Important update about lending at Funding Circle

After two years of the platform being paused for new investment from retail investors as we navigated and adapted to the Covid pandemic, we have taken the decision to permanently close the retail platform for new investments. This includes buying and selling loans through the Secondary Market. We will continue to manage your loan portfolio on an ongoing basis until all your remaining loans have been repaid or recovered. You will still receive repayments of interest and principal into your account which can be withdrawn any time by following a few simple steps.

We are very proud to have been the first platform to open up small business loans to retail investors and we have delivered strong returns despite the Covid pandemic. Since our launch in 2010, the 90,000 retail investors who have lent to small businesses have earned average annualised returns (after fees and bad debt) of 5% from loans in the retail platform. These loans have supported small businesses nationwide – helping them to grow, create jobs and support the UK’s economic recovery.

This has been a tough decision to make and one that we have taken following careful consideration. Since new lending was paused in April 2020, we focused on supporting small businesses to access finance through new and existing products, including through  Government schemes which retail investors were unable to participate in. During this period, retail investors have on average received 80% of their investments back and currently represent 5% of Funding Circle’s total loans under management. This period also saw some major changes within the industry including key players closing their retail platforms, proposed regulatory changes and broader market dynamics. These factors have led us to today’s announcement as we do not believe we could continue to operate a sustainable product for retail investors. We have informed the FCA of our decision and the considerations set out above.

Next steps

You don’t need to take any action – you will continue to receive repayments in your account from the businesses you have lent to which can be withdrawn immediately. We recommend setting up your nominated bank account if you haven’t done so already, or ensuring your current details are up-to-date, so you can withdraw your available funds quickly and securely in your account.

For any loans in your portfolio which have defaulted, we will continue to work hard to recover these funds through our Collections, Recoveries and Litigation teams, or by returning funds to you immediately through future sales of debt to third parties. 

Thank you

We want to say a huge thank you to every investor who has lent through the Funding Circle platform since 2010. You have all played a significant role in helping small businesses to access the finance they need to grow which, in turn, has created tens of thousands of jobs and contributed billions of pounds to the UK economy. This has been a difficult decision to make and we have considered a number of options, but we feel now is the right time to close retail lending.

For further information on this announcement, please read our FAQs.