30 November 2018 Ordinary Share. Key Portfolio Data. Monthly Commentary. Monthly Return Attribution. Company Information

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1 Summary The Funding Circle SME Income Fund (the Fund ) is a Guernsey closed-ended investment company listed on the Main Market of the London Stock Exchange. Its investment objective is to provide shareholders with a sustainable and attractive level of dividend income from a diversified pool of loans to small businesses originated through the Funding Circle platforms. Monthly Commentary The Company has observed reduced NAV returns in 2018 as a consequence of IFRS9 adoption, lower performance on seasoned 2016 and 2017 cohorts, hedging costs on USD assets and higher running costs. In November, the Company recognised a fair value adjustment on its investment in the EIB transaction. In order to boost NAV returns the Board has resolved to reduce USD exposure further and redeploy proceeds into and CE assets which have higher GBP-equivalent yields. In addition, the Board has taken the decision to initiate share buybacks in the secondary market, where accretive to NAV. The monthly factsheet now provides additional disclosure to shareholders on underlying Company loan performance and portfolio composition. The Board intends to maintain the dividend at 5.25p (on an annualised basis) on an uncovered basis until at least the period ended 30 June The Board guides investors towards total NAV returns for the twelve month period to 31 December 2019 of + (+/-50bps). The Board believes, on the information available to it, that there is a realistic prospect of the Company being able to reach a position where the dividend is once again covered on an ongoing basis within the medium term. Please see more details overleaf. Key Portfolio Data NAV per Total Net Assets Price Market Capitalisation Premium / (Discount) Weighted Average Loan Life Largest loan as % of NAV Average loan size as % of NAV 12m Trailing Dividend per Share Weighted Average Cost of Debt Total number of loans Monthly Return Attribution Gross Income 1.0 Impairment & FV Adj. (IFRS 9 basis) (2.1)* Servicing Fees (0.0) Fund Expenses (0.) Performance Since Inception FX Hedging Costs (0.0) 22% 1 2% -2% Share Price Total Return NAV Total Return Premium/(Discount) Loan Interest Expense (0.0) Net NAV Return (1.42%) = *Under IAS 39, impairment charge = (2.2) Company Information Vehicle Type Jurisdiction Admission Date Market Guernsey 96.29p 322mil 91.00p 304mil (5.) 29 months 0.2% 0.01% 6.2 pence 2.2% 9,138 Closed-ended Investment Company 30 November, 2015 (1.2) (0.1) London Stock Exchange (LSE) NAV Performance Since Inception (Total Return) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD ITD % 0.1% % % % % ISIN Ticker Financial Year End Dividend Declaration Months s in Issue Leverage Limit Management Fee GG00BYYJCZ96 FCIF 31 March January July April October 334,267, x NAV Dividends By Pence Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD ITD Performance Fee Platform Servicing Fee 1% Service Providers Investment Manager Administrator Registrar Fund Auditors Self-managed by the Board of Directors Sanne Group (Guernsey) Limited Link Market Services (Guernsey) Limited PwC CI Loan Book Independent Reviewer Corporate Broker Euro Credit Risk Numis Securities

