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Funding Circle Payment Holidays Update On COVID-19 1st April 2020

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By on 1 April, 2020 | Read more by this author

By Funding Circle.

Further actions to protect your returns

Last week, we outlined some of the actions we have taken to protect your returns on our platform, including tightening our credit risk parameters and strengthening our Collections and Recoveries capabilities.

As this fast-moving situation develops, we will continue to ensure your portfolio is well-positioned to deliver resilient returns. We wanted to highlight two areas where we have introduced measures to support this work:

Minimising avoidable credit losses

The ongoing restrictions on daily economic life will not impact all businesses equally within the diversified portfolio of businesses you lend to. However, it is inevitable that some will experience an impact as a result of the Coronavirus and may find it difficult to make their full monthly repayments.

While the Government has announced a range of unprecedented and wide-ranging measures to support small businesses [4thWay editor's note: it still remains to be seen how effective these measures will be], these will take time to get fully up and running. This means that over the next few months you are likely to see an increase in the number of late loans in your account.

We have deployed additional resources to our Collections and Recoveries team who are working closely to support these businesses through this period.

Providing flexibility in the short-term—for example through payment plans which allow businesses to reduce or have a temporary break from their repayments—will help many of these businesses to get through the next few months, and allow them to maintain their monthly repayments over the term of the loan. This will minimise avoidable credit losses in the long run, protecting your returns in the process.

Continuing to build resilient portfolios

Last week, we discussed some of the measures we have taken to protect investor returns. These included strengthening our credit criteria and increasing our pricing on new loans to reflect how the economy may perform.

In addition to lending to new businesses, investors also purchase existing loans sold by other investors. It is important that these loans are purchased at prices that reflect current market conditions, so in the future we may need to adjust the Transfer Payment paid from the seller of the loan part to the purchasing investor.

As the Transfer Payment goes to the buyer of the loan—rather than Funding Circle—this will help to ensure investors continue building resilient portfolios that are well-positioned to withstand changes in the economy.

We closely monitor both our loanbook and the external environment, and will review the Transfer Payment on an ongoing basis. If we adjust this we will update investors listing their loans for sale at that time. Otherwise, we will keep you updated through the Access Money Tab on your account, where you will be able to see the current Transfer Payment being applied.

Continuing to provide vital support to the UK’s small businesses

The ability of businesses to access finance is more vital than ever, and your lending will form an integral part of this support. If you have any questions, please don’t hesitate to get in touch. Remember, by lending to businesses your capital is at risk, and your investment is not covered by the Financial Services Compensation Scheme.

Read the main COVID-19 updates article: P2P Lending And COVID-19: News And Updates.

And: How COVID-19 Shows That P2P Lending Is A Fairer Investment.

Visit Funding Circle.

Our service is free to you. We don't receive commission from the above-mentioned companies. We receive commission from some other P2P lending companies when you click through from our website and open accounts with them. This doesn't affect our editorial independence. Read How we earn money fairly with your help.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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