I've been reading about Funding Circle in
this article in the Guardian (Funding Circle's home page also contains links to other news articles that have featured it). It's a new internet-based market that allows individuals to lend money to small businesses. So, it is similar to Zopa, which supports lending of money amongst individuals.
I've not tried it myself but am tempted... you just need a few hundred pounds to make available for loans, and your money gets divided amongst 20 different businesses, so as to spread the risk, and then the claim is that you make on average about 6% on your savings, as opposed to about 2-3% as you currently make in a savings account. Interesting features include: lenders can bid their interest rate, resulting in a trade-off in that if you set a higher rate, it may take longer for your funds to be accepted. You can also set up or join a "circle" (see the help centre) to specialise which businesses you lend to. If you want your money back, you have to sell your outstanding loans to another lender (I assume that effectively results in a penalty for early withdrawal). The system supports "autobid" which manages the division of your funds amongst distinct businesses, and recycles repayments into new loans so that your funds continue to earn interest. Finally, on the downside, my impression from reading the help page is that the tax treatment of income is not very lenient.
A golden age?
1 hour ago