David - I wish you had quizzed James on the security his company provides for the funds while are in his hands i.e moving between his company and the investee/investor. I assume this is several million pounds at any one time.

What is to stop him and his fellow directors absconding abroad with this money, as and when the size of this pot is tempting enough to make it worthwhile?

http://www.fundingcircle.com/lend/risk-returns/

"As with investing in corporate bonds and shares, lending via Funding Circle is not covered by the Financial Services Compensation Scheme. If you were to invest in corporate bonds or shares, and the broker that held these investments were to cease to trade, your underlying investments would still remain safe. We have put in place similar comprehensive arrangements at Funding Circle so that even in the unlikely event that Funding Circle goes out of business, the loans you have originated on our platform would be unaffected and you would continue to receive your repayments"

Rather worryingly, there may be a number of potentially misleading statements in this interview published on 20 June 2011. Most seriously, looking at the transcript, the Funding Circle representative states that "To date there have been no missed payments" and then when asked by David Kuo "No defaults at all?", James Meekings replies "None at all". However, it is public information that a loan made to one of the Funding Circle borrowers, classed as "Grade A (Low risk)" by Funding Circle, has already been classed as bad debt by Funding Circle following missed payments at the end of May 2011. There was, on 27 May 2011, a notification of a proposed liquidation from the liquidators, followed by a notification of default on 08 June 2011. These events occured well before the publication of this article and possibly the interview itself.

For a Director of Funding Circle to make such an apparent misrepresentation, whether intentional or not, is utterly unacceptable and potentially misleading to lenders who might be considering using that platform. If the interview was given before the end of May and/or the transcript is incorrect then the comments should have been updated to reflect subsequent events.The correct information regarding defaults needs to be provided and the situation clarified by Funding Circle.

Also, it is stated that "our lenders have lent over £13 million to small businesses" but am I correct in undestanding that this figure does not necessarily reflect the actual amount dirbursed to borrowers, which may be somewhat smaller and could reflect the total value of bids made, may of which get eliminated by more competitive offers? What is the actual value of funds disbursed to borrowers via the Funding Circle platform since inception to date?

Also, when asked by David about the level of fees paid by lenders James Meekings replies, "We charge a 1% fee, so the way we like to describe it is, all the interest goes directly to the lenders. We charge a 1% fee to those lenders. At the moment actually, we're giving 0.5% cashback as well, so your net fee is 0.5%". However, the 1% lender fee, as I understand it, is an annual fee, whereas the 0.5% cashback referred to is a one-off rebate, so the net fee would NOT be 0.5% over the course of a 3-year loan. Again, Funding Circle should clarify this point.

If lending platforms are marketing themselves as alternatives to the traditional banks, particularly where (as in this case) they do not qualify for FSCS support, and are to be seen as trusted providers it seems imperative to me that they are fully transparent and provide correct information.