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Funding Circle
Nov. 2nd, 2019 06:51 pm I know one or two of you joined Funding Circle several years ago when I recommended it, so a follow up post...
Although I've had good returns over the years, I'm now getting out of Funding Circle.
Several reasons -
1. I started the process because they didn't have a method of automatically paying my bank interest/repaid loans when I wanted to take an income. Lending Works is MUCH better in that regard.
2. You can get stuck with a long tail of loans that are bad debts. Yes, they'll recover some of them, but the rate isn't brilliant. (Lending Works have a provision fund for bad debts)
3. Funding Circle are losing a lot of money. In my eye at least, that looks like increasing risk of platform failure. (most peer to peer companies appear to lose money, but Funding Circle is running at a very big loss)
I'm staying with Lending Works, as they are much lower risk, but I am reminded of the need to diversify.
Read Financial Thing if you want a good guide to Peer to Peer lending.
My next project is to take a serious look at ethical investments. (One of the things that originally drew me to Funding Circle was the opportunity to choose which businesses I invested in. This allowed me to avoid anything I found unethical. That option no longer exists)
I need to ensure none of my money is invested in fossil fuels, and that's a lot harder than it sounds. I've already changed my bank, but there's a lot more to do yet. (Insurance, pension?, all kinds of stuff)
Although I've had good returns over the years, I'm now getting out of Funding Circle.
Several reasons -
1. I started the process because they didn't have a method of automatically paying my bank interest/repaid loans when I wanted to take an income. Lending Works is MUCH better in that regard.
2. You can get stuck with a long tail of loans that are bad debts. Yes, they'll recover some of them, but the rate isn't brilliant. (Lending Works have a provision fund for bad debts)
3. Funding Circle are losing a lot of money. In my eye at least, that looks like increasing risk of platform failure. (most peer to peer companies appear to lose money, but Funding Circle is running at a very big loss)
I'm staying with Lending Works, as they are much lower risk, but I am reminded of the need to diversify.
Read Financial Thing if you want a good guide to Peer to Peer lending.
My next project is to take a serious look at ethical investments. (One of the things that originally drew me to Funding Circle was the opportunity to choose which businesses I invested in. This allowed me to avoid anything I found unethical. That option no longer exists)
I need to ensure none of my money is invested in fossil fuels, and that's a lot harder than it sounds. I've already changed my bank, but there's a lot more to do yet. (Insurance, pension?, all kinds of stuff)
