Funding Circle FAQs

Lending directly to businesses through Funding Circle couldnt be simpler. To get started youll first need to set up your investor account via the website and select an investor profile, this should only take a couple of minutes. Following this, new investors will be required to take a short introductory quiz. This is designed to help ensure all investors understand how Funding Circle works and the nature of their investment and is a regulatory requirement. You will be able to retake the quiz if youdon'tpass the first time.

Youll be able to choose from two lending options depending on your personal preference:

Conservative

Balanced

You only lend to creditworthy businesses that have been assessed as lower risk

This option has a lower projected return, with a lower estimated bad debt rate

You lend to the full range of creditworthy businesses to build a balanced portfolio

This option has a higher projected return, with a higher estimated bad debt rate

Once you have transferred funds into your Funding Circle account and turned on your lending option, you will begin to lend your funds to businesses.

You will place an order at a minimum of 10, up to a maximum of 0.5% of your portfolio to each business. Once each loan has been filled with orders from investors, your order will become a loan part.

The minimum amount you can lend to a business is 10, so if you have less than 2,000 in your account you will lend 10 to each business.

You will receive a monthly payment of either interest, or principal and interest, from each of your loan parts. While you keep lending active on your account, these repayments will then be lent out to more borrowers, compounding your interest and maximising your return.

You can change your lending option, or turn off new lending, at any time by going to the Lending settings tab in your account. Simply select the option youd prefer and click save. Please note this will only affect new lending on your account.

Remember, by lending to businesses your capital is at risk.

When you first start lending with Funding Circle you will be asked to select an investor profile. Those who classify themselves as an Everyday Investor will be required to limit their lending to 10% of their investable assets in their first year of using the platform. Following that there is no limit. Those investors who classify themselves as Sophisticated or High Net Worth or who lend through a limited company, will not need to agree to any maximum investment.

To give you the best chance of earning a stable return your lending will be spread across many businesses. No more than 0.5% of your portfolio (subject to a minimum of 10) will be lent to a single business.

The most you will lend to any single business is 2,000, although if you have a larger account your lending to each business will be split into smaller parts no larger than 100 each.

For example, an investor with an account size of 100,000 will lend 500 (0.5%) to each business. That 500 will be split into five loan parts of 100 each. This makes them easier to sell to other investors if you want to access your money early.

Some loan parts made before 18th September 2017 were larger than 100. Therefore there may be instances where you buy loan parts larger than 100 from other investors, providing that loan part is no larger than 0.5% of your portfolio.

At Funding Circle investors lend money directly to small and medium sized businesses. The business must make repayments each month to repay investors.

Funding Circle typically takes personal guarantees, and in some instances asset security,from shareholders on loans to provide further comfort to investors that in the event that the borrower is unable to make repayments on the loan, there is security which can be enforced.

At Funding Circle, we can take three forms of security: a shareholders personal guarantee, a charge across all a companys assets (an all asset security agreement/a debenture), or a security on a specific asset (asset backed security). The security taken is dependent on a range of factors including the size and purpose of the loan.

As with all guarantees or security, Funding Circle cannot guarantee that all your loan will be recovered in the event of default of a borrower.

Personal guarantees

This form of security is a guarantee from the Shareholder/s of the business taking the loan out. In this document, the Shareholders personally guarantee that if their businesscan'trepay the loan, they will personally repay it. Funding CircleTrustee Limited, a wholly owned subsidiary of Funding Circle Limited, will pursue the guarantors if the business cannot repay the loan for whatever reason. It is important to remember, that even with a personal guarantee, your capital is at risk.

Businesses that refuse to give personal guarantees when required by us cannot borrow through Funding Circle.

Whether a loan has a personal guarantee or another form of security, or not, does not affect the risk band of a business. A personal guarantee may give additional comfort to investors, however, no loans should be considered zero risk. If a loan goes into default, Funding CircleTrustee Limitedwill act to recover the maximum proceeds possible, which may result in action being taken through the Courts. The timeframes for recoveries will vary on a case by case basis for loans with personal guarantees or asset security.

All asset security agreement

For some larger loans, Funding Circle will typically put in place an all asset security agreement. This is an agreement with the borrower that if the borrower defaults, some or all of these assets in the business can be sold or liquidated in order to repay the loan. This security is sometimes called a fixed and floating charge because it is a general hold over all the businesss assets, rather than one in particular. Funding CircleTrustee Limited, a wholly owned subsidiary of Funding Circle Limited, holds the security on behalf of investor and registers charges at Companies House. This prevents other funders gaining priority security over the assets in question if they register security at a later date. Please note that, in certain circumstances, other creditors that are already lending to the business may have priority security over Funding Circle investors; if this is the case it is noted in the "Asset Security" section on the Financial Summary tab on a loan request page.

