Involvement in government coronavirus support schemes could give a boost to the peer-to-peer lending sector, analysts claim.
Funding Circle is the only P2P lender to become accredited under the coronavirus business interruption loan scheme (CBILS) so far but others such as JustUs, Assetz Capital and Folk2Folk are awaiting the outcome of applications.
There are also calls to use P2P lenders and fintech firms to facilitate faster funding to small firms through other schemes.
“Involvement in CBILS for companies such as Funding Circle would be an endorsement for them from the government,” Adrian Lowcock, head of personal investing at investment platform Willis Owen said.
“Other factors are likely to come into play longer term, for example, the ability to operate digitally and have a functioning and smooth online process is increasingly important now.”
John Cronin, financials analyst for Goodbody, said involvement in CBILS would help Funding Circle’s share price and the view of the wider sector.
“It is meaningful for Funding Circle in a potential new loan volume capture context,” he said.
“Secondly, one could argue it provides some validation – from an authority – of the effectiveness of the P2P lending model.”