What is Funding Circle?

Funding Circle was established in 2010 and now has over 29,000 active investors who between them have lent over £290 million to over 4,000 British businesses. As a peer-to-peer lender, rather than a traditional bank, the firm connects people looking to earn high, stable, long term returns on their money with businesses looking to borrow in order to grow and expand. Small businesses borrow between £5,000 and £1 million and typically access finance within two weeks at a relatively low rate. Each individual lends to as many businesses as possible in order to spread their risk. As an investor, you can either manually choose which firms to lend to, or use the Autobid function to make contact with borrowers who fit your criteria, both in terms of credit rating (from A to C-) and interest rate you wish to earn.

    • Provider/Product name Lending

      Funding Circle


    • Expected annualised rate after fees and bad debt 7.50% variable
    • More details

      You lend to… All types of businesses including limited companies, sole traders and partnerships in the UK (Funding Circle grades their credit rating A+ to E)
      When do I earn interest? Typically, once your money is lent out you receive repayments every month (interest and principal)
      Can I withdraw money before term ends? Yes, you can sell some or all of your loan parts to other investors. There may be some circumstances which prevent loan parts from being sold, for example loans that have had their risk bands ‘downgraded’
      Provision fund? Investors can manage their risk by lending to hundreds of different businesses. You receive all income from the borrower upfront rather than any being allocated into a provision fund for when, and if, a bad debt occurs
      Minimum Investment: From £20 with no maximum

    • Go to site

    Great for
    You can choose each and every individual business you would like to invest in
    If you would like more of a hassle-free solution, you can pre-select the businesses you want to lend to and the rate you're happy to earn and let the Autobid invest for you
    But be aware that
    1% annual fee applies on the money you have lent
    There is no provision fund within the Funding Circle platform and is operated similar to an investment - the higher the risk band, the higher rates apply - but remember these are the riskier business
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.


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