Specific asset security - asset owned

Asset backed security is control of a specific asset that the loan is being used to buy e.g. a coach, machinery, agricultural equipment etc. When a business is borrowing to purchase a large asset, Funding Circle Asset Finance, a wholly owned subsidiary of Funding Circle Limited, will own and hold title to the assets and lease these to the borrower through a hire purchase agreement at a total cost of 1 per quarter. If the borrower cannot repay the loan for whatever reason, Funding Circle Asset Finance will take control of the asset it owns and sell it to raise funds to pay to investors. Funding Circle Asset Finance takes ownership of assets, rather than registering a charge at Companies House, to protect Funding Circle investors from losing a priority hold over the assets as soon as the asset enters the businesss use. This type of security is required when a business is purchasing a specific asset with a value over 75,000. Once the business has fully repaid the loan they can purchase the asset for a nominal sum of 10, referred to as a "conditional sale."

Specific asset security asset charge

In certain circumstances, businesses may prefer to hold title and ownership of the asset, or may be looking to secure finance against a particular asset they already own. In these instances, Funding Circle will facilitate loans secured with a charge over the specific asset - a "Chattels mortgage" - rather than Funding Circle Asset Finance holding title. Funding Circle will register these charges at Companies House and secure waivers from banks or existing charge-holders where required.

Property security

As in all asset security, Funding CircleTrustee Limited, a wholly owned subsidiary of Funding Circle Limited, will hold the security on behalf of the lender and registers the charge at Companies House. This prevents other creditors from gaining priority security over the assets in question if they register security at a later date. Property security will also be registered at the Land Registry. We will provide investors with a list of property assets in the business over which security will fall in the "Additional documents" section on the Financial Summary tab on loan request pages.

If you would like help, please have a look at our FAQ section as we may have an answer for your question there.

If you still need to get in touch you can send us an email. We welcome any thoughts, comments or questions you have and aim to reply within 2 working days. If your query is urgent, you can also call us on 0207 401 9111 from 9am to 6pm, Monday to Friday (excluding public holidays).

You can write to us atFunding Circle Ltd,71 Queen Victoria Street, London, EC4V 4AY

Please note we cannot take loan applications by phone or post.

Due to regulatory restrictions, we will not be able to transfer any existing loan parts you own into a Funding Circle ISA account

If you have no outstanding loan parts (including bad debt), and have transferred out all available funds you can close your account at any time. Simply contact us through the Funding Circle website here .

Every business you lend to must first pass our robust assessment process. This process has 3 key pillars:

1. Policy criteria

We receive thousands of applications from all types of small businesses. To help our team focus on the right type of application, we have criteria in place that filters out businesses who have a low likelihood of being approved. To be eligible for a loan a business must have:

A minimum of 2 years trading history

At least 1 year of filed or formally prepared accounts

No County Court Judgements (CCJs) registered in the last 12 months, and no outstanding CCJs larger than 1000 in the last year

UK ownership and resident directors: majority that are UK resident

2. Statistical credit models

Our proprietary credit model uses thousands of data points to assess the creditworthiness of every business that applies. It uses publicly available information, credit bureau data and our own historical data of loan applications and performance.

Successful applications are then given a risk band from A+ to E (where A+ is the lowest risk), which is then used to help determine the interest rate theyll pay. The interest rates payable by borrowers range from 1.9% to 21.9%.

3. Expert judgement

Over 200 people work in our global credit assessment team, combining decades of experience from some of the worlds leading financial institutions. They use our credit model and financials relating to the business and company directors to manually assess each application. This allows the team to raise and clarify any potential questions before a loan is approved.

The combination of these 3 pillars enable us to create a full picture of a borrowers financial health, so we can make accurate credit decisions and you can earn a stable return.Please note there may be some differences in the information we require from different types of borrower. For example small businesses might not file Profit and Loss information.

Property finance loans are assessed differently to small business loans. You can find out more in our Property finance loan key features and risks document.

Yes, you can see your orders and loan parts in the My Portfolio section of your Funding Circle account. You will be able to see the key loan details on the My Portfolio page and some further detail if you click onto an individual loan. If you want to find out when the loan was originally assessed you can view the loan repayment schedule by clicking onto the loan title; the date of first repayment displayed will be one month after the loan was first funded. The loan will have been assessed within 1 month of being funded. You can also view the loan term and number of repayments remaining for each loan part you hold via the My Portfolio page.

You can change your contact details in the My Account section of the website.

The new selling tool has been launched

If you already had a sell request in place you will have been automatically switched over to the new tool. You do not need to do anything.

Any new sale requests made from 2nd December 2019 onwards will take place under the new tool.

How will the new secondary market / selling tool work?

The new selling tool will cycle through all investors wishing to sell loan parts as many times as possible within a 120 day period.

In each cycle, every investor will sell a small portion of their portfolio or at least one loan part. The cycle will run continuously through all investors currently wishing to sell.

This means every investor selling loan parts will begin to receive some funds back faster and more regularly.

The time it takes to access all the fundsyou'verequested will depend on the amount you receive back in repayments, the amount youre selling, the number of loan parts youre looking to sell, and the demand to buy loans from other investors at the time.

