Amount lent £650,630,820

Loan parts traded £108,238,885

Average annual return (all time)
?

What is the average return and how is it calculated?

* 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 correct as of 19 January 2015. See the full calculation here.

6.3%
(after fees and bad debts, but before tax)

For average annual return by loan origination year, click here.

Latest gross interest rates

The chart shows the minimum, weighted average, and maximum simple interest rate bids that have been accepted on loans at Funding Circle.

These are the interest rates achieved by investors before fees and bad debts. Remember, you are lending to businesses so your capital is at risk.

You can use the dropdown menu to change the number of loans included. This data is updated daily.

Join the Funding Circle 100 Club

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. 58% 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 08 April 2015.

Investors lending to at least 100 businesses and a maximum exposure of 1% of the total amount lent to any one business Investors lending to at least 50 businesses and a maximum exposure of 2% Investors lending to at least 10 businesses and a maximum exposure of 10%

* The returns shown are based on the 28,041 investors who have been lending for at least 1 year (70% 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. 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.

Managing risk: incorporating bad debts into your lending decisions

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. You should consider this percentage when deciding the gross interest rate you’d like to bid to businesses.

To help with calculating, 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 your headline yield (ie, interest rate offered to the business) less the 1% Funding Circle annual servicing fee to calculate your estimated net return after fees and bad debt, but before tax.

A+ A B C C- Total
Estimated annual bad debt % 0.6% 1.5% 2.3% 3.3% 5.0% 2.0%

Bad debt performance

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. E.g. during the first half of 2013 the number of bad debts is below estimated levels. Data is correct as of 08 Apr 2015.

Bad debt performance H1 2014 Bad debt performance H2 2013 Bad debt performance H1 2013 Bad debt performance H2 2012 Bad debt performance H1 2012 Bad debt performance Q4 2010 and 2011

Current bad debt performance and estimated lifetime bad debt levels

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 and C- in July 2013. This data is updated daily.

A+ A B C C- Total
Current bad debt % 0.1% 1.3% 2.1% 2.5% 2.4% 1.5%
Estimated lifetime bad debt % 1.2% 3.1% 4.8% 7.0% 11.0% 4.2%

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.

Bad debt performance over time

All members of the Peer-to-Peer Finance Association also provide statistics showing figures on non-performing loans and bad debts. Data is correct as of 18 May 2015.

2010 2011 2012 2013 2014 2015
Actual arrears as % of outstanding balances 0.0% 0.6% 0.7% 0.2% 0.0% 0.0%
Total amount of payments more than 45 days late but not defaulted, as a percentage of all outstanding balances from loans made in a calendar year.
Actual lifetime bad debt rate 4.1% 5.6% 3.8% 3.0% 1.0% 0.0%
Total bad debt over the lifetime of the loans​, as a percentage of amount lent in a calendar year. Please note this is not an annualised number.
Estimated lifetime bad debt rate 3.2% 3.3% 4.2% 4.5% 4.6% 4.1%
Estimated lifetime bad debt rate as a percentage of amount lent in a calendar year. 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 and C- loans over time.
Amount lent £2m £17m £49m £129m £278m £159m
Loans originated in calendar year as a pound amount.

Our marketplace performance: in detail

The table below shows the current performance of all loans at Funding Circle. This data is updated daily.

A+ A B C C- Total
Loans originated 150,304,720 193,092,920 145,594,620 119,398,280 41,134,820 649,525,360
Principal repaid 30,954,729 60,104,580 51,553,266 43,023,544 9,311,721 194,947,840
Loans outstanding 119,036,928 130,070,807 90,223,096 72,709,039 30,684,221 442,724,091
On time 118,196,399 129,232,685 89,438,885 71,787,109 30,255,180 438,910,256
Late < 30 days 366,184 277,248 207,456 430,897 209,739 1,491,526
Late >= 30 days 464,927 479,420 269,943 324,174 219,302 1,757,767
Late >= 90 days 9,418 81,454 306,812 166,859 - 564,542
Recoveries 117,363 476,708 754,396 719,200 161,786 2,229,454
Bad debt 195,699 2,441,705 3,056,882 2,946,497 977,092 9,617,875
A+ A B C C- Total
Loans originated 1,685 3,178 2,702 2,231 902 10,698
Fully repaid loans 226 453 434 279 61 1,453
Loans outstanding 1,448 2,636 2,156 1,865 816 8,921
On time 1,437 2,615 2,137 1,835 802 8,826
Late < 30 days 3 7 5 16 6 37
Late >= 30 days 6 11 8 10 8 43
Late >= 90 days 2 3 6 4 - 15
Recoveries 8 57 78 48 12 203
Bad debt 3 32 34 39 13 121

Registered lenders can download the entire Funding Circle loan book.