Funding Circle has been in the headlines in recent months, particularly due to its inclusion in government-backed lending schemes amid the pandemic.
The ‘big three’ peer-to-peer lending platform has hit many headlines of late, from the lender’s response to the Covid-19 crisis to how it is using it as an opportunity to help businesses through this time via the coronavirus business interruption loan scheme (CBILS) loans.
Here Peer2Peer Finance News explores what’s been happening at the peer-to-peer lending giant.
In March, Funding Circle published its results for 2019, showing pre-tax losses of £49.9m for the year, up from £45m in 2018 while revenues rose across the group by 18 per cent to £167.4m.
Funding Circle chief executive Samir Desai said that the business’s UK arm became profitable in the second half of 2019, with revenues rising by 16 per cent year-on-year, and the group expects to break even by the middle of 2020.
In March, the platform told potential borrowers it is still open for businesses and for any existing borrowers affected by the pandemic and struggling to repay loans, to get in touch. At the time the lender announced it had received a significant increase in searches for business loans.
At the end of that month, Funding Circle tightened its lending and adjusted its pricing to mitigate the economic uncertainty caused by Covid-19 and started reviewing all retail and hospitality offers.
As payment support requests increased, Funding Circle bolstered its collection and recoveries teams and agreed payment plans with delinquent borrowers to mitigate the risks of the coronavirus pandemic on investor portfolios.
In April, the platform paused its secondary market indefinitely to protect investor returns.
Government lending schemes
In April Funding Circle became the first P2P lending platform to be accredited to deliver the coronavirus business interruption lending scheme (CBILS). The platform paused all non-CBILS lending from retail and institutional investors to focus on supporting the scheme until further notice.
The lender started accepting applications for CBILS on 30 April at rates of between 1.4 per cent and 8.9 per cent APR for between two and five years.
The platform recently announced that as of the end of June, it facilitated a 16 per cent share of CBILS, approving approximately £460m in applications and originating £300m.
Earlier this month, the platform was also accredited by the British Business Bank to finance loans under the bounce back loan scheme. It offers 2.5 per cent for a term of six years.
Across the pond, Funding Circle was approved to deliver emergency funding to small businesses in the US impacted by Covid-19.
The platform was accredited by the country’s Small Business Administration (SBA) and the US Treasury to originate loans under the Paycheck Protection Program (PPP), which are 100 per cent guaranteed by the SBA.