The length of each cycle will also vary as it depends on demand from other investors at the time.

After 120 days if you have any loans parts that havent sold they will be delisted. At this point you will receive an email informing you of the amount of the total funds that have been made available through selling loans and repayments. If you'd like to access more of your funds you can log back into your account and request a new sale.

You can amend the amount you want to request by cancelling the sale and requesting a new amount. You will then rejoin the other investors selling straight away.

The tool will work the same way for both Classic and ISA accounts. As is the case currently, you cannot transfers funds or loan parts directly between a Classic and ISA account.

How long will it take to sell loans?

The time it takes to access all the fundsyou'verequested will depend on the amount you receive back in repayments, the amount youre selling, the number of loan parts youre looking to sell, and the demand to buy loans from other investors at the time. This means we are unable to provide any timeframes.

The length of each cycle will also vary as it depends on demand from other investors at the time.

How does the transfer payment work?

The 1.25% transfer payment is a fixed amount applied automatically to all loan part sales. It is calculated on the outstanding principal of the loan part at the time of sale. For example, a 20 loan part is sold for 19.75 (and, as with the current tool, the selling investor would also receive any interest owed on that loan part since the last monthly repayment up to the point of sale).

100% of the transfer payment goes to the investor who is buying the loan part.

The transfer payment is applied when the loan part is sold. It is not paid upfront when you make the sale request and is only applied to loans that are sold successfully.

This brings us in line with other lending platforms, although in our case, Funding Circle does not receive any fees from any loan part sale.

Why are these changes happening?

As you may have experienced, selling times have increased in recent months.

Shifts in liquidity (i.e. the number of sellers and buyers of loan parts on the secondary market) is a natural part of lending, and accessing funds in this way is not guaranteed as it is contingent on there being investors available to buy loan parts from you.

However, having conducted a review, the package of changes we are making are in the best interests of the vast majority of investors and will provide an improved overall service. The changes mean every investor selling loan parts will begin to receive some funds back faster and more regularly.

Funding Circle is a robust, growing business; following last years Initial Public Offering we are the best-capitalised platform in the UK. We have helped more businesses this year than ever before and our large, diversified community of investors have earned over 300m in net interest, while loans taken out since 2012 are on track to deliver 4 - 7% annually (past performance is not an indication of future performance and capital is at risk).

Weve updated our terms to reflect the recent changes to our investor product. Specifically, we have made these changes to reflect:

the FCAs new rules for peer-to-peer platforms which come into effect on 9th December 2019. Under these new rules, peer-to-peer platforms must ask their new investors to select an investor profile and complete an appropriateness assessment before they can invest on the platform;

the implementation of our new selling tool which changes how loan parts are sold on the secondary market;

the introduction of a 1.25% transfer payment which is applied automatically to all loan part sales to another investor on the secondary market, to the benefit of the buyers of those loan parts; and

other smaller changes which do not have an impact on our investor product offering. We have also made some small, related changes to the Loan Conditions.

The full Terms and Conditions can be found at: https://www.fundingcircle.com/uk/legal/investor-terms-and-conditions/

Selling loans is not instant and depends on a number of factors, including the number of sellers and buyers of loan parts on the secondary market.

The time taken to sell loan parts can fluctuate and you may find that loan parts take longer or shorter to sell than you have experienced previously. Unfortunately, we cannot guarantee the sale of loan parts as this is subject to demand.

As the number of buyers and sellers can change over time, we are unable to provide any timeframe for when we expect individual loan requests to complete.

You can find out more about the recent changes we have made to the selling tool, and provide us with any feedback, here.

*This data is updated weekly, Wednesday PM

You are not able to withdraw individual loan parts that have been put up for sale. However, you are able to stop the selling process at any time via the Access Funds page on your account.

When selling loan parts, a 1.25% transfer payment is deducted and passed onto the buyer of the loan part at the point of sale. For example, if you sell a 20 loan part, you'll receive 19.75 (plus any interest owed since the last repayment).

This should take between 4-8 weeks. This depends largely on the speed of the process solicitors need to go through in order to obtain the property title and security.

You can transfer any available funds by using the Transfer money tab, found along the top of your screen when logged in to your account.

All transfers must be made to a UK bank account held in your name. You can add up to five separate bank accounts by following the instructions on screen.

If we are unable to automatically verify your bank details, we may ask you to send us further documentation, such as a recent bank statement, so it is important to set up a bank account before you need to make your first withdrawal.

You can find our guide for accessing online bank statements for most of the current account providers in the UK here.

Once a bank account has been added you can withdraw funds quickly and easily to the same account each time, without the need to enter your details.

If you have money lent to businesses, onceyou'vesold these loan parts to other investors you can withdraw the funds using the same process.

Transfers can take between 1 - 3 working days.

Lending through Funding Circle is not covered by the Financial Services Compensation Scheme.

