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If you are unsure as to how to manage your cookies or require more information, we have provided the following links to the settings pages for the most commonly used web browsers: Firefox internet settings Chrome cookie settings Opera cookie settings Safari cookie settings Internet Explorer cookie settings x Calculating the average net return The 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: Daily cashflows (C): These are the cashflows in and out of each investor's account, including: Any amounts lent to businesses – this amount is registered from the day your bid is placed. Any amounts received – in repayments (which include interest and principal), any proceeds from secondary market sales and any promotional earnings. These are net of fees. These cashflows do not include: Any deposits into your account which are not yet lent to businesses Any withdrawals 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). Principal outstanding at the end of the period (P): This will reflect the outstanding amount lent to businesses, less any bad debts you have incurred during the period Accrued interest throughout the period (I): 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: N = the total number of days since you started lending We create an annualised return figure ( r ) by calculating this over a 365 day period. We then use this formula to calculate the return: Limitations to this calculation This 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: It is before tax: as different investors have different tax rates and some earnings are taxed differently. Read more. It does not include any amounts not lent to businesses It does not include the end-to-end cycle of loan repayments Past returns are not necessarily a guide to future returns 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. Done x Calculating your return This estimated return is your return 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: A+ = 0.6% (ie, each year we expect 0.6% of all loans to A+ businesses to become bad debts) A = 1.5% B = 2.3% C = 3.3% C- = 5% These estimates are provided as a guide only. Actual bad debts vary for each investor. You may incur more or less bad debts than estimated. With lending to businesses, there is the risk that the value of your investment could go down as well as up. Returns are shown before tax, to read more about tax treatment click here. 30,993 investors in the UK have lent to businesses £327,559,680 lent to British businesses Contact us About us Help Media Terms of use Security Forum Blog Intermediaries Jobs Cookie policy API 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. Funding Circle is authorised and regulated by the Financial Conduct Authority under Interim Permission. Funding Circle is not covered by the Financial Services Compensation Scheme. Funding Circle Limited (Co. No. 06968588; CCL No. 635439) and its wholly owned subsidiary, Funding Circle Trustee Limited (Co. No. 07239092; CCL No. 640243), are registered in England and both have their registered office at 3 Dorset Rise, London EC4Y 8EN. Copyright © Funding Circle 2014. All rights reserved.