‘The whole process from start to finish was very efficient and professionally handled. We were kept advised at every stage. From application to funds availability only took 3 weeks.’ An independent reviewer of Funding Circle on Trustpilot.co.uk, March 2014
And could get your loan in days
The return is a percentage, calculated to show the return investors* have earned through Funding Circle after fees and bad debt, but before tax, over an annualised period.
To calculate it we take the following:
We take the sum of the cashflows for every day the investor has been lending (ie, from day 1 right through to the current day).
This will reflect the outstanding amount lent to businesses, less any bad debts you have incurred during the period
This is the amount of interest you have earned up until the current day but has not yet been paid to you
The above inputs are taken over a given time period so we can calculate the return for each investor, whereby:
We create an annualised return figure ( r ) by calculating this over a 365 day period.
We then use this formula to calculate the return:
This return expression is just one way to show the returns investors have made through Funding Circle. We think it is the most useful and accurate way to measure investment performance because it takes into account both our fees and any bad debts but as with many calculations it has some limitations, including:
There are other methods for evaluating historical or potential investment return that you could choose to use instead and you may want to consider these methods as well.
This estimated return is your return after fees and bad debt, but before tax. This calculation takes your bid rate and deducts the 1% annual investor fee and estimated bad debts for this risk band (based on a fully diversified portfolio lending to all businesses within that risk band).
Annualised, estimated bad debts by risk band are:
These estimates are provided as a guide only. Actual bad debts vary for each investor. You may incur more or less bad debts than estimated. With lending to businesses, there is the risk that the value of your investment could go down as well as up. Returns are shown before tax, to read more about tax treatment click here.