Funding Circle joins Bounce Back Loan Scheme as it cuts US headcount by 85

By Oliver Smith on Wednesday 8 July 2020

Alternative Lending

The lender has also reached £300m in CBILS lending.

Funding Circle joins Bounce Back Loan Scheme as it cuts US headcount by 85
Image source: Samir Desai/Funding Circle.

Funding Circle has been accredited to join the Bounce Back Loan Scheme (BBLS) as the lender also announced a restructuring of its US team this morning resulting in 85 job cuts. 

With bounce back loans Funding Circle has become the 24th provider to be accredited by the British Business Bank, and while it says short-term demand is “difficult to forecast”, existing Coronavirus Business Interruption Loan Scheme (CBILS) lending has originated £300m in new loans. 

“Following our accreditation to CBILS, our UK business has reached its highest ever levels of origination and has represented 16% of approved CBILS loans since we joined the programme,” said CEO and founder Samir Desai in a trading update this morning. 

Around 40 per cent of Funding Circle’s CBILS loans have been issued using the alternative lender’s instant decisioning technology, which can approve loans in as little as four minutes. 

“Our focus as a group remains on delivering our long-term priority of profitable growth. Our U.K. business was operating profitably in H2 2019 and continues to make good progress. Given the impact of COVID, we are introducing changes in the US to accelerate the US business's path to profitability." 

The changes specifically involve moving Funding Circle’s US tech team from San Francisco to the UK, and shifting sales and marketing to Funding Circle’s Denver office. 

One recent challenge facing lenders taking part in the UK’s BBLS and CBILS has been access to capital, with Tide yesterday shuttering its BBLS lending as a result of running out of cash to lend. 

Funding Circle meanwhile says it has completed funding agreements with multiple institutional investors to meet its CBILS capacity.

The British Business Bank also accredited Maven Capital Partners and Satago to CBILS today, with Maven issuing loans via the Midlands Engine Investment Fund's Debt Fund backed by the CBILS guarantee.

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.