasgow business was established in 2008 and is entering liquidation.

Building contractor. Loan 3322. Risk band C

This Merseyside business was incorporated in 2007 and has entered insolvent liquidation.

Heating control specialists. Loan 3156. Risk band A

This Hertfordshire business has been running since 2004 and has entered insolvent liquidation.

Dairy cow herd. Loan 7966. Risk band A+

This Staffordshire business was established in 2014, and the borrower has become unresponsive.

Car accessory specialist. Loan 9129. Risk band C

This West Midlands business was incorporated in 2011 and has ceased trading.

Legal service. Loan 6344. Risk band B

This Bedfordshire business has been running since 2014 and the owner is proposing an individual voluntary arrangement.

All affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans. Read how our collections and recoveries process works on our blog.
Enjoy lending, The Funding Circle Team

The new 10 minute application process at Funding Circle

We have launched a new 10 minute application process for introducers. This will allow you to submit loan applications twice as quickly as the previous application. In three easy steps, and on any device, you can prequalify your client for a loan. And in just 30 seconds, you will receive an indicative quote which you can discuss with your client.

Information required

As part of the new process, we only need to see total new debt over £25,000 and management accounts if filed accounts are older than 16 months.

To assess your client’s application we will need the following, which you can either upload after submitting the application when you are logged in, or email directly to the credit assessment team:

  • Latest full filed accounts
  • Last 3+ months of bank statements
  • If filed accounts are more than 16 months old we need a full year P&L and balance
  • sheet (management accounts, spreadsheets, accounting software reports are
  • acceptable)
  • Statement of personal assets and liabilities – if loan amount is £150,000 or larger

For more information about how to apply for a loan on behalf of your client, take a look at our new guide for introducers – available to download in your summary page. Log in now.

Flexi-fee option

Following feedback that you would like the option to decrease or increase the fee you charge clients based on the time you spend with them, you can also now change the total fee you charge your client. Please speak to your Business Development Manager to find out more about this flexi-fee option.

Next day payments

We have introduced next day payments, so you and your client will receive the loan and commission the day after completion.

New risk band

Finally, we’re excited to announce that we will soon be launching a sixth risk band, to help more of your clients access finance. These loans will be listed on the marketplace over the coming weeks. Here’s what you need to know:

  • the new risk band is called E
  • the minimum bid rate for E loans is 18.2% and the maximum is 20% (gross interest rates)
  • businesses that are rated as an E may generally show lower profit after tax than businesses in other risk bands, but they will not have poor payment performance. We may be able to reconsider clients as long as they were not declined for policy reasons, such as director credit history or trading history
  • C- is being renamed to D to make our risk grading easier to understand
  • this does not mean they have been reassessed and have higher expected bad debt rates, we’re just changing the name

We hope this has been a useful update on improvements to the Funding Circle application process. If you have any questions or feedback, please get in touch with your Business Development Manager or get in touch by emailing introducer@fundingcircle.com

The Funding Circle team