As has been widely publicised, many small businesses in need of funds to assist the growth of their business or to make capital purchases have been finding it difficult to obtain funds from their banks.
At the same time, many individuals with spare capital have been disappointed at the interest rates available to them on their savings with those same banks and buildings societies.
We have been made aware of a potential answer to both of the above problems.
Funding Circle is an online marketplace established to help businesses find finance, and at the same time to help private investors get better rates of return on their investments.
Businesses can apply to Funding Circle for loans of between £5,000 and £1M for use in their business. The rates of interest are set by the investors lending the money. This allows you to shop around and obtain the cheapest rates available at that time from several different investors.
How does it work?
Investors can choose which businesses to offer their money to and set their own interest rates which need to be attractive to the businesses looking for finance but should still give a higher rate of return than traditional bank and building society are currently offering. Your invested funds can be spread across a number of businesses, to try to maximise returns and minimise the possibility of a bad debt.
There are obviously risks in this investment but some clients with spare cash may wish to look into this further.
More details are available online at www.fundingcircle.com or contact the office if you wish to discuss this further with us.
May 9th, 2013
