Funding Circle could be set to return to retail peer-to-peer lending in the coming months as the group expects to report a profit for the second half of 2020.
A trading update from the London Stock Exchange-listed P2P lender this morning (18 January) said it will operate its “core lending product alongside the long-term government guarantee programme previously announced by the Treasury” when the coronavirus business interruption loan scheme (CBILS) ends.
The deadline for CBILS applications is currently 31 March.
It is unclear how soon after Funding Circle will return to P2P lending.
A spokesperson said the platform will make its core product available for retail investors “once conditions allow.”
Funding Circle closed to new retail loans and stopped access to its secondary market when it became a CBILS-accredited lender in April 2020.
The CBILS loans can only be backed by institutional funds.
Funding Circle said that it represented around 25 per cent of CBILS loans as of 13 December.
The trading update said income across the group for the six months to the end of December 2020 – including its operations in the UK, US, the Netherlands and Germany – was up 26 per cent annually.
This was supported by record loans under management of £4.2bn – up 13 per cent – and a 41 per cent increase in originations to £1.6bn.
Profit across the group for the second half of the year is expected to be no lower than £15m, Funding Circle said.
Much of boost in activity came from its UK operations, where income rose 60 per cent annually to £94m.
Its UK business saw a 91 per cent increase in originations to £1.4bn during the six months and loans under management reached £3.2bn for the year.
In contrast, income in its US and European businesses was down 17 per cent and 71 per cent respectively.
US originations fell 44 per cent to $171m and were down 89 per cent in Germany and the Netherlands, where Funding Circle has moved to a referral model, to £10m.
“As a result of Covid, we are seeing an acceleration in the shift towards online in small business lending,” Samir Desai (pictured), chief executive of Funding Circle, said.
“As the largest online small- and medium-sized enterprise loans platform we used our advanced technology to reach record levels of lending in 2020 and we are well placed to capture this enlarged opportunity going forward.
“We achieved group adjusted earnings before interest, tax, depreciation and amortisation (AEBITDA) profitability in the second half of 2020.
“This is a significant milestone for the business and we expect to continue to be AEBITDA profitable going forward.”