As an FCA authorised business we are required to have a back-up servicing arrangement in place. This means that in the unlikely event that Funding Circle ceases to trade, the back-up service provider would take our place in operationally managing and administering existing loan contracts between investors and borrowers. It would continue to receive loan repayments from borrowers, and to process and distribute these payments to you.

Our current back-up service provider is also authorised by HMRC as an ISA Manager, and would be able to take over the administration of Funding Circle ISA accounts. This means loans held within a Funding Circle ISA would keep their tax-free benefits.

Investor funds that have not been lent to borrowers are held by us in segregated client money bank accounts with Barclays Bank plc and National Westminster Bank. These funds are completely separate from Funding Circles own money and we cannot use client money for our own business purposes. These funds do not form part of our assets which means that they would not be available to creditors in the event of our insolvency. Client funds are ring-fenced in a separate bank account and held on trust for investors in accordance with the FCAs Client Money (CASS) Rules.

You can only withdraw funds to a verified nominated bank account. If you have not set this up please do so now so that you are ready to withdraw when needed. You can usually do this quickly by logging into your account. For accounts thatcan'tbe verified online, well ask for some extra information.

Upcoming website maintenance

To help us provide you with a smooth and fast experience, we occasionally need to upgrade our website. Our upcoming scheduled maintenance session is:

Friday 4th January 2019 at 22:00 BST, for approximately 12 hours.

How will my account be affected?

Youwon'tbe able to access your account while the site is under maintenance. You may notice an increase in loan parts marked as processing when the site comes back online. Well work to clear these as quickly as possible once weve finished maintenance.

When you lend through Funding Circle, your money is matched to loans in your portfolio, which have a duration of up to 5 years. As a result, it is important to treat lending as an investment, not a savings account, and investors should only lend money they are comfortable with being invested for up to five years.

Investors are able to access their funds in two ways:

Switch lending off. Businesses pay back interest and principal each month, so by simply switching lending off, you will receive approximately 3-5% of your outstanding portfolio after the first month and approximately 30-40% of your money back after the first 12 months.*

List loan parts for sale. Our selling tool matches investors looking to sell loan parts with investors looking to buy. However, this is subject to demand from other investors and selling is not guaranteed. When a loan part is sold, a 1.25% transfer payment is paid to the buyer by the seller. For example, a 20 loan part is sold for 19.75.

You can only sell active loans with no credit issues, and not in the last month of their term. Any loans not sold after 120 days will be delisted and youll need to make a new request to sell them.

*These figures are based on the average repayment rate for all loans outstanding on the 1st of September 2019. As you are lending to your own individual portfolio of loans, your actual repayment rate may differ.

On 30th November 2017 we started rolling out the ISA account to all current investors. This means soon you will be able to earn attractive, stable returns tax-free.

How will the ISA account work?

The Funding Circle ISA will work just like your existing Funding Circle account, while also providing you with:

A boost to your earning power the interest you earn with an ISA is tax-free. As an example, if a higher rate taxpayer lends 20,000 through the Funding Circle ISA and earns a one-year return of 7.2* after fees and bad debt, their post-tax earnings after one year could increase from 864 to 1,440.

Flexibilitythe ISA account is a flexi-ISA. This means you can withdraw any available funds without affecting your annual 20,000 ISA subscription limit, providing you transfer them back in by the end of the tax year.

A simple investment experiencecreating an ISA account takes just a few minutes, and can be opened from your existing Funding Circle account using the same login details. Once opened, choose one of our two lending options and start lending.

An easy way to build a well-diversified portfoliowe suggest lending 2,000 or more, so you can spread your funds across at least 100 businesses for a more stable return. If you would like to start with less, we are introducing an initial minimum card transfer of 1,000 when opening an ISA account or a new Classic account.

No fees to access your money as with your existing Funding Circle account there are no fees for selling your loans

As part of this process were also renaming existing Funding Circle accounts as the Classic account. Remember, by lending to businesses your capital is at risk, while tax rules and relief can change depending on your personal circumstances.

Providing every investor with the best possible lending experience

Based on the conversations we have had with investors, we expect the ISA to be popular. To manage this interest in the fairest way, and to ensure there are enough lending opportunities on the platform for all investors to continue earning attractive, stable returns,we will be opening up the ISA Account to all current investors (those who created an account before 23rd November) in the following order:

Investors who are actively lending (have lent to a business since 1st May 2017)

Investors not actively lending but who have previously transferred in funds

Investors who have not previously transferred in funds

New investors and those who have opened a Classic account after 23rd November 2017

We will open the ISA to each group of investors in the order their account was created. We will keep you updated on our progress over the next few months.

Well email you when your ISA is ready to be opened

Onceyou'vereceived your email confirming you can now open your ISA, youll be able to login to your account through our website and create an ISA account in a few easy steps, subject to eligibility criteria:

To help manage demand, initially youwon'tbe able to transfer any existing ISA subscriptions you hold to your ISA account. You will be able to transfer your Funding Circle ISA to another ISA provider, although its important to remember that loan parts thatcan'tbe soldwon'tbe transferred and will no longer be eligible for tax-free interest.

