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Platform Analysis: Funding Circle

Funding Circle Key Information

Founded:
August 2010
Company No:
6968588
FCA Permission:
Fully Authorised
FCA Number:
635439

Account Details

Account Types:
General Investment Account (GIA) and Innovative Finance ISA (IFISA)
IFISA Status:
Available
Investment Structure/Bid Type:
Autobid
Loan Type:
Business

Product Name

Conservative

Investors automatically spread capital between borrowers that have been assessed as lower risk. This product has a lower projected return, with a lower estimated bad debt rate.

Product Details

Term:
Ongoing
Min Investment:
£1,000
Max Investment:
No Max
Advertised Rate:
4.8%

Product Name

Balanced

Investors automatically spread capital between the full range of creditworthy borrowers. This product has a higher projected return, with a higher estimated bad debt rate.

Product Details

Term:
Ongoing
Min Investment:
£1,000
Max Investment:
No Max
Advertised Rate:
7.2%

Actual Net Returns v Estimated

Actual Default v Estimated Bad Debt v Actual Bad Debt

Amount Lent & AUM

Investor Type

Loan Purpose

Loan Region

Weighted Borrower Rate

Year Min Borrower Rate Average Borrower Rate Max Borrower Rate
2010 6.37% 8.01% 10.69%
2011 6.17% 8.22% 10.09%
2012 5.67% 9.24% 13.53%
2013 4.47% 8.49% 13.19%
2014 6.00% 9.88% 14.51%
2015 6.00% 9.50% 18.37%
2016 4.90% 9.57% 21.90%
2017 4.50% 9.78% 21.90%

Weighted Loan Amount

Year Min Loan Amount Average Loan Amount Max Loan Amount
2010 £5,000.00 £29,269.33 £50,000.00
2011 £5,000.00 £41,031.84 £100,000.00
2012 £5,000.00 £56,793.10 £300,000.00
2013 £5,000.00 £59,410.15 £500,000.00
2014 £5,000.00 £61,987.77 £650,000.00
2015 £5,000.00 £71,305.63 £650,000.00
2016 £5,000.00 £74,087.81 £646,360.00
2017 £5,075.00 £70,264.15 £776,250.00

Financial Summary

31st December 2016 31st December 2015
Revenue £39,278,007 £23,803,398
Loss -£13,337,090 -£18,006,020
Net Assets £9,971,668 £5,386,653
Cash Position £10,323,544 £9,567,445

Funding Circle is operating at a loss due to its continued growth objectives. Revenue increased 65% in 2016, from £23.8m to £39.3m. Furthermore, the company was cashflow positive for the first time during Q4 2016 and has reduced losses.

Limited time offer:
£100 bonus available for new investors

CLAIM BONUS

Overview

Funding Circle is a peer to peer lending platform where investors can lend money to small-to-medium sized businesses. Founded in 2010, Funding Circle has grown into the largest UK peer to peer lending platform focused on business lending and has expanded globally.

Risk and Security

The principal risk is a large number of borrowers default on their loan commitments. This may reflect poor economic conditions or Funding Circle’s credit sanctioning. Diversifying across a wide range of borrowers is the principal method of mitigating risk offered by Funding Circle. Funds are split into £20 chunks, so if £2,000 was invested, 100 businesses would be lent to, achieving 1% exposure per loan.

Recovery Process

The Funding Circle collections team will pursue any missed payments. If a business ceases trading and has a personal guarantee attached, Funding Circle Trustee Limited will attempt to recover the maximum amount possible as a creditor of the business.

Withdrawing Funds

To withdraw invested funds, investors must sell their loan parts to other investors on the Funding Circle secondary market. Funding Circle charges 0.25% to sell any loan commitments on the secondary market. If investors wish to sell quickly, they may offer a discount of up to 3% to new investors.

Platform Failure

Funding Circle has put in place arrangements to ensure investors continue to receive payments, as well as any uninvested cash sitting in their client account, should Funding Circle become insolvent. Funding Circle would transfer the servicing of loans to a third party service provider. Any funds sitting in cash are held in a segregated client account and can be transferred to the investor at any point. For more, read Orca’s Funding Circle review.