The document discusses peer-to-peer lending as a solution for small businesses struggling to access financing. It provides an overview of Funding Circle, a peer-to-peer lending platform that has facilitated over £165 million in loans to more than 3,000 small businesses since 2010. The document outlines Funding Circle's application process, loan terms, eligibility criteria, and fees. It also shares a case study of a property company that obtained a £300,000 loan through 4576 lenders on the Funding Circle platform at an interest rate of 9.98%.

1. The rise of peer-to-peer lending:
A chance to ask Funding Circle

2. Bailey Kursar
Account Manager,
Funding Options
• Part of a team that helps businesses access a range of
lenders with one application
• Works with the ICAEW and Forum of Private Business
• Find out more at www.fundingoptions.com or call
0845 366 4199

3. Laura McMullen
Responsible for all introducer relationships
at Funding Circle
• Has helped Funding Circle grow over the last two years
• Since launching in August 2010, Funding Circle has
facilitated loans of £165 million to over 3,000 SMEs
• Find out more at www.fundingcircle.com

4. What we’re going to cover
①
Context around SME finance and trends in lending
②
What is peer-to-peer?
③
How can Funding Circle help?
④
Q&A

5. What’s the main reason you think
businesses aren’t getting finance?
?

6. Businesses don’t
think they will get
approval
Business
uncertainty
Waiting for the
economy to improve
Businesses don’t
know how or where
to apply
By approaching the bank
their existing facilities
may be reduced
Confusing array of
finance products

7. Businesses don’t
know how or where
to apply
“Not even clear how much they want to borrow
and what it is for”
“Many do not have adequate business plans or
accounts”

8. Confusing array of
finance products

9. 7%
of SMEs wanted to apply for a loan or overdraft but something
had stopped them, with discouragement and issues around the
process of borrowing most likely to be mentioned
Businesses don’t
think they will get
approval

10. Business uncertainty

11. Waiting for the
economy to improve
Net monthly flow £billion
8
6
4
2
0
2007
-2
-4
-6
2008
2009
2010
2011
2012
Q2 2013
Jun-13
Jul-13
Aug-13

12. Is Peer-to-Peer lending
the solution?

13. What is Peer-to-Peer lending?
?

14. What is Peer-to-Peer lending?

Lending money directly to unrelated
individuals or companies

Doesn’t go through a bank or traditional
financial institution

Takes place online

15. The rise of Peer-to-Peer
Source: P2P Lending report 2013, includes Zopa, Ratesetter and Funding Circle

16. The rise of Peer-to-Peer

The UK government is now supporting
SMEs through non-traditional routes to
finance

18. How aware of Funding Circle were you
before this webinar?
?

19. What do Funding Circle do?

Launched in August 2010 as the first UK Peerto-Peer lender for businesses

They provide an online platform where
lenders can ‘bid’ amounts and interest rates
to become part of a loan

Lenders lend to lots of businesses, and
businesses are lent to by hundreds of lenders

20. What do Funding Circle do?

Flexible business loans up to £1 million

Terms from 6 months to 5 years

Unsecured and secured loans, as well as asset
finance. No early repayment charges

A community of over 50,000 individual
investors ready to lend

21. What do Funding Circle do?
Average rate 8.6% and no early repayment penalties
Unsecured loans
Secured loans
Asset finance
 £5k - £150k
 £100k - £1m
 £20k - £1m
 Suitable for a
wide range of
purposes
 2nd charge OK
 Suitable for a
wide range of
hard assets
 All asset security
agreement, or
 PG required
 Charge on
property
 Hire purchase
agreement
 100% LTV + VAT if
required

22. What types of business do Funding Circle lend to?

23. What are the minimum
criteria to apply?

24. 
Limited companies, LLPs and selected non-Ltd firms

Established companies: trading for 3+ years with at least
2 years of filed accounts

Good credit history. Upward or stable financial trends

Minimum turnover: £100,000

Directors: majority UK resident, good credit history

No CCJs over £250

25. How does the process
work?

26. ① Pre-approve your
business online
② Complete full
application in 15
minutes
③ Decision within 3
days

27. Applications are then credit assessed
Businesses are given a risk band at assessment which determines
the rate on the marketplace
Businesses are listed online and lenders bid to be part of the loan
Funds can be transferred as soon as the full loan amount is reached

28. What fees are charged?

29. 
There are no fees to apply.

Borrowers are only charged fees on drawdown (2 year
loans at 3%, 4 and 5 year loans at 4%).

Fees can be added or subtracted from the loan where
possible.
E.g. Based on a £50k loan over 3 years, repaid in equal monthly repayments:
Cost (rate)
Cost (amount)
Interest (annual rate)
6.0%
£3,259.49
Fee
3.0%
£1,500.00
Total cost = interest + fee
£4,759.49
Monthly repayments
£1,521.10

30. Do I need to offer a
personal guarantee?

31. 
For most unsecured loans and some secured loans, a
personal guarantee is required from one or several of
the officers.

Normally required from the major controlling
shareholders (25% and above).

May be joint and several. Also, cross company
guarantees are possible.

Over 95% of guaranteeing officers are homeowners, but
for loans below £50,000 if they are not a homeowner
the application will still be considered.

32. A one minute case study
A leading property purchasing company was looking for short
term finance in order to buy property at a lower gearing.
They wanted £300,000 over 60 months. With the help of
Funding Circle and 4576 lenders, they achieved an interest
rate of 9.98%.
Turnover: £9.9 million
Profit after tax: £764,000
Credit rating: B

33. ?

34. www.fundingcircle.com
To enquire about becoming an introducer to
Funding Circle, email broker@fundingcircle.com
or call 0203 667 2203.
info@fundingoptions.com
0845 366 4199