Funding Circle Review 2019

0 / 5
Overall score
Risk/Reward
3/5

Most loans are unsecured, but average expected return is below 8%. Other platforms offer better risk/reward ratios.

Easiness of use
4.5/5

Mature platform, sufficient information availability

Protection
3.5/5

Funding Circle has good reputation of vetting their offers, but most loans are unsecured and there is no buyback fund in place

Return
3/5

Historical returns of 4%-7% which is on the low end of the P2P platform spectrum.

WE LIKE

  • Reliable, good track record, funded over €5b+
  • Many institutional investors
  • Mature platform, auto-investment option
  • Public company -IPO in 2018- and regulated
  • Option to exit early through secondary market

WE DON'T LIKE

  • Majority of loans is unsecured
  • Return rates not great considering risk profile
  • Lenders charged 1% fee from repayments

SUMMARY

Funding Circle offers possibility of reasonable returns from a large, mature P2P company leveraging their excellent online platform, but risk/reward is lower than some of their competitors.

HISTORICAL AVG. RETURN

6%

Loan Types

BUSINESS LOANS

YEAR LAUNCHED

2010

TOTAL INVESTED

€ 5b+

TRUSTPILOT RATING

4.1/5

BUYBACK

NO

SEC. MARKET

YES

AUTO-INVEST

NO

Funding Circle Overview

Funding Circle is a listed peer-to-peer lender with operations in four European countries. Funding Circle have lent over €5 billion since they started in 2010 which makes them one of the largest P2P lenders in the world.

What is Funding Circle?

On Funding Circle, loan agreements are directly between the lender and the borrower. Funding Circle acts as a middle man, managing loans, payments and debt collection.

Funding Circle is active since 2010, is trusted by more than 80.000 investors and went public in 2018. Since the IPO, Funding Circle’s share price has gone through bumpy ride, grabbing a lot of media attention along the way.  As a listed company, their latest results and investor reports are found here.

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How do I get started on Funding Circle?

The requirements differ per the four countries in which the company operates (UK, Germany, the Netherlands, US) but in general opening an account with Funding Circle and getting to know the platform works easy and straightforward. 

After creating a free account and confirming your e-mail,  you have direct access to the overview of current loans. Here you can place and confirm an investment, starting at £100 / €100. As soon as a loan has been fully financed, the amount you invested will be collected from your account.

Is Funding Circle safe to use?

To review how safe Funding Circle is to invest in, we consider the following areas:

As a large, public company Funding Circle is well funded.

In the UK, Funding Circle is regulated by the Financial Conduct Authority (FCA) under FCA number 722513. It’s important to note that the FCA is not the same as the FSCS (Financial Services Compensation Scheme), so capital is not protected as it would be in a bank.

The available loans are rated by risk grades A+ to E, where A+ represents the least risk but also the least interest. Most loans are unsecured.

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