Funding Circle piloting referral scheme for large unsecured loans

By John Reynolds on Monday 11 November 2019

Alternative Lending

Funding Circle is referring potential customers to traditional banks and fintech rivals.

Funding Circle piloting referral scheme for large unsecured loans
Image source: Image of Funding Circle co-founders James Meetings and Samir Desai.

Funding Circle is piloting a scheme that involves it referring borrowers wanting large, unsecured loans away from its peer-to-peer lending platform to rivals.

Funding Circle is referring potential new customers to fintech rivals, small business lenders Iwoca and MarketInvoice, as well as the French bank BNP Paribas.

Instead of turning down the customers, the peer-to-peer lender is advising borrowers wanting unsecured loans above £500,000 to sign up with its rivals, which it receives a referral fee for.

A source close to Funding Circle said: "By working with others across the industry, Funding Circle can ensure that SMEs who come to Funding Circle can access finance that's suitable for them."

The pilot scheme, first reported by The Times, is in its early stages and Funding Circle is not commenting on it publicly.

Funding Circle has suffered a number of setbacks since its listing at 440p a share last year.

In August this year, Funding Circle reported a pre-tax loss of £31m over the last six months, compared to a £27m loss the year previous.

But last month, its loans under management soared 31 percent to £3.7bn, sending its share price up.

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.