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Funding Circle swings to a 2022 loss

Funding Circle says loan returns remained robust and attractive with upgraded returns for several cohorts. But lower volumes halted another year of profitability.

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Lisa Jacobs/Funding Circle.

Funding Circle lost £14.7m in 2022, following a drop in loan originations as the SME lender adjusted to worsening macroeconomic conditions. 

The annual loss last year contrasts with a profitable 2021, when the SME lender, and one of the UK’s first fintech companies, banked £64m.

Originations globally at Funding Circle dropped 35 per cent last year to £1.5bn, compared to £2.3bn in 2021.  Much of this was due to the end of covid lending schemes, of which Funding Circle was an important player. 

Nonetheless, the listed London-based firm also tightened its lending criteria in the second half of 2022 as inflation began to rise and the risk of a recession rose.

“We were prudent in our lending in 2022, and will continue to be whilst conditions remain challenging — as expected in the UK in 2023, where we have pushed out our 2025 income targets by a year. We're confident in the US and are excited about new FlexiPay growth over the medium term. Having built strong foundations to deliver against the plan, we expect to double Group income over the next three years," said Lisa Jacobs, CEO of Funding Circle.

"I’m really pleased with how the business reacted to the evolution of the economic environment and transitioned back to commercial lending, with government schemes phasing out in 2022. Overall we delivered a solid financial performance,” she added. 

Funding Circle’s loans under management now stand at £3.7bn, compared with £4.5bn at the end of 2021, a reduction of 16 per cent.

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