Funding Circle

Funding Circle is a premier peer-to-peer (P2P) lending platform that connects small businesses with investors. While the US arm focuses on institutional investors, the UK platform still allows individual retail investors to lend money directly to vetted small and medium-sized enterprises (SMEs). Investors earn interest on their loans as businesses make monthly repayments.

The platform offers a hands-off lending tool that automatically diversifies your investment across hundreds of businesses to mitigate risk. Historically, returns have outperformed traditional savings accounts, though capital is at risk. It is a legitimate and regulated platform (FCA in the UK) that has facilitated billions in loans to support the real economy.

Frequently Asked Questions

1. Can I invest from the US?

Currently, Funding Circle US has paused active investing for individual retail investors to focus on institutional funding. However, retail investing remains a core product for residents of the United Kingdom. US residents should check for updates or look at alternative platforms.

2. specific minimum investment?

In the UK, the minimum transfer to start lending is typically £100, making it accessible to most investors. You can lend as little as £10 to a single business, allowing for massive diversification even with a small portfolio. This helps spread the risk of any single default.

3. Is my money guaranteed?

No, peer-to-peer lending is an investment, not a savings account, and is not covered by the FSCS deposit protection scheme. If a business you lend to defaults, you could lose your capital, though Funding Circle's recovery team works to retrieve assets.

4. How do I get my money back?

You receive monthly repayments of principal and interest which are added to your Funding Circle account. You can withdraw these funds to your bank account at any time, or use the trading tool to sell your active loans to other investors for earlier liquidity (subject to demand).

5. specific fees for investors?

Funding Circle typically charges an annual servicing fee (e.g., 1%) which is deducted from the interest payments you receive. The interest rates displayed to you are usually net of this fee, but you should always check the fee schedule for your specific region.