Funding Circle will not consider reopening to retail investors while the recovery loan scheme (RLS) is still running, its outgoing chief executive has confirmed.
The peer-to-peer business lending platform closed its doors to retail money in April 2020 to focus on the government-backed loan schemes, which can only be funded by institutions.
Samir Desai, who is stepping down after 12 years at the helm of Funding Circle, said that opening up the platform now to retail investors would result in a “slightly uneven spread of loans”.
“The RLS runs until the end of the year and we just need to see where that gets to,” he told Peer2Peer Finance News.
“Obviously retail investors aren’t able to participate in the RLS so we’d have a slightly uneven spread of loans if we were to open up now.
“We’ve got no real update on that for the moment, we just need to see how things progress over the coming months, we need to see the economy destress and then we’ll evaluate when’s the best time to revisit our retail offering.”
Desai confirmed to P2PFN that the platform would not reopen to retail investors while the RLS was running.
Funding Circle became the first P2P lender to become accredited to the coronavirus interruption loan scheme (CBILS) in April 2020 and was also approved for the government’s bounce back loan scheme (BBLS).
Funding Circle subsequently became accredited for the RLS in May this year, which replaced CBILS, BBLS and a number of other state-backed measures.
Meanwhile, Funding Circle is understood to be funding its new buy now, pay later payments product, FlexiPay, from its balance sheet, while it tests it out in beta mode to a selection of its existing borrowers.
The product is designed to give small businesses more flexibility, allowing them to spread any UK invoice or supplier payment over three months, with the initial payment made upfront on their behalf.
UK managing director Lisa Jacobs, who is taking on the chief executive role in January, said that “it’s early stages at the moment” but the product is “likely to be a mix” of institutional and balance sheet funding in the future.