2 Monthly Commentary (continued) November NAV adjustment This month s reduction in NAV is largely attributable to a -1.2% fair value adjustment on the Company s investment in the European Investment Bank transaction, which is invested in loans. The Company s participation is carried at fair value. A reduction in future expected cash receipts results in an accounting adjustment. Since the investment is levered 4x it is particularly sensitive to changes in default, prepayment and recovery assumptions. The November impairment charge also includes an increase in the provision on delinquent and defaulted loans to take account of changes in recovery assumptions. Net of these two adjustments, the impairment charge for the month is -0.. Market conditions Market conditions remain largely favourable across each of the countries where the Company lends. Credit performance of the US, German and Dutch loan books have been improving since 2015 and are broadly in line with expectations. Although the credit environment for small businesses in the remains strong, the outlook for consumer credit in the has worsened in recent years with higher levels of consumer debt and personal insolvencies. This has impacted a population of Funding Circle loans in higher risk bands that can be more susceptible to shifting trends in the consumer credit environment (namely younger companies and those where directors have lower consumer credit scores). These headwinds are reflected in lower projected returns in the in 2016 and 2017 cohorts as compared with 2015 when the Company was launched. Funding Circle has reacted to these developments by making changes to its pricing and credit strategy in 2018, including incorporating data directly from an applicant s bank into its latest risk model. It expects current originations to yield 6- on a net basis following these changes. Interest rates have diverged materially between the US, and Europe over the past three years. This means that whilst hedging US dollar assets has become increasingly expensive, it has made investing in EUR assets more attractive in sterling equivalent terms. Company loan performance The Company s loan portfolio has delivered an underlying cashflow return on assets (RoA) of 5. per annum since inception, as seen in the chart on page four. As defaults are realised over time, the cashflow RoA eventually decreases before plateauing as recoveries are received and the default curve flattens. This phenomenon, sometimes referred to as a seasoning effect, is described further in a Funding Circle blog post published last year¹. Whilst Funding Circle expects new loans to generate higher returns, it will take time for the Company s exposure to these cohorts to increase materially. The difference between cashflow RoA and accounting returns is attributable to leverage, IFRS 9 and fair value adjustments, and the running costs of the Company, which include FX hedging, operating expenses and interest payable on debt. The use of leverage magnifies the NAV impact of lower returns on loans originated in 2016 and Strategic initiatives In July, the Board announced it would lower the Company s USD exposure on a gross assets basis by to mitigate the cost of hedging USD back into GBP. Since that date, the GBP USD interest rate differential has widened again and, consequently, the Board has resolved to reduce the size of the US loan book further by allowing the portfolio to amortise, whilst retaining the option to recommence lending in the US if market conditions change. Meanwhile, the Board will seek approval from shareholders to increase the maximum permitted exposure to German and Dutch Credit Assets; these loans presently offer the highest sterling equivalent net returns. In addition, the Board has decided to commence repurchasing the Company s shares in the secondary market. The Board currently intends to continue to repurchase shares in the secondary market to the extent that liquidity is available to do so, that the Board assesses the trading price of the Company s ordinary shares to be attractive, and to the extent authorised by the Company s shareholders from time to time. The Company will make the usual market announcements at the appropriate times. Forward guidance The Board guides investors towards total NAV returns for the twelve month period to 31 December 2019 of + (+/-50bps). This guidance takes a cautious view on loan returns and prudently assumes no material reduction in operating or financing costs. The Board will update this guidance on a semi-annual basis and more frequently if material new information becomes available in respect of evolving credit performance or other materials factors impacting performance. Furthermore, the Board has resolved to maintain the Company s dividend payment of 5.25 pence per share (on an annualised basis) for at least the period to 30 June 2019, despite such dividend likely being uncovered. This represents a change to the Company s prior position of not paying an uncovered dividend, and is made on the basis that the Board believes, on the information available to it, that there is a realistic prospect of the Company being able to reach a position where the dividend is once again covered on an ongoing basis within the medium term. New factsheet disclosure The monthly factsheet now includes two additional metrics - A cashflow RoA chart designed to help understand underlying loan performance. Weighted exposure of each of the, US, German and Dutch loanbooks to annual origination cohorts. Funding Circle s latest view on net return expectations for each of these cohorts is available on the statistics pages of the Funding Circle website². Interim financial statements On 18 December 2018, the Company published its interim financial statements covering the period 1 April 2018 to 30 September These are available for download at ¹ ²

3 Region Split 2% US CE 52% 4 1 South East London Midlands North West South West North East Scotland East Anglia Wales Northern Ireland California Texas Florida New York Illinois Georgia Virginia Michigan Washington The Netherlands Germany Spain Industry Split 1 1 2% US 1 CE 3 1 Property and Construction Wholesale and Retail Professional and Business Support Manufacturing and Engineering IT and Telecommunications Leisure and Hospitality Healthcare Transport and Logistics Automotive Prof, Scientific and Technical Services Retail Trade Health Care and Social Assistance Construction Accommodation and Food Services Services (ex. Public Admin) Administrative and Support Activities Arts & Entertainment Information Wholesale and Retail Trade Prof, Scientific and Technical Activities Construction Rental and Leasing Activities Manufacturing Transporting and Storage Information and Communication Accommodation and Food Services Service Activities

4 Asset Allocation Versus prior month 62% (-) US (-1%) CE (-1%) Cash (+) Cohort Split 3 4 Cohort US 42% 51% NL 21% DE 82% Return on Assets (RoA) 10.0 Return on Assets (cashflow-based) Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Unlevered RoA across all geographies An annualised measure of the cumulative cash returns from the loan portfolio. RoA to date is calculated as total cumulative cash income (interest net of servicing fee and recoveries) less defaults as a percentage of non-defaulted balance. This is aggregated across all geographies assuming the portfolios are fully hedged into sterling.

