Great rates on your terms are only a step away!
Accepted loans £234,692,280
Loan parts trades £51,042,149
Average net return:
(after fees and bad debts, but before tax)
This is the average return investors* are currently earning after fees and bad debt, but before tax. It is calculated using each investors’ earnings and bad debts received during the course of their investing. Data correct as of 19 February 2014. Show me the calculation.
* This is the weighted average net return across all investors lending for 180 days or more through Funding Circle over an annualised period (simple average = 5.8%; median = 6.5%, ie, 50% of investors are earning 6.5% or more). It includes all earnings and is calculated after fees and bad debt but before tax. Past performance is not a guide to future performance. This investment involves lending to UK businesses, where the value of your investment is variable and can go down as well as up. Data correct as of 19 February 2014.
The chart shows the minimum, weighted average, and maximum simple interest bid rates that have been accepted on loans at Funding Circle.
You can use the dropdown menu to change the number of loans included.
This data is updated daily.
Here you can keep up to date on the full history of bad debts and compare these with the estimated lifetime bad debt levels at Funding Circle. Please note, that the C risk band was introduced in October 2011 and C- in July 2013.
|Current bad debt %||1.0%||1.0%||2.1%||1.4%||0.8%||1.4%|
|Estimated lifetime bad debt %||1.2%||2.9%||4.6%||6.6%||10.5%||4.4%|
Estimated life time bad debt is the percentage of all Funding Circle loans which are not expected to be repaid over their total lifetime (remember we offer 6, 12, 24, 36, 48 and 60 month loans).
For example, for every £1000 of loans in the A+ risk band we estimate that there will be around £10 of bad debts over the life of the loans.
The bad debts could happen at different points throughout the lifetime of the loan so the annualised impact could vary.
As part of investing to small business, it’s important to remember that a percentage will be unable to repay their loan, because something significant changes in their business.
While this percentage is small, it’s still an important consideration when deciding the interest rate you’d like to offer to businesses.
To help with calculating, you can use these estimated annual bad debt rates as a guide to what to expect on a year-to-year basis.
Simply deduct the below estimated bad debt percentage from your headline yield (ie, interest rate offered to the business) less the 1% Funding Circle annual servicing fee to calculate your expected net return after fees and bad debt, but before tax.
|Estimated annual bad debt %||0.6%||1.5%||2.3%||3.3%||5.0%||2.3%|
Below is the latest distribution of net returns for investors by different levels of diversification: for those lending to at least 100, 50 and 10 businesses with a maximum of 1%, 2% and 10% of their lending to any one business, respectively. 71% of investors that are lending to at least 100 businesses (with a maximum exposure of 1% of their total lending to any one business) have earned more than 6% net per year.* The returns shown are based on the ~19,700 investors who have been lending for at least 180 days (75% of all active investors) and have been at the stated level of diversification for at least 75% of the days they have been lending for. Data correct as of 19 February 2014.
The table below shows the current performance of all loans at Funding Circle. This data is updated daily.
|Amount in pounds (£)||A+||A||B||C||C-||Total|
|Late < 30 days||127,970||278,002||545,096||218,309||74,698||1,244,074|
|Late >= 30 days||88,486||253,372||149,587||346,306||-||837,751|
|Late >= 90 days||20,681||31,095||24,561||63,626||98,805||238,768|
|Fully repaid loans||64||118||105||60||1||348|
|Late < 30 days||4||8||14||11||3||40|
|Late >= 30 days||2||7||9||12||-||30|
|Late >= 90 days||1||3||3||3||1||11|
Registered lenders can download the entire Funding Circle loan book.
The net 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 net return:
This net 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 net return shows you the expected rate 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 estimate are provided a guide only. Actual bad debts vary for each investor. You may incur more or less bad debts than estimated and in lending to businesses, there is the risk that the value of your investment could go down as well as up. Net returns are shown before tax, to read more about tax treatment click here.