Once all current investors have had an opportunity to create an account, we will launch the ISA to new investors. Following this, we will start to rollout the ability for you to transfer in existing ISA subscriptions.

Although you can manage both an ISA account and a Classic account using the same login, its important to remember they are separate accounts that will lend to a separate portfolio of loans.

Transferring loan parts from your Classic account to your ISA account

Due to regulatory restrictions, you are unable to transfer loan parts directly from your Classic account to your ISA account. However you can sell your loans quickly and easily to other investors, providing theyaren'tlate or experiencing any credit issues, before withdrawing your funds to a UK bank account and then transferring them to your ISA.

Were pleased to be able to provide you for the first time with attractive, stable returns tax-free. You can find out more about the ISA account, and register your interest if you are not currently lending through Funding Circle, here. More information can also be found in our FAQs. If you have any questions please get in touch.

Enjoy lending,

The Funding Circle team

*The projected return is an estimate of the annual return, after fees and bad debts, that a diversified investor could earn by lending through the Balanced lending option as of 22nd January, 2017. You can see how the return is calculated here. Your actual return may be higher or lower, and by lending to businesses your capital is at risk.

When lending to businesses, there will always be some who are unable to fully repay their loans. We call this bad debt, and when this happens our in-house Collections and Recoveries team will place the loan into default. They will then act in investors best interests to pursue the outstanding debt and get the best possible outcome for investors.

Currently, loans are defaulted on a Thursday. We want to allow our Collections and Recoveries team to commence formal recovery procedures as quickly as possible, and from Monday 2nd July 2018 we will default loans as and when it is necessary to do so. This means a loan may be defaulted at any point throughout the week.

Finding more information about your defaulted loans

As part of this change, we will no longer be publishing a weekly list of all defaulted loans. When a loan that you are lending to is placed into bad debt, you will be able to find:

Your total amount of bad debt - found in the losses section of your Earnings Summary

Which of your loan parts are in bad debt - found in your loan parts report, downloadable from the My Loan Parts section

More information on your loan parts in bad debt - found in the Recent loan comments section

Please be advised that we have our quarterly company wide meeting on Friday 18th October. As a result, our Investor Support Team will be unavailable from 14:30pm.

You are still able to send us an email at [email protected] - any messages will be returned after the weekend.

We apologise for any inconvenience this may cause.

As soon as your listing is 100% funded, it will close and we will send you a confirmation email. As long as your loan is fully funded before 3pm on any working day, we will pay the loan into your designated business bank account the same day. Funds can take up to 3 days to reach your account.

If you want to transfer your Funding Circle ISA to another provider, you must first sell your loans. Remember youcan'tsell loans that are late or that are experiencing credit issues.

Your ISA provider will be able to give you more details on how to transfer the available funds in your Funding Circle ISA

Any loans thatcan'tbe sold will be transferred over to a new Classic account, and will no longer be eligible for tax-free interest

You may need to give your unique reference number to the new ISA provider. This can be found under the transfers tab of your ISA under the section "View bank details".

The address that the request will need to be sent to is:

Funding Circle

71 Queen Victoria Street

London

EC4V 4AY

To protect other investors, there are some restrictions on which loan parts you can sell. Youcan'tsell loan parts:

Which have had their risk band removed (for example when a CCJ has been registered against the business)

Have a processing status. Loans have this status for the first 5 days a repayment is overdue; this is often caused by a delay with the direct debit being processed and will be resolved within a few days. You may see an increase in processing repayments following bank holidays as the direct debit payments take longer to process.

That are late (have currently missed a repayment) or are in default

That have one payment remaining

These restrictions are sometimes temporary. If a business gets back on track with their repayments and there are no remaining issues, we can reinstate the risk band and the loan part can be sold.

Please note that if a loan part you have listed for sale enters one of the above statues before it is sold it will be removed from the sale queue.

When you buy a loan part from another investor, you will pay the seller for the outstanding loan amount plus any interest that has accrued since the last repayment. This accrued interest will be deducted from your interest earnings and show as negative interest. Your Summary page will show these cash movements in and out of your account.On the next repayment date for that loan part, you will receive the entire accrued interest for that month. You will then be left with the difference between the negative interest and the interest for the full month. This means that both the buyer and seller receive interest for each day they held the loan part for.

Our fee structure is simple and transparent. There are no hidden charges and extras like monitoring fees, review fees, security fees, or early repayment fees. If, and only if, you accept a loan offer the following one-off charge will apply*:

Loan type

Loan term

Fee

Unsecured and secured business loans

6 months - 1 year

0.9%- 4.9%

2 - 3 years

2.9%- 6%

4 - 5 years

4.5%- 6%

Asset finance

6 months - 5 years

5%**

The table above outlines our fee structure for business loans.

There is no fee to submit an application for review and no obligation to accept your loan offer. Fees are based on your total loan amount and are deducted from the loan proceeds before being paid to you. You can repay early for free and only pay interest for the time you borrow.

