Investing your money can be a daunting task, especially when faced with the plethora of options available in today’s market. However, one investment platform that has gained popularity among investors is Funding Circle. In this comprehensive guide, we will explore how to invest in Funding Circle and the key factors to consider when making investment decisions.

What is Funding Circle?

Funding Circle is a peer-to-peer lending platform that connects investors with small and medium-sized businesses looking to borrow money. The platform allows individuals and institutional investors to lend money directly to businesses, bypassing traditional banks and cutting out intermediaries. This direct lending model makes Funding Circle an attractive investment option for those seeking potentially higher returns.

The Benefits of Investing in Funding Circle

There are several advantages to investing in Funding Circle:

  • High Returns: Investing in Funding Circle could potentially provide higher returns compared to traditional savings accounts or bonds. The platform allows investors to earn monthly interest payments from the businesses they have lent to. However, it is important to note that with higher returns comes higher risk.
  • Diversification: Funding Circle provides an opportunity to diversify your investment portfolio by lending to multiple businesses across different sectors. Spreading your investments can help reduce risk by mitigating the impact of defaults or delays in repayments from individual borrowers.
  • Simplicity and Accessibility: Funding Circle offers a user-friendly platform that simplifies the investment process. Investors can easily browse through loan listings, assess the risk profile of borrowers, and choose loans to fund. The platform also provides data and analytics to help investors make informed investment decisions.

Getting Started with Funding Circle

Before you start investing in Funding Circle, it is important to complete a few key steps:

  • Evaluation: Assess your investment goals, risk tolerance, and time horizon before investing in any platform. Understanding your financial objectives will help you make better investment decisions.
  • Registration: Sign up for a Funding Circle account by providing the necessary information and agreeing to the terms and conditions. This process is typically straightforward and can be completed online.
  • Due Diligence: Once registered, familiarize yourself with the platform’s borrower vetting process. Funding Circle employs various risk assessment techniques to evaluate borrower creditworthiness. It is crucial to understand the criteria they use to accept or reject loan applications.

Choosing Your Investment Strategy

When investing in Funding Circle, you have the flexibility to choose your preferred investment strategy. Here are some common strategies:

  • Manual Investing: In this approach, you personally select individual loans to fund. This strategy gives you more control over your investments but requires thorough analysis of borrower profiles and loan details.
  • Autobid: Alternatively, you can choose to use Funding Circle’s autobid feature. This feature automatically spreads your investment across multiple loans, according to your specified criteria. Autobid can save time and help diversify investments.

Understanding the Risks

Like any investment, there are risks associated with investing in Funding Circle. It is important to be aware of these risks before allocating your funds:

  • Default Risk: There is a possibility that borrowers may default on their loan repayments. While Funding Circle conducts thorough assessments, there is still a risk of loan defaults. It is crucial to diversify your investments to mitigate the impact of potential defaults.
  • Liquidity Risk: Funding Circle investments are usually long-term commitments. Unlike traditional stocks or bonds, it may be challenging to access your funds before the end of the loan term. Consider your liquidity needs before investing.

Monitoring and Rebalancing Your Portfolio

Once you have invested in Funding Circle, it is important to regularly monitor your portfolio and make necessary adjustments:

  • Performance Monitoring: Keep track of the performance of your loans and the overall health of your portfolio. Monitor repayment patterns and address any late payments or defaults promptly.
  • Reinvestment: As your loans are repaid, consider reinvesting the funds to maintain a diversified portfolio. Rebalancing your investments is crucial to ensure your portfolio aligns with your risk appetite and investment goals.


Investing in Funding Circle can be a lucrative option for those seeking higher returns and diversification. However, it is vital to carefully evaluate your investment goals, familiarize yourself with the platform, and understand the associated risks. With proper due diligence and a well-thought-out strategy, Funding Circle can provide an attractive investment opportunity in the dynamic landscape of peer-to-peer lending.