Funding Circle introduces two changes to secondary market

By John Reynolds on 2nd December 2019

P2P/Marketplace Lending

The peer-to-peer lender says one change will help cut average loan resale time.

    Funding Circle introduces two changes to secondary market
Image source: Image of Lisa Jacobs, UK Managing Director, Funding Circle

Funding Circle has today (Monday) introduced two key changes to its secondary market, including a measure designed to reduce the average resale time of loans.

The changes have been documented on the Funding Circle website today (Monday) and will be introduced immediately.

The first change will see Funding Circle switch from a first-come, first-served basis and introduce a tool which will cycle round all investors wanting to sell loans as many times as possible.  

Funding Circle says this will allow investors to get their funds back quicker and comes after the peer-to-peer lender said average resale time for loans rose from 100 days in September to 124 days in October.

The change "will give all investors wishing to sell access to funds more quickly and regularly," said a Funding Circle spokesperson.

"The new selling tool will cycle through all investors wishing to sell loan parts as many times as possible within a 120-day period," Funding Circle added in a blog post.

The second change will see Funding Circle introduce a sellers fee, meaning there will be a transfer payment of 1.25 percent which will go to the buyer of the loan.

Funding Circle said the payment will bring the peer-to-peer lender with how other platforms manage their secondary market.

The likes of Zopa and Ratesetter also have seller fees as part of their models.

Funding Cirle said: "Having conducted a review, the package of changes we are making are in the best interested of the vast majority of investors and will provide an improved overall service. The changes means every investor selling loan parts will begin to receive some funds back faster and more regularly."