5 Definitions 12m Trailing Dividend per Share Average loan size as % of NAV FX hedging cost Trailing 12 month dividend per share. Average loan size as a percentage of current net asset value (NAV). The cost incurred in hedging USD and EUR exposure back to GBP. Largest loan as % of NAV Largest loan (outstanding principal balance plus accrued interest) as a percentage of current NAV. Loan interest expense Interest expense incurred on the Company's leverage facilities. Market Capitalisation Month-end closing share price multiplied by the number of shares outstanding at month end. NAV per NAV Total Return Price Premium / (Discount) Share Price Total Return Total Net Assets Total number of loans Weighted Average Life Return on Assets (RoA) Weighted Average Cost of Debt The total return on shareholders funds per share reflecting the change in NAV assuming that dividends paid to shareholders were reinvested at NAV at the time the dividend was announced. A measure of performance showing how the NAV per has performed over a period of time, taking into account both capital returns and dividends paid to shareholders. It assumes that dividends paid to shareholders are reinvested at NAV at the time the shares are quoted ex-dividend. Opening NAV in November 2015 was 98.00p, after initial costs. Closing share month-end market mid-price, excluding dividends reinvested. The amount by which the share price of the Company is either higher or lower than the NAV per, expressed as a percentage of the NAV per. A measure of performance showing how the share price has performed over a period of time, taking into account both capital returns and dividends paid to shareholders. It assumes that dividends paid to shareholders are reinvested in the shares at the time the shares are quoted ex-dividend. The value of assets of the Company less liabilities determined in accordance with the accounting principles adopted by the Company. Number of loans in the portfolio excluding fully repaid loans. The weighted average of the principal repayment times; the figure is weighted by outstanding principal balances and excludes fully repaid and defaulted loans. For amortising loans, the figure is calculated by dividing the total interest payable by the loan principal multiplied by the interest rate. For bullet loans, the weighted average life is equal to the tenor. An annualised measure of the cumulative cash returns from the loan portfolio. RoA to date is calculated as total cumulative cash income (interest net of servicing fee and recoveries) less defaults as a percentage of non-defaulted balance. This is aggregated across all geographies assuming the portfolios are fully hedged into sterling. The average rate of interest paid to senior finance holders. Note: The Company's indirect investment in Credit Assets, made alongside the EIB, is incorporated in this factsheet on a "look-through" basis in the following sections - Key Portfolio Data, Asset Allocation, Region Split and Industry Split. Contact Information Chairman Richard Boléat +44 (0) Disclaimer Numis Securities Nathan Brown, James Glass +44 (0) ir@fcincomefund.com This factsheet (the Factsheet ) is issued by Funding Circle SME Income Limited (the Company ) to and for the information of its existing shareholders and does not in any jurisdiction constitute investment advice or an invitation to invest in the shares or any other securities of the Company or any other entity (body corporate or otherwise). This Factsheet is provided for information only, and if you are unsure of the suitability of this investment you should take independent advice. This Factsheet is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, South Africa or Japan or to US Persons as defined in Regulation S under the US Securities Act or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction. Any persons into whose possession this Factsheet comes should inform themselves about and observe any such restrictions. This Factsheet has not been approved by any supervisory authority and no regulatory approvals have been obtained. All data in this factsheet is at or to the final day of the calendar month identified in the heading of the Factsheet s front page unless otherwise stated. Past performance should not be seen as an indication of future performance. The value of investments and any income may fluctuate and investors may not get back the full amount invested. The views expressed are those of the board of directors of the Company (the Board ) at the time of writing, are subject to change without notice and do not constitute investment advice. Whilst the Board has used all reasonable efforts to ensure the accuracy of the information contained in this factsheet, it cannot guarantee the reliability, completeness or accuracy of the content. The information contained in this Report has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions expressed herein. The information and opinions contained in this Report, including any forward-looking statements, do not purport to be comprehensive, are provided as at the date of the document and are subject to change without notice. Nothing contained herein shall be deemed to be binding against, or to create any liability, obligations or commitment on the part of the Company, its directors and officers. Nothing contained herein is to be construed as investment, legal or tax advice and neither the Company nor any of its respective directors, officers, employees, partners, members, shareholders, advisers, agents or affiliates make any representation or warranty, express or implied as to the fairness, correctness, accuracy or completeness of this Factsheet, and nothing contained herein shall be relied upon as a promise or representation whether as to past or future performance or otherwise. The Company is registered with the Guernsey Financial Services Commission. The Company currently conducts its affairs such that it would qualify for approval as an investment trust if it were resident in the United Kingdom. The Company intends to continue to conduct its affairs in this manner for the foreseeable future (although no guarantee can be given that this will be achieved or will continue). On this basis, FCA authorised persons should be able to recommend its Shares to ordinary retail investors in accordance with the FCA s rules relating to non-mainstream pooled investments.