The below tables show the expected and actual annualised returns for loans acquired by individual investors between 1 January 2020 and 17 April 2020 and are broken down by the Conservative and Balanced lending options. Following this period, lending for individual investors was paused in light of Covid-19 and on 10th March 2022, we announced the permanent closure of the platform for new investments from individual investors. You can read the full announcement here.
2021 returns
The actual annualised returns, after fees and bad debt.
|
Loans originated 1/1/2020 - 17/4/2020 |
Expected annualised lifetime return |
Expected annualised return - 11 months after acquisition |
Actual annualised return - 11 months after acquisition |
|
Conservative |
4.3 - 4.7% |
5.1% |
5.5% |
|
Balanced |
4.5 - 6.5% |
4.9% |
7.2% |
2021 defaults
The current percentage of loans, by loan amount, that have defaulted.
|
Loans originated 1/1/2020 - 17/4/2020 |
Expected lifetime defaults |
Expected defaults - 11 months after acquisition |
Actual defaults - 11 months after acquisition |
|
Conservative |
4.0 - 5.5% |
3.0% |
2.4% |
|
Balanced |
8.2 - 14.7% |
7.2% |
4.1% |
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2020 retail outcomes statement
Until lending was paused in April 2020, individual investors lent through two options: conservative
and balanced. The below tables show the expected and actual annualised returns for loans
acquired through each of these products between 1 January 2020 and 17 April 2020.
2020 returns
The actual annualised returns, after fees and bad debt.
|
Loans originated 1/1/2020 - 17/4/2020 |
Expected annualised lifetime return |
Expected annualised return - 11 months after acquisition |
Actual annualised return - 11 months after acquisition |
|
Conservative |
4.3 - 4.7% |
6.2% |
6.3% |
|
Balanced |
4.5 - 6.5% |
7.6% |
7.8% |
2020 defaults
The current percentage of loans, by loan amount, that have defaulted.
|
Loans originated 1/1/2020 - 17/4/2020 |
Expected lifetime defaults |
Expected defaults - 11 months after acquisition |
Actual defaults - 11 months after acquisition |
|
Conservative |
4.0 - 5.5% |
1.0% |
0.8% |
|
Balanced |
8.2 - 14.7% |
2.1% |
1.6% |
Explaining these numbers
A range of measures have been introduced to support small businesses through the impact of Covid-19, including payment plans offered by Funding Circle and government stimulus measures. This has helped businesses to weather extended periods of trading restrictions and has reduced the number of loans that defaulted in 2020. As defaults lower the return earned by investors, the actual return is higher than it would be if this support was not in place. As economic conditions return to normal through 2021, we expect this to be reflected in an increase in loan defaults and a reduction in the actual annualised return.
Disclaimer
This material contains a number of statistical analyses that have been prepared by Funding Circle. Some of the metrics shown contain forward-looking estimations, which should not be relied upon as a warranty, promise or guarantee as to the future performance of any loans. Any historical information contained in this statistical information is not indicative of future performance. Subject to applicable regulations, no person is under any obligation to update or revise the information. By lending to businesses, your capital is at risk.
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