- Choose different lending options
- Lend easily with automatic tools
- No fees to access your money
- Support 100s of British businesses
- Earn tax-free returns with our ISA2
Lent to UK businesses since 2010
How lending works
At Funding Circle you lend directly to established small British businesses. They get the funds they need to grow, and you can earn attractive returns as they pay you back each month.
We have two types of accounts, ISA and Classic. They work in the same way, however the ISA account allows you to earn interest tax-free.2
Funding Circle has been the most lucrative [peer-to-peer platform]. Since I joined in August 2012, drip feeding cash in, my returns, after all fees and bad debt adjustment, have been 6.2pc.Martin Lewis, writing in The Daily Telegraph, 2013
Choose your lending option
To help you get the return you’re looking for, you can choose between two lending options. They are available for both our Classic and ISA accounts, and you can switch options at any time by logging in online.
6 - 7% 1
- You lend to the full range of creditworthy businesses to build a balanced portfolio
- This option has a higher projected return, with a higher estimated bad debt rate
5 - 5.5% 1
- You only lend to creditworthy businesses that have been assessed as lower risk
- This option has a lower projected return, with a lower estimated bad debt rate
Whichever lending option you choose, you’ll automatically lend your funds to relevant businesses. We’ll also collect and reinvest your monthly repayments.
- The rates shown are the annual projected returns, after fees and bad debts but before tax, that a diversified investor could earn with either lending option. Your actual return may be higher or lower than projected, for example due to the performance of the individual loans your funds are matched with, or a change in macroeconomic conditions. By lending to businesses your capital is at risk. See the full calculation here.
- The tax-free entitlement of an ISA depends on the individual circumstances of each investor, and may be subject to change in the future.
- Interest earned is after fees and bad debt, but before tax.
Simple to use at every step
With an easy-to-use online account, automatic tools and fantastic investor support, earning attractive and stable returns is quick and simple.
Open your online account
Set up your account in minutes and transfer money from your debit card.
Start lending automatically
Our automatic lending tool allows you to lend small amounts to hundreds of different businesses.
Receive monthly repayments
You’ll typically receive repayments with interest each month from the businesses you’ve lent to.
Repayments are reinvested
By keeping our lending tool switched on, your repayments will then be lent out again to help maximise your earnings.
Here to help if you need us
Call or email our experienced team and they can help answer any questions you have.
Need help? Call us.
Fees and tax
Projected returns are after our fee
Our 1% annual servicing fee is already included in your projected return.
Earn tax-free with the ISA account
All interest earned in an ISA account is tax-free4, helping to boost your earnings.
With Classic accounts, tax is not deducted from your earnings, but we’ll provide you with a tax statement you can download if you need it for your tax return.
Projected return is before tax
Tax is not deducted from your earnings, but you’ll get a tax statement you can download if you need it for your tax return.
Accessing your funds
Your funds will be lent to businesses who borrow over 6 months to 5 years, but you have options to access your money at any stage. When you’re ready you have two options:
Withdraw as you go
Turn off reinvesting and withdraw your repayments as they come in.
Withdraw a lump sum
Select the amount you’d like to withdraw, and sell your active loans to other investors using our automatic selling tool.
There are no fees for selling loans. While usually very fast, selling loans is not instant and depends on demand from other investors looking to buy at that time. You can only sell active loans with no credit issues, and not in the last month of their term.
Funding Circle, the largest peer-to-peer company in the UK, has received authorisation from the Financial Conduct AuthorityThe Financial Times, May 2017
How we manage risk
Only established businesses who have passed our rigorous credit assessment process can borrow through Funding Circle.
However, it’s important to remember that some businesses will not be able to fully repay their loan. We call this a bad debt, and it’s already accounted for in your projected return.
We reduce the impact of bad debt in 3 key ways:
Rigorous assessment with advanced technology
Our vastly experienced credit assessment team combine decades of experience from some of the world’s leading financial institutions. They use thousands of data points, innovative technology and their detailed understanding of business lending to assess every application, so only creditworthy businesses are approved.
Diversification and minimum investment
Diversification, where you spread your lending across many businesses, is the best way to earn a stable return. To help you build a well diversified portfolio, we suggest lending £2,000 or more, as this allows you to:
- Lend to at least 200 businesses
- Lend no more than 0.5% of your total to each one
93% of investors who have diversified like this for a year or more have earned 4% or more. If you’d like to start with less, the minimum initial transfer is £1,000. Correct as of 30th September 2018.
We collect debts for you
When a business is unable to fully repay their loan, we handle everything for you. Our collections and recoveries team work to recover as much as possible for you, and have won awards in their field for the outstanding recoveries they make for investors.
What could happen to returns in an economic downturn?
We regularly perform stress tests to simulate what could happen to investor returns during difficult periods, for example during an economic downturn.
The below chart shows what could happen to projected returns if the bad debt rate were to double, as estimated in a stressed scenario modelled by the Bank of England. In this scenario we estimate that returns would remain resilient.
Interest earned can cover a significant increase in bad debt
It’s important to note that modelling for future economic events is always an estimate, and as you are lending to your own individual portfolio your returns may be higher or lower. Past performance is not a guarantee of future returns.
The projected returns shown are for loans made in 2017, and are an average across the lifetime of the loans, so may vary from year to year.
Help British businesses thrive
You’ll lend to hundreds of established, creditworthy businesses in different sectors and regions throughout the UK. Whether they need new premises, a better website or an extra pair of hands, your lending will help them grow, create jobs and drive the economy forward.
- 8 years old (no start-ups)
- Employs 5–10 people
- Turnover of £420,000
We are proud members of the Peer-to-Peer Finance Association, which is a self-regulatory body for the sector to promote high standards of conduct and consumer protection.