Investors Businesses How it works Marketplace About us Blog Open Close Call us to discuss your business loan on 0800 048 8747 Log in Join Help Loans funded so far £306,257,040 About Funding Circle 30,258 investors in the UK have lent to businesses £306,257,040 lent to UK businesses Supporting the backbone of the UK economy Funding Circle launched in 2010 because of two key problems: (1) businesses were struggling to access finance, and (2) people were getting a poor return on their money. The answer seemed simple: why not make it possible for people to earn a return on their money by directly lending it to businesses looking for funding? Now, thousands of individuals and some private organisations, local councils, universities and even the Government are working with Funding Circle to lend money to UK businesses. Sign up now How it works About us Frequently asked questions Contact us Blog Media Who is behind Funding Circle? Starting with 3 co-founders in 2010, over 100 people have since joined the team at Funding Circle. Funding Circle has grown with the backing of prominent venture capitalists, including Index Ventures, Union Square Ventures and Accel Partners, together with prominent British entrepreneurs Charles Dunstone, Ed Wray and Jon Moulton. Read about our team What the press say about Funding Circle Financial Times: Non-bank lending on rise for UK SMEs (11 April) The British government has thrown its weight behind non-bank lending in an attempt to improve a stagnant market. Peer-to-peer lending is a relatively new concept in the UK that allows individuals – from students to wealthy private investors and hedge funds – to lend to each other and to small businesses. It aims to provide better returns for lenders than from a bank deposit account while offering easier access to credit for borrowers. It is a small sector – only £100m-£200m a year changes hands on these websites – but is growing rapidly. Examples include Funding Circle. The Sunday Times: Tech gurus pump cash into loans site Two of the world’s biggest technology investors have backed a £10m fundraising by Funding Circle, a website that allows small firms to lend to one another. Union Square Ventures, which backed Twitter and the online games giant Zynga, has invested in the firm for the first time. Index Ventures, the Swiss-British fund that has backed more than 100 internet start-ups including Skype and online retailer Asos, has piled in more cash. More than 10,000 people have signed up to the platform, where businesses can borrow between £5,000 and £500,000 over one, three or five years. Read more media coverage Meet businesses already borrowing through Funding Circle This isn't just one person saying they believe in me, this is a whole group of people that think this is a good idea. Tom Williams, Ark Consultants Managing Director, Funding Circle borrower 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. 30,258 investors in the UK have lent to businesses £306,257,040 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. Apply now Apply now Apply now Apply now Apply now