Alternative lender Funding Circle credits increased SME lending appetite, largely from the UK, for its better than expected results.
SME lender Funding Circle could be the next fintech to break even after it had a record 2020, according to a trading update from the firm.
The alternative lender said that it will become profitable in its Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (AEBITDA) in the second half of the financial year, a much better position than it previously thought.
In the market update, the listed firm said that as a result of a strong lending appetite from SMEs throughout the year, that “in the four months ended 30 October total income for the Group was up 38 per cent on last year.”
Much of this growth was led by Funding Circle’s UK-based lending, with the alternative lender’s income jumping by over two thirds (67 per cent) here in the UK.
The stock market update also revealed that, as of last week, Funding Circle has approved roughly £1.85bn and originated £1.35bn in CBILS loans.
The fintech also revealed that it expects its total income for 2020 to be roughly 20 per cent higher than in 2019.
Funding Circle follows in the footsteps of fellow profitable fintechs OakNorth, which became profitable all the way back in 2017, and Starling Bank that just recently announced that it was the latest fintech to break even.
UPDATE 24-11-2020 - A previous version of this article misstated some of Funding Circle's figures.