Peer-to-peer lending platform Funding Circle has been accredited to offer Bounce Back Loans (BBLs), after revealing that it has facilitated a 16 per cent share of the coronavirus business interruption loan scheme (CBILS) since it began participating.
In a huge boost for the P2P sector, Funding Circle announced that it has now approved approximately £460m in CBILS applications and originated £300m as at 30 June 2020. June was a record month for originations, which were up by approximately 30 per cent year-on-year.
The platform credited its instant decision lending technology for the success of its CBILS offering. Approximately 40 per cent of Funding Circle’s loan applications were serviced by this technology, allowing it to make faster lending decisions and speed up the delivery of funds to businesses which have been hit by the Covid-19 pandemic.
“Our advanced technology, data analytics and originations platform is playing its part in helping thousands of small businesses to access important funds during this time of crisis,” said Samir Desai (pictured), chief executive and founder of Funding Circle.
“Following our accreditation to CBILS, our UK business has reached its highest ever levels of origination and has represented 16 per cent of approved CBILS loans since we joined the programme.”
Peer2Peer Finance News launched its ‘Back Our Industry’ campaign two months ago, with the aim of encouraging the government to utilise P2P lenders to support the nation’s small businesses and housebuilders.
Since then, four P2P lenders – Funding Circle, Assetz Capital, LendingCrowd and Folk2Folk – have been approved to offer CBILS loans. Funding Circle is the first P2P platform to be accredited under the BBL scheme, which has represented two thirds of the government-backed pandemic loans to date.
Funding Circle received an initial £750m from the British Business Bank for its CBILS programme, and the platform has now either completed or is close to completing new funding agreements with multiple institutional investors, including banks, asset managers and insurance companies to meet any future capacity.
A Funding Circle spokesperson said that it believes that Covid-19 has led to an acceleration in the adoption of online borrowing by small businesses.
“As the largest online small business loan provider in the UK, this puts Funding Circle in a strong position to benefit from this trend,” the spokesperson added.
Funding Circle has also announced that it will be slashing 85 jobs in the US to “accelerate the US business’s path to profitability”.
It plans to centralise its US technology team in the UK and move its sales and marketing teams to the company’s Denver office.
“Our UK business was operating profitably in H2 2019 and continues to make good progress,” said Desai. “Given the impact of Covid-19, we are introducing changes in the US to accelerate the US business’s path to profitability.”
Desai added that Funding Circle’s US arm has approved approximately $800m in PPP loans – the US equivalent of the UK’s CBILS loans.
“Our focus as a group remains on delivering our long-term priority of profitable growth,” he said.
Funding Circle’s shares were up by 14 per cent by mid-morning to 79.7p.