We also charge a 1% annual servicing fee on the amount outstanding on any loan. This is included in the interest rate payable by the borrower and taken directly from the loan repayments made by borrowers. The servicing fee covers the costs of running the website and maintaining the loans.

* A higher completion fee may be charged for applications managed by introducers. The fee charged may be added to the loan amount borrowed. You can request what this fee is from the agent or introducer acting on your behalf.

** Includes 100 finance arrangement charge from Funding Circle Asset Finance. Excludes quarterly instalments of 1 per quarter and Final Payment charge of 10 payable to Funding Circle Asset Finance on the Purchase Completion date once the loan to Funding Circle investors has been fully repaid.

Further to the above, an administration fee of 15% of arrears may be applied to any repayments that are more than 7 days late.

If your loan is placed into default, we may charge an additional collections charge of up to 15% of the outstanding loan amount at the time of default. Read more here.

We value your business and want you to be entirely satisfied with the service you receive. Anycomplaintsare taken very seriously and will be escalated internally if required. Should you have any cause forcomplaint, pleasecontact usin the first instance and a member of the relevant team will acknowledge yourcomplaintand investigate. Where it is necessary this will be escalated to a manager in the team who will send a full response within 5 working days.

Funding Circle contact details:

Email: [email protected]

Telephone: 0207 401 9111

If you remain dissatisfied after this, please read our official complaints procedure, which you will find attached here. Simply click on "complaints procedure pdf" at the bottom of the page.

We always seek to resolvecomplaintsinternally, but there may be instances when we cannot reach an agreeable solution. After following all of the steps in the official complaints procedure, you have the right to refer yourcomplaintto the Financial Ombudsman Service if you are an eligible complainant.

The Financial Ombudsman contact details:

Address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR

Email: [email protected]

Website: www.financial-ombudsman.org.uk

Telephone: 0800 023 4567 or 0300 123 9123

FOS consumer leaflet: https://www.financial-ombudsman.org.uk/publications/consumer-leaflet.htm

Funding Circle collects all monthly interest and repayments from borrowers which are then transferred into your Funding Circle investor account. The repayments are usually available for relending within 1 - 2 working days. You can review the status of a repayment on the My Summary page - if the status is "Processing" this means that Funding Circle is processing the repayment, and the status will return to "Live" as soon as a successful repayment has been made and credited to your investor account.

In some cases businesses will fail to keep up with their repayments. You can view the number of late payments on our statistics page.

If you wish to change the details for your repayments please contact us here.

You can transfer money into your Funding Circle account in two ways:Debit card If you are transferring in money for the first time, follow the onscreen instructions to type in your card details and the amount you want to credit your account with. Funds will be available immediately for lending.

Bank Transfer You can transfer money directly from your own bank either by internet or telephone banking, or in a bank branch into your Funding Circle investor account. Details of how to do this can be found in the Transfer money section of your account . Payments made by Faster Payments will usually be available for lending in 1-2 working days, or 3-5 working days if made by a BACS transfer.

Many credit card lenders treat deposits as a cash advance (incurring high fees). Therefore we have removed the ability to use a credit card to deposit funds into your Funding Circle account.Further details of how to make these transfers can be found in the Transfer Money section of your account.

Remember, if you have lending active on your account, any funds you transfer in will be automatically lent out to businesses in-line with your chosen lending option.

At present you cannot lend via a SIPP on Funding Circle. We are working hard to allow you to do this in the near future.

You can create an ISA account in minutes by selecting open an ISA on the invest your money page.

If you already lend through a Classic account, you can open an ISA by logging into your account and following the instructions on your Summary page

Non-limited companies include professionals such as barristers, doctors and veterinary practitioners as well other business types such as farmers, builders, electricians and plumbers. They can look like limited companies, by having many employees for example, but may have been formed as a non-limited company or a general partnership.

Transfers into an ISA account operate in the same way as your Classic account, either via a debit card or bank transfer

In order to help you diversify and achieve a more stable return, we have introduced an initial minimum card deposit of 1,000 when opening an ISA or new Classic account

You can also transfer any existing ISAs you hold over to your Funding Circle ISA, subject to any restrictions set by your current provider.This means that any funds you hold in a Cash, Stocks & Shares, or Innovative Finance ISA can be transferred to your Funding Circle ISA without affecting your current tax year ISA subscription, unless you are transferring any funds you have used to subscribe to an ISA this tax year.

More information on how to transfer an existing ISA can be found here.

https://www.fundingcircle.com/blog/2018/05/isa-transfers-are-open/

Only transfers of new funds, that are not already held within an existing ISA, into your Funding Circle ISA will count towards your subscription limit

All other payments, including interest and principal payments, will not count towards your limit

A loan is downgraded to have no risk band if an event has occurred on that loan. These events could include Funding Circle receiving notice that a business is in administration, has ceased trading, is in liquidation, insolvency or some other event has occurred to alter the original risk band classification. Comments will be posted in the Summary section of the website if a loan has been downgraded to have no risk band. Many loans continue to repay to investors when an event has occurred, and this is done as a precautionary measure. Loan parts in loans where no risk band has been assigned currently cannot be sold to other investors.

