Funding Circle is the UK's first ever online marketplace. Members of the public have lent £1 million to small businesses in the first ten weeks of operation.
Funding Circle has given loans to 35 creditworthy businesses across the UK. These range from a water treatment company in Scotland, to a legal services provider in North Wales and a t-shirt printing company in London. To date the average loan size has been £30,000 and has been borrowed at an average interest rate of 8.2 per cent, substantially below the 12 per cent that banks typically charge businesses.
Lenders are aged from 18 to 80 with businesses being able to borrow between £5,000 and £50,000 for either one or three years with the loans repayable monthly.
Each loan is comprised of small amounts of borrowing from many different people who compete to lend to the business in question, enabling it to borrow at a better rate.
The Funding Circle model has been designed to reduce risk to lenders. Experienced Funding Circle underwriters comprehensively assess each application using the same information that banks use and only allow established and creditworthy businesses into the marketplace. Approved borrowers are then split into risk bands to give lenders a clear indication of the level of risk entailed in lending to them. To date, all businesses have fully repaid on time.
For more information go to: http://www.fundingcircle.com/