Funding Circle is the world’s leading lending platform where investors directly lend to small businesses
- Investors have lent
to UK businesses
- billion Lent to UK businesses
- Businesses have
Lending through Funding Circle helps boost the economy, create jobs and build homes across the UK
Read the full report by the Centre for Economics and Business Research, August 2016.
You can earn attractive, stable returns
It is important to remember that past performance is not a guide to future performance, and your capital is at risk when lending to businesses. Actual returns may be higher or lower than estimated.
*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. Data is correct as of 1st December 2016. See the full calculation here.
All time average annual return, after fees and bad debts, but before tax
Interest earned by investors after fees and bad debt, but before tax. Correct as of 1st December 2016
How Funding Circle loans have performed by year of origination
- Estimated annual return at origination
- Updated estimated annual return as of 1st December 2016
This chart shows how Funding Circle loans are performing, after fees and bad debt but before tax, by year of origination - or the year the loans were made. It shows both the return we estimated the loans to achieve at origination, and our updated estimates incorporating actual returns received so far for each year of loans. Data correct as of 1st December 2016.
It’s important to remember that it can take up to five years for loans to be fully repaid, so the updated annual returns shown may change over time as some businesses will not be able to fully repay their loans. See how these returns are calculated.
Bad debt is a normal part of lending to businesses
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. We call this bad debt. When this happens, we work with the borrower to get the best result for all parties and recover as much for you as possible. Read more on how our collections and recoveries process works here.
Annual bad debt rate, after recoveries, of all Funding Circle loans by loan amount
Recovered on defaults from 2010 to 2014 (inclusive). Data correct as of 1st December 2016
Annualised bad debt rate by year of origination
- Updated annualised bad debt rate as of 1st December 2016*
Bad debt has remained stable since 2012
This chart shows the annualised bad debt rate for each year of origination. The annualised bad debt rate is the percentage of loans, by loan amount, that do not repay over their total lifetime. Data is correct as of 1st December 2016.
*The updated annualised bad debt rate is calculated by taking the actual bad debt rate for each year of origination to date, and incorporating the estimated bad debt rates for years that have not yet fully matured. It includes the recoveries we expect to make from each year of origination.
What could happen to returns in an economic downturn?
As part of our commitment to building a stable and sustainable platform, we conduct stress tests to simulate what could happen to investor returns during an economic downturn.
The results show that investor returns are likely to remain attractive even in an economic downturn. See the full results of our stress test on our blog.
Diversification aids stable returns
Diversification, where you spread your lending across many businesses, is the best way to earn a stable return. By following these two steps, you can reduce the risk of experiencing a volatile return:
- Lend to at least 100 businesses
- Lend no more than 1% of your portfolio to each business
Investors earning a positive return after following these steps for at least a year
Investors earning 5% or more after following these steps for at least a year. Data correct as of 1st December 2016
How does diversification work?
We’ve made diversification at Funding Circle simple. Watch our short video to learn more.Watch the video
Our platform performance in detail
We’re building a better financial world
Part of this is being open and transparent, which is why we publish performance data for all loans listed on the Funding Circle platform.
Total amount lent to UK businesses
Number of loans funded since 2010
All members of the Peer-to-Peer Finance Association provide statistics showing figures on non-performing loans and bad debts. Data updated quarterly; correct as of 30th September 2016.
|Actual arrears more than 45 days||-||-||-||-||-||-|
|Actual lifetime bad debt rate||-||-||-||-||-||-|
|Expected lifetime bad debt rate||-||-||-||-||-||-|
|Updated lifetime bad debt rate||-||-||-||-||-||-|
|Average age of loans (months)||-||-||-||-||-||-|
This table outlines how loans are performing in more detail.
You can see how much has been lent and repaid so far for each year.
Funding Circle loanbook highlights
Loans originated and repaid
Since we launched in 2010, investors have lent over a billion pounds through the platform, making Funding Circle one of the largest sources of finance for small businesses in the UK.
On-time and late payments
Occasionally businesses may experience difficulties as they repay their loan. This may be due to a large supplier pulling out, or they may themselves be a recipient of a late payment from one of their customers. In these instances, we work with the borrower to help them get back on their feet so they can make full repayments as soon as possible.
Bad debt and recoveries
When a business is unable to repay their loan, our in-house collections and recoveries team work on your behalf to get the best result possible. You can read more about the recoveries process on our blog.
Download the Funding Circle loanbook
We update our published loanbook on a daily basis for the benefit of Funding Circle investors. Registered investors can download the entire Funding Circle loanbook.Download the loanbook
Ambitious to grow? Explore how a loan can help you and your business succeed.Get a personalised quote