When will I receive my John Lewis vouchers?

We are currently running the analysis of the promotion and are aiming to send out prizes by the end of July - if this changes, well let you know.

What did I have to do to qualify for a prize?

You needed to register for the promotion via your account.

Well now look at the amount added to your account between 21st of February and 21st of March 2019, minus any withdrawals. This will determine the vouchers youll qualify for. If you have both ISA and Classic accounts, well look at the amount added between them.

You needed to have lending switched on and have kept those funds lent out until 21st of June 2019. If you withdrew funds (from either your Classic or ISA account) you may receive a lower voucher amount or no longer qualify.

For full terms and conditions click here.

What should I do ifI'mnot sure I qualified?

If you have qualified, we'll then send your vouchers out to your registered email address. Were aiming to do this by the end of July.

If youdon'thear from us by the end of July but believe you have qualified, you can get in touch via [email protected] and we will check for you.

We have taken the decision to focus on our core small business lending product, which will allow us to build on our leadership position in the markets we operate in.

It can take up to 2 working days for the Funding Circle credit assessment team to review your application to borrow. They will get in touch with you if they have any further questions about your loan application.

If you referred your friend to Funding Circle:

The Amazon.co.uk Gift Card will be paid to eligible referrers and referred friends a maximum of three months after the money was transferred. This allows time for all conditions of the offer to be met, and for us to carry out the analysis of eligible members.

Unfortunately not. You must have signed up using an existing investors unique referral link in order to be eligible.

Yes, we do! The app can be downloaded for free from the Google Play store.

The Android app will allow you to keep track of your Funding Circle account while you are on the go. It will offer you fast, secure access to your portfolio, including fingerprint sign-in functionality.

In the first version of our new Android app, you will be able to check how your portfolio is performing and view your account summary.

For now, if you need to add funds to your account or change your lending options, please continue to do so by using your desktop device. Well be adding more functionality in the future, and as always we appreciate your feedback to make the app as simple and easy to use as possible!

If you have any questions, pleasedon'thesitate to get in touch.

Each month you receive a principal payment and an interest payment from the borrower, which can be seen on your statements.

Principal is the money that is still lent out to the borrower on the loan part. Each month the borrower repays a portion of the principal outstanding on the loan part, and pays you interest on top. The sum of these two payments is typically equal each month, meaning each month you get paid a set amount by each borrower. The total amount you receive each month may be marginally different due to the rounding of repayments. This occurs because we round down interest and principal repayments to the nearest penny until a full penny has been accumulated at which point it is paid out to the investor.

All repayment schedules at Funding Circle are calculated up-front when the borrower accepts a loan. For example if an investor were to lend 920 to a borrower, on a one year loan, at a rate of 4.7% per year the principal and interest payments due would be the same as those below.

There is a 1% annual servicing fee for loan parts, which is included in the interest rate charged on the loan and taken directly from the loan repayments made by borrowers. This is based on the principal amount outstanding on the loan and covers the costs of running the website and maintaining the loans. This is also calculated up-front and has been included in the example below.

Since each month some of your principal is repaid you will need to continue re-lending out your repayments to continue earning interest on the re-paid principal. If you are using Autobid, it will automatically re-lend any repayments you receive on loan requests that match your criteria.

Repayment Example: 920 loan part earning 4.7% interest on a 1 year loan

Period

Principal payment ()

Interest payment ()

Total payment()

Servicing fee ()

Principal left (BoP) ()

Principal left (EoP) ()

Annual interest (%)

1

75.02

3.60

78.62

0.77

920.00

844.98

4.7%

2

75.33

3.31

78.64

0.71

844.98

769.65

4.7%

3

75.62

3.01

78.63

0.64

769.65

694.03

4.7%

4

75.91

2.72

78.63

0.58

694.03

618.12

4.7%

5

76.21

2.42

78.63

0.51

618.12

541.91

4.7%

6

76.51

2.12

78.63

0.45

541.91

465.40

4.7%

7

76.81

1.83

78.64

0.39

465.40

388.59

4.7%

8

77.11

1.52

78.63

0.32

388.59

311.48

4.7%

9

77.41

1.22

78.63

0.26

311.48

234.07

4.7%

10

77.72

0.92

78.64

0.20

234.07

156.35

4.7%

11

78.02

0.61

78.63

0.13

156.35

78.33

4.7%

12

78.33

0.30

78.63

0.06

78.33

0.00

4.7%

While you keep lending active on your account, you will lend your repayments out to more businesses, or buy loan parts from other investors. Pausing lending will stop you from lending any more money to businesses.

