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Funding Circle
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Jonbvn
Posts: 5,562 Forumite


Just came across this website where you can lend money to businesses to get a return - P2P lending similar to ZOPA.
http://www.fundingcircle.com/lend/
I was wondering if anyone here has signed up and is actively lending.
Any feedback would be useful.
http://www.fundingcircle.com/lend/
I was wondering if anyone here has signed up and is actively lending.
Any feedback would be useful.
In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
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Comments
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Article in the FT about it here suggesting the default rates may turn out to be higher. Mind you it was Zopa saying it.
From what I can see, a lot of ZOPA lenders have opened an account on FC.
Regarding what the ZOPA comment in the FT - "well they would say that wouldn't they!" IMPO It is difficult to gauge whether lending to businesses is any riskier than lending to individuals.
I do like the fact that you can sell your loans on FC, potentially allowing you to get all your money back quickly. Something that ZOPA does not have (yet).In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Just had an e-mail from lovemoney promoting this, so I would expect it to get a lot of interest in the next few days.
Any lenders out there wish to comment on their experiences so far?0 -
I have put some capital into the Funding Circle. It's early days, but seems fine. Money growing quicker than expected - my average interest is about 8%. It's very rewarding to feel you are providing a service that banks aren't, and it's a win-win - I get higher interest than in any savings account, and they get a loan at lower interest than a bank would make available. Previously, I had money in a Sainsbury's Saver that had limited withdrawals in a year. With Funding Circle, you are getting monthly repayments of both interest and capital, so it is possible to draw some money out when needed, if you keep a bit floating around, without losing all your interest as you would if withdrawing from a limited access or fixed saver.0
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AnnJackson wrote: »I have put some capital into the Funding Circle. It's early days, but seems fine. Money growing quicker than expected - my average interest is about 8%. It's very rewarding to feel you are providing a service that banks aren't, and it's a win-win - I get higher interest than in any savings account, and they get a loan at lower interest than a bank would make available. Previously, I had money in a Sainsbury's Saver that had limited withdrawals in a year. With Funding Circle, you are getting monthly repayments of both interest and capital, so it is possible to draw some money out when needed, if you keep a bit floating around, without losing all your interest as you would if withdrawing from a limited access or fixed saver.
I know nothing about this scheme, but it doesn't seem to have any major differences to a PONZI - how do you know it's not?0 -
I know nothing about this scheme, but it doesn't seem to have any major differences to a PONZI - how do you know it's not?
Sorry, but where's the similarity between this and a 'Ponzi' (note the fact that it's not all in capitals) scheme?0 -
edinburgher wrote: »Sorry, but where's the similarity between this and a 'Ponzi' (note the fact that it's not all in capitals) scheme?
Mart.vader ask a valid question, whether or not mis-spelt.
My understanding is that a Ponzi scheme is simply one that is intended to be fraudulent. You simply attract money in, and give good returns to the initial guys - paying it from the capital of today's investers.
Word gets around on how good it is, and so more people invest. More money is available to pay returns - that are not genuine - to investors - until such time as there is an 'Optimum' amount of cash with which to retire to the Caymans.
As to whether or not this scheme is fraudulent, I have no idea. I suspect not. But by definition, any such genuine scheme would start well because it takes time for defaults to 'happen'.0 -
Hi,
Thanks edinburgher (I have now corrected my capitals to your required format ! ! ) & Loughton Monkey.
As I said, I don't pretend to know anything about this scheme and am merely a newbie. I was asking whether there are any discernible differences from FC and a Ponzi scheme, other than the relative rates of interest and the honest or otherwise intention of each scheme.
It may not matter much if you don't put much too money into it, but as FC say, they are not regulated by the FSA. To put it bluntly, if it all goes pear-shaped, who does one get compensation from?0 -
FC act as an intermediary between people who want to lend money, and businesses who want to borrow. Funds sitting in your account that you haven't lent to anybody are held in a separate bank account that FC have no right to: in the event that they go bankrupt this money will be returned to those who deposited it.
If you choose to lend money to a business then the loan contract is between you and that business. You agree to pay a servicing fee (waived at the moment) to FC of 1% a year for which they will collect repayments, pay them into your account and chase up any bad debt. The only risk to your capital is if the businesses you lend to goes bankrupt (in the case of guaranteed loans, the guarantor would also have to go bankrupt), and you have access to the full machinery of the courts to chase up non-payers.
The risks are there, but they are well-defined in a way that the risks with traditional deposit banks are not.0 -
mart.vader wrote: »It may not matter much if you don't put much too money into it, but as FC say, they are not regulated by the FSA. To put it bluntly, if it all goes pear-shaped, who does one get compensation from?0
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