Amount lent £1,087,348,780

Loan parts traded £169,190,599

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 is correct as of 01 January 2016. See the full calculation here.

7.0%
(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 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?

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.

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. 64% 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 01 January 2016.

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 21,086 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 (44.3% 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.

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.

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.

A+ A B C D E Total
Estimated annual bad debt % 0.6% 1.5% 2.3% 3.3% 5.0% 8.0% 1.8%

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. Data is correct as of 07 January 2016.

Bad debt performance H1 2015 Bad debt performance H2 2014 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, D in July 2013 and E in July 2015. This data is updated daily.

A+ A B C D E Total
Current bad debt % 0.3% 1.3% 2.2% 3.0% 3.7% 1.1% 1.5%
Estimated lifetime bad debt % 1.1% 3.1% 5.0% 7.2% 11.3% 19.5% 4.0%

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 07 January 2016.

2010 2011 2012 2013 2014 2015 2016
Actual arrears as % of outstanding balances 0.0% 0.0% 0.1% 0.1% 0.1% 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 4.0% 5.2% 3.5% 4.1% 2.1% 0.3% 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% 3.6% 3.5%
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, D and E loans over time.
Amount lent £2,195,200 £17,397,500 £49,239,620 £129,217,080 £278,573,020 £530,585,160 £54,322,520
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 D E Total
Loans originated 356,882,140 302,533,020 208,461,200 150,347,140 58,557,600 9,857,620 1,086,638,720
Principal repaid 84,268,639 110,815,018 83,755,050 68,754,564 19,413,689 665,258 367,672,217
Loans outstanding 271,199,373 186,916,021 118,741,462 75,666,222 36,663,217 9,084,740 698,271,034
On time 268,503,020 184,261,511 116,793,428 74,497,782 36,002,130 8,973,561 689,031,431
Late < 30 days 2,516,845 1,926,642 652,425 418,291 112,602 31,806 5,658,611
Late >= 30 days 81,852 656,902 1,058,258 555,237 548,485 79,373 2,980,106
Late >= 90 days 97,656 70,966 237,352 194,912 - - 600,886
Recoveries 394,371 941,058 1,299,602 1,415,363 291,508 - 4,341,903
Bad debt 1,019,757 3,861,803 4,658,106 4,510,991 2,189,187 107,622 16,347,466
A+ A B C D E Total
Loans originated 3,895 4,723 3,744 2,807 1,225 226 16,620
Fully repaid loans 512 900 847 666 183 6 3,114
Loans outstanding 3,353 3,687 2,724 1,995 973 219 12,951
On time 3,335 3,645 2,682 1,959 949 215 12,785
Late < 30 days 14 24 15 14 8 2 77
Late >= 30 days 2 14 24 15 16 2 73
Late >= 90 days 2 4 3 7 - - 16
Recoveries 14 96 134 98 36 - 378
Bad debt 16 40 39 48 33 1 177

Registered investors can download the entire Funding Circle loan book.