– Funding Circle now the only major P2P lender in the U.S. to offer qualified individual investors access to secured small business term loans, a traditionally hard-to-reach asset class –
Funding Circle, the global small business loan marketplace, has become the first and only major peer-to-peer lender in the U.S. to offer individual investors the opportunity to invest in secured small business loans with the launch of its new Fractional Loan Marketplace.
Through its affiliated broker-dealer, Funding Circle Securities, investors can now buy fractional pieces of secured small business loans ranging in size from $25,000 to $500,000 and in term from one to five years, with coupon rates of 5.99-20.99%.
Funding Circle co-founder and U.S. managing director Sam Hodges said the new marketplace opens the traditionally hard-to-reach asset class to more individual investors who can now build diversified portfolios with smaller amounts of capital by investing in portions of loans instead of whole loans.
“We’re excited to be the first major P2P lender in the U.S. to offer qualified individual investors unique access to a curated selection of true small business term loans underwritten by our seasoned credit professionals using robust data analytics,” he said. “Our borrowers are high-quality businesses left behind by banks due to industry inefficiencies, tighter lending regulations and archaic underwriting models. These are established businesses that have assets and cash flow to secure loans, plus a legitimate plan for growth.”
Since Funding Circle was founded in 2010, 35,000 investors have lent more than $800 million to 7,000 small businesses globally.
“There is tremendous demand in the market for fast and affordable small business loans; we’re about to cross $1 billion in originations globally,” said Hodges. “With the launch of our Fractional Loan Marketplace, we expect it will be another good year to tap into investors seeking yield in a low rate environment and bring more capital into this attractive asset class.”
Investors can access Funding Circle’s Fractional Loan Marketplace with a minimum opening balance of $50,000 and a minimum investment per borrower-payment dependent note (BDN) of $1,000. Investors receive access to data from across the full Funding Circle loan book, and can either browse the marketplace and select individual investments or set criteria and invest automatically through an auto-bid function. Every loan on the marketplace is underwritten by Funding Circle’s experienced underwriting team and assigned a risk score ranging from A+ to C. Funding Circle is currently only accepting investment from individuals and entities who meet the SEC’s criteria for accredited investors.
For the nine million accredited investors in the U.S., Hodges offered his top tips for individuals considering investing in P2P loans:
About Funding Circle:
Funding Circle is the world’s leading online marketplace lender exclusively focused on small business. By combining cutting edge technology with industry-leading risk management models, Funding Circle provides small businesses with fast, fair and transparent finance and investors with access to attractive returns through an online marketplace. Since its foundation in 2010, Funding Circle has lent more than $800 million globally to help small business owners grow their businesses, create new jobs and ultimately accelerate economic growth. More information is available at www.fundingcircle.com/us