Rebuildingsociety achieved a profit of around £33,000 during 2020, which it will invest into the business as it targets another profit of between £25,000 to £60,000 this year.
Daniel Rajkumar, managing director of the peer-to-peer business lending platform, said last year that the firm faced Covid and competition from the coronavirus business interruption loan scheme (CBILS).
He said Rebuildingsociety adapted through diversified revenues, such as onboarding more appointed representatives (ARs) and doing more privately syndicated lending, where the platform facilitates lending between borrowers and lenders that know each other. It also made use of the furlough and bounce back loan schemes.
“We’re pleased to finish the year with a profit after a significant decline in revenues, we were affected with unfair competition though the CBILS initiative and not having access to it,” Rajkumar said.
“It significantly impacted our ability to lend but we had growth in other products and together with the easing of the different schemes, we’ve been able to pivot the business and manage it in a way to keep trading profitably.
“We were already familiar with remote working so experienced very little disruption from everyone needing to work from home. One of the things that helps the business is it has diversified revenues.
“We’ve done more privately syndicated lending, the ARs have been an important part of our business model. We’re cautiously optimistic we’ll be able to support new ARs in the future and we hope to cooperate with the Financial Conduct Authority on their scalebox initiative because we feel we’re well positioned.
“The £33,000 profit is helpful because it strengthens the financial resource of the firm, we’re not going to pay a dividend yet but will reinvest that money for growth and try to focus on the key opportunities following the economic recovery. We expect to be able to trade through the recovery whilst we’re looking to fundraise, but we’re not dependent on that for growth.”
Rajkumar said Rebuildingsociety started the year at a loss after making an accounting adjustment in January for the value of default fees, but still expects to make a £25,000 to £60,000 profit this year.
“We have had some defaults, these hasn’t been significantly above average, we haven’t been doing much lending but are less certain about the recoverability of certain debts,” he said.
“So far this year the business has traded profitably but has made a one-off adjustment for the recoverability of certain fees in light of Covid and the economic situation so we expect 2021 to also be a year of modest profit but we will have improved the human resources in the firm thanks to the new board and the Kickstarters that are joining.”
In November, Rebuildingsociety reported a profit of £215,864 for the year ending 31 December 2019, up from a £2,653 loss in 2018.