In 2021, Funding Circle will continue offering government-backed emergency loans in the UK and US and expand its core product range.
According to the lender’s latest financial report, it will launch new products in the UK and operate its core loan product alongside participating in the government’s new recovery loan scheme (RLS). The RLS is set to launch on 6 April and will replace the coronavirus business interruption loan scheme ending on 31 March.
In the US, the peer-to-peer lending platform will be offering first and second draw paycheck protection program (PPP) loans and when this ends, will originate government guarantee loans through the small business administration (SBA) programme on behalf of banks.
Funding Circle will also leverage its technology to launch new funding solutions and said originations over the full year will depend on how quickly the economy recovers in the UK and US.
“Trading has been strong since the start of 2021,” Funding Circle said in its financial results.
“As we transition to operating our core loan product alongside government guarantee programmes in the UK and US from the second quarter of 2021 onwards, we expect some initial reduction in lending…
“Our priorities to achieve this are clear. Lending on our core loans product and the new recovery loan scheme in the UK, and SBA loans on behalf of banks in the US, as well as continuing to operate our referral model for other borrower needs, will commence during the second quarter.
“Alongside this, we will look to take advantage of the opportunities that our technology provides us with to do more to help small- and medium-sized enterprises. Over the next 12 months we will leverage our technology to launch new funding solutions in the UK to help small business owners solve more problems.
“This includes an API to help embed Funding Circle into partners’ websites and platforms; a payment finance product to help them manage their cashflow challenges: and a new card for Funding Circle borrowers to enable them to better manage their business spending habits.”
In 2020 Funding Circle’s servicing fees, representing income for servicing loans under management, remained flat at £30.2m. The platform said with a large proportion of the UK originations occurring in the second half of 2020, the impact on the UK’s servicing fees will be more pronounced in 2021.
Alongside the results, Funding Circle – in partnership with Oxford Economics – published its 2020 Economic Impact Report.
This found that the majority (73 per cent) of Funding Circle’s customers expect to require further finance and 40 per cent have said they expect to require finance in the next 12 months, primarily for growth or investment.