Thursday, June 20, 2024

Funding Circle opens ISA to new investors

  • Simple to use investment experience offers projected annual returns of 7.2% tax-free

  • £80 million has already been lent through an ISA by existing investors

  • Funding Circle has a proven 8-year track record of delivering attractive, stable returns

Funding Circle, the world’s leading small business lending platform, has today opened its Innovative Finance ISA to new investors. The Funding Circle ISA offers a tax-free market-leading* projected return of 7.2% per year.**

Launched in 2010, Funding Circle allows people to lend directly to small businesses, earning attractive stable returns whilst creating jobs and driving the economy forward. Investors will be able to choose one of two lending options, offering projected annual returns of either 7.2% or 4.8%, to quickly build a unique and diversified portfolio. Approximately £80 million has already been lent to thousands of businesses through a Funding Circle ISA since opening to existing investors last December.

There is the option to access funds early by selling loans to other investors at no extra cost. Currently, 98% of loans put up for sale are sold to another investor within 24 hours. To date more than £197 million in interest, after fees and bad debt, has been earned by investors.

James Meekings, UK Managing Director and co-founder, commented “We’re proud of what more than 79,000 investors have achieved over the last eight years by lending through Funding Circle. On average investors have earned 6.4% per year after fees and bad debt, creating tens of thousands of jobs by supporting businesses all over the UK. We’re excited to now offer tax-free access to this stable and attractive investment option.”

Long-term growth

If an investor uses their full ISA allowance of £20,000 to lend to businesses for five years at the current projected return of 7.2%, they could earn an estimated £8,635.77 in interest, resulting in a total portfolio of £28,635.77. By setting up a standing order for £150 a month, after 15 years this portfolio could have grown to over £100,000.***  

Flexi-ISA

The Funding Circle ISA is an Innovative Finance ISA, a new type of ISA separate to Cash and Stocks & Shares ISAs. It is also a flexi ISA, allowing investors to take their money out of their account and put it back later in the tax year without losing their tax-free entitlement. To help investors diversify and spread their risk, there is an initial minimum investment of £1,000. Investors will be able to transfer existing ISAs into a Funding Circle ISA later this year.

By bringing together industry-leading risk management policies and cutting-edge technology, more than £3.4 billion has been lent to 35,000 UK businesses. This has provided access to finance for the businesses responsible for 60% of UK GDP and 50% of UK private sector employment.

  1. Bank Execs See Attracting Gen Z As One Of The Biggest Challenges Of The Year Read more
  2. Pro Con Artist Cautions ‘No One Is Un-Scammable’ As Revolut Warns More Scams Reported Among Gen-Z And Millennials Than Boomers Read more
  3. Corpay to Acquire Cross-Border Payments Company Read more
  4. ZA Tech Rebrands as Peak3, Raises US$35M Series A led by EQT Read more
  5. UK’s Global Fintech Community on Track for Further Integrity and Ethics Skills Boost with Innovate Finance and CISI Certificate in Ethical AI Partnership Read more