You will not be able to move funds directly between your Funding Circle accounts. Funds must be withdrawn to a nominated bank account, before being transferred into your Funding Circle ISA

Any funds held in loan parts will need to be sold before you are able to withdraw them. For more details on selling your loan parts, please see here

Funding Circle are members of the Credit Services Association, an industry trade body which provides guidance to ensure customers are treated fairly and ethically. The Credit Services Association represents over 400 businesses, approximately 90% of the industry.

You can read the Credit Services Association code of conduct here:

http://www.csa-uk.com/assets/documents/compliance-and-guidance/code_of_practice.pdf

At the point a loan offer is made to a business, the loan will be randomly assigned as a whole or partial loan.

Whole loans will be listed for a fixed amount of time for investors to purchase. If they are not funded during this period they will be automatically listed on the marketplace as a partial loan, where retail investors can offer to lend to them.

Currently whole loans will not be able to be sold on the secondary market.

Returns from lending at Funding Circle are paid without any tax being deducted. If you are lending as an individual you should declare any interest and gains to HM Revenue & Customs (HMRC) on a self-assessment tax return or inform your local tax office.

Funding Circle make available to all investors Transaction Statements and an Annual Tax Statement, splitting out the relevant amounts for your tax return. Each is available for download in the My Statements section of My Account.

Please note, we are unable to provide any further information about tax other than what is provided in our tax section.The wording below is for indicative purposes only, and does not constitute tax advice. If you are in any doubt about your tax position you should speak to your accountant or make an appointment to speak to an adviser at an HMRC enquiry centre. This information is only relevant to UK tax resident individuals holding loans directly as legal and beneficial owner.

Taxation of interest earnings

Your returns are taxable as income and you will need to declare these to HMRC. For Tax Returns from and including:

the 2015/16 tax year, you will be able to deduct eligible bad debt; and

the 2016/17 tax year, you will have the benefit of a personal savings allowance.

Unless an exemption or allowance applies, interest payable to investors on money loaned is charged to income tax in the tax year of receipt. For example, interest received on 31 December 2015 is received in and taxable for the tax year 2015/16.

If you already complete a Tax Return you will need to ensure the appropriate interest is shown on the return.

If you have not previously completed Tax Returns you will be required to do so if you have a tax liability and should contact your local Tax Office, who will issue the appropriate Tax Return for your completion or adjust your Pay As You Earn (PAYE) tax code accordingly.

For further details, please see HMRC guidance here.

In a small number of cases, where investors are lending to a large number of borrowers they could be deemed to be carrying on a trade of money lending. See HMRC guidance by clicking here. If you are in any doubt about whether you are carrying on a trade of money lending, you should contact your accountant or HMRC directly.

The Annual Tax Statement shows interest payments made to you.

Ability to Offset Bad Debt

From 6 April 2016, a new bad debt relief is available for individuals lending through P2P platforms in respect of P2P loans made by you which have become irrecoverable.

If relief has been claimed and there are later recoveries on the loan treated as irrecoverable, such recoveries will be taxed as additional interest received by you.

If you have suffered bad debts on loans between 6 April 2015 and 5 April 2016, you will be able to claim for relief on losses arising on loans by setting them against interest received in the same tax year from any other eligible loan.

From 6 April 2016, any irrecoverable loans will be set against the interest received during the tax year from other loans made using the same P2P platform.

If all bad debt relief has not been used against loans made on the same platform, it can be used against P2P loans on a different platform this will need to be claimed in your tax return.

Relief can be carried forward for a maximum of 4 years.

For loans that become irrecoverable on or after 6 April 2016, a loan that would have been eligible for capital gains relief as a capital loss under TCGA 1992 will no longer be eligible for that relief. A loan that becomes irrecoverable between 6 April 2015 and 5 April 2016 that would have been eligible for relief as a capital loss under TCGA 1992 may still be eligible for capital gains relief, but only if no claim is made for P2P income tax relief for the loss on the loan.

For more information and examples of how the relief should be claimed, see https://www.gov.uk/government/publications/income-tax-relief-for-ir....

A further explanation of the relief and explanation of how to claim it can be found here.

Taxation on sales of loan parts for a premium or discount

Some investors may choose to redeem their loan parts before the maturity date by transferring their loan parts to other investors. Any such transfers by the original lender are unlikely to result in capital gains or losses. Any such transfers by lenders who have acquired their loans on the secondary market may result in capital gains or losses. We recommend that you speak to your accountants or tax advisors for detailed advice on any such transfers.

Personal Savings Allowance

From 6 April 2016, the first 1,000 of interest for basic rate taxpayers and the first 500 of interest for higher rate taxpayers will be free of income tax. This applies to interest earned through Funding Circle as well as through other traditional savings accounts.

The personal savings allowance is not available to additional rate taxpayers (i.e. those with a taxable income in excess of 150,000 in a tax year).

If you already complete a Tax Return you will pay any tax on interest earnings through that system.

For further details, please see HMRC guidance here.

Taxation of cashback

In certain circumstances Funding Circle offers cashback to investors. The cashback is considered an inducement to enter into a transaction and is received as a direct consequence of having made the loan.

Cashback promotions are not normally treated as taxable income.