Rates & Fees

Projected annual return: 7.2%% after fees and bad debts.

How is this rate calculated?

The projected return is a weighted estimate of the annual return after fees and bad debts that investors could earn from lending money to businesses seeking loans today. It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 3000 loans accepted on the platform. The average return is weighted by loan amount, compounded and before tax. The return is updated daily. See the full calculation here.

Things to remember about estimated return:

Returns can vary depending on level of diversification: the number of businesses investors spread their money across could have an impact on the returns they are earning. See how returns can vary by diversification.

Bad debt levels vary for each investor: with lending to small businesses, it's important to remember that a percentage will be unable to fully repay their loan, so your capital is at risk. This becomes a bad debt. Depending on the mix of businesses in your portfolio, you may incur more or less bad debts than average.

You may need to consider tax on your return: Read more here.

Rates increase with risk levels

Every Funding Circle business loan is given a risk band from A+ to E by our credit assessment team (A+ being the lowest risk). The interest rate is set by Funding Circle and is typically based on the risk band and the repayment term. View the current fixed interest rates here.

There is a corresponding bad debt estimate for each band which should be considered when choosing which businesses to lend to.

Remember that to earn your target return, you should make an allowance for bad debts, our annual servicing fee of 1% and any applicable tax.

Start Lending

As an investor you can lend using any of the methods below:

  1. Bid: on new loan requests listed on the platform.

  2. Buy: existing loan parts from other investors.

  3. Autobid & buy: Autobid will do both of the above for you. All you need to do is turn it on.

The gross interest rates available will be shown on each individual loan request.


Fees are simple at Funding Circle:

  • 1% annual servicing fee: Servicing fee taken directly from borrower repayments. If no repayment is made, no servicing fee is taken.

  • 0.25% sale fee: payable if you sell any of your loan parts to other investors.