* This is the weighted average return across all investors lending for 1 year or more through Funding Circle over an annualised period. It includes all earnings and is calculated after fees and bad debt but before tax. Investment through Funding Circle involves lending to small and medium sized businesses so your investment can go down as well as up. Remember, past returns are not necessarily a guide to future returns. Data is correct as of 31 March 2016. See the full calculation here.
For average annual return by loan origination year, click here.
The below table outlines how our loans are performing by year of origination. Its important to remember that it could take up to 5 years for loans to be fully repaid. This means that the actual return to date shown below will change over time as some businesses will not be able to fully repay their loans. The estimated annual return at origination is the return we expected the loans to achieve when they were made, after all future bad debts have been realised.
|Amount lent (£)||£17,397,500||£49,239,620||£129,217,080||£278,573,020||£530,585,160||£293,125,320|
|Average age of loans (months)||34||38||32||21||10||3|
|Actual annual return to date (%)||3.9%||7.2%||5.6%||7.6%||8.0%||9.2%|
|Principal repaid excluding bad debts (%)||100.0%||93.1%||77.9%||58.9%||28.3%||5.0%|
|Estimated annual return at origination (%)||5.7%||6.3%||5.3%||7.1%||7.1%||7.2%|
Data correct as of 01 June 2016.
See the full calculations for past performance by loan origination year here.
Past performance is not necessarily a guide to future performance.
The chart shows the latest minimum, weighted average, and maximum simple gross interest rates for loans accepted on the Funding Circle marketplace.
These are the interest rates achieved by investors before fees and bad debts. Interest rates are set by Funding Circle and are based on a number of factors including risk band and term of a loan. What are the rates and how are they set?
Interest rates are set by Funding Circle and are based on a number of factors including macroeconomic trends, expected bad debt rates and comparisons with the wider market for business loans. They differ based on risk band and term of the loan.
Interest rates are set for new loan requests before they are listed on the Funding Circle marketplace. Loans are given a risk band during our credit assessment process.
Please see below for the current gross interest rates for new loans.
|Term of loan (months)||A+||A||B||C||D||E|
|Est. annual bad debt rate||0.6%||1.5%||2.3%||3.3%||5.0%||8.0%|
Rates for property loans will be set on a case by case basis and will be clearly indicated on the individual loan request.
Once a business accepts their loan request the interest rate is fixed for the term of their loan. Interest rates for new loans will be reviewed regularly and may change.
Please be aware that the value of your investment can go down as well as up, and your actual return could be higher or lower as your capital is at risk.
You can use the dropdown menu to change the number of loans included. This data is updated daily. Remember, you are lending to businesses so your capital is at risk.
At Funding Circle investors lend to lots of businesses to spread their risk. The Funding Circle 100 Club is a guide for investors to diversify their portfolio and maximise their returns.
100% of investors who have been lending for at least 1 year and lent to 100 businesses equally are currently earning a positive return.
Below is the latest distribution of 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. 67% 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% average return after fees and bad debts per year. This data is based off actual returns for people lending for at least 1 year and does not include future expected losses. Remember, past performance is not necessarily a guide to future performance. Data is correct as of 31 March 2016.
The returns shown are based on the 21,751 investors who have been lending for at least 1 year and have been at the stated level of diversification for at least 75% of the days they have been lending (42.38% of all active investors). It includes all earnings and is calculated after fees and bad debt but before tax. Investment through Funding Circle involves lending to small and medium sized businesses so your investment can go down as well as up. This data is based off actual returns for people lending for at least 1 year and does not include future expected losses. Remember, past returns are not necessarily a guide to future returns.
See the full calculation here.
As part of lending to small businesses, it's important to remember that a percentage will be unable to repay their loan, because something significant changes in their business.
To help calculate your estimated return (after fees and bad debt, but before tax) you can use the 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 the gross interest rate less the 1% Funding Circle annual servicing fee.
|Estimated annual bad debt %||0.6%||1.5%||2.3%||3.3%||5.0%||8.0%||1.7%|
The below graphs highlight estimated lifetime bad debt levels versus the actual performance of loans. The graphs are broken down into six month groups with the exception of 2010/2011 which has a lower amount of lending and has been grouped together for better comparison.
The graphs show that the actual percentage of bad debt levels versus expectations has consistently improved. Data is correct as of 31 March 2016.
We also publish 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, D in July 2013 and E in July 2015. This data is updated daily.
|Current bad debt %||0.4%||1.5%||2.5%||3.5%||3.9%||1.7%||1.7%|
|Estimated lifetime bad debt %||1.1%||3.0%||5.0%||7.3%||11.4%||19.7%||3.9%|
The current bad debt is the percentage of all Funding Circle loans in default which have not been repaid.
Estimated lifetime bad debt is the percentage of all Funding Circle loans which are not estimated 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 expect that there will be around £12 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.
|Actual arrears (> 45 days)||0.0%||0.3%||0.2%||0.3%||0.5%||0.0%|
|Total outstanding balances more than 45 days late but not defaulted, as a percentage of amount lent in the calendar year.|
|Actual lifetime defaults rate||5.2%||2.9%||4.0%||2.8%||1.0%||0.0%|
|Total bad debt (defaults less recoveries) over the lifetime of the loans as a percentage of amount lent in the calendar year (please note this is not annualised).|
|Expected lifetime defaults rate||3.2%||4.2%||4.6%||4.4%||3.6%||3.5%|
|Expected lifetime bad debt as a percentage of amount lent in the calendar year. Estimated at origination of the loans. These figures are based on the weighted average of all risk bands of the loans funded in a calendar year. The estimated lifetime bad debt has increased as we have added C, D and E loans over time.|
|Updated lifetime defaults rate||5.2%||2.9%||4.2%||4.2%||3.6%||3.5%|
|Forecast lifetime bad debt rate for each year using actual bad debt to date.|
|Principal repaid excluding bad debts as a percentage of amount lent in the calendar year.|
|Bad Debt fund usage||N/A||N/A||N/A||N/A||N/A||N/A|
|For platforms using funds to protect investors against losses. Bad debt fund usage (bad debts in year as a % of funds raised in year).|
The table below shows the current performance of all loans at Funding Circle. This data is updated daily.
|Late < 30 days||686,484||585,447||805,997||1,069,512||627,795||104,872||3,880,107|
|Late >= 30 days||3,122,116||3,019,826||546,943||621,938||277,466||48,146||7,636,436|
|Late >= 90 days||61,775||52,439||233,548||271,204||24,247||-||643,212|
|Fully repaid loans||848||1,229||1,081||878||262||11||4,309|
|Late < 30 days||9||16||20||25||17||3||90|
|Late >= 30 days||16||28||19||19||11||3||96|
|Late >= 90 days||2||1||7||10||1||-||21|
Registered investors can download the entire Funding Circle loan book.
The late figures provided include both small business loans and property finance loans. We are working on splitting out the data on these two asset classes, and more information can be found in the Funding Circle loan book.