Changing of the guard: Funding Circle’s new UK MD says “the atmosphere here hasn’t changed”

This is an excerpt from AltFi’s Alternative Lending State of the Market Report 2022, which is available for free here.

It has been a year of change for Funding Circle.

The platform was synonymous with peer-to-peer lending for more than a decade. It was the first to open up small business loans to retail investors in 2010, building up a loan book worth more than £4bn.

The platform was the first UK P2P lender to go public, entering the stock market in 2018 and played an active part in the government’s emergency lending schemes during the pandemic. But there have been signs of a shift in direction from the one-time P2P lending giant in recent years.

Changing Times

Funding Circle’s involvement in the Coronavirus Business Interruption Loan Scheme (CBILS)—the first alternative lender to be accredited by the British Business Bank to back loans in April 2020—meant it had to close to retail investors as this support could only be funded by institutions.

It was also revealed in September 2021 that Funding Circle’s eponymous founder Samir Desai would step aside as chief executive and become a non-executive director. He was replaced by then UK managing director Lisa Jacobs in January 2022.

Alex Allen, a former officer in the British Army’s Royal Green Jackets, had been waiting in the wings as commercial and strategy director since 2018 and took over from Jacobs as UK managing director to lead the brand through the new era.

Despite high-profile personnel changes and the absence of any of the platform’s founders from the day-to-day running of the business, Allen today insists the culture has remained.

“Funding Circle is a mission-led business, and our culture has always been one of our most important assets,” he says. “Our values really come through when personnel changes happen—while Samir has transitioned to the board and Lisa to chief executive, the atmosphere here hasn’t changed one bit.” 

He described it as a privilege to step up as UK managing director, explaining: “It helped that I was already very familiar with the business. So it didn’t take too long to get up to speed with the many projects happening around the business. Some parts of the role, like speaking with the media, are still quite new to me, but I’m relishing the challenge.”

“It’s been really pleasing to see the team continue to deliver our strategic objectives, whether that’s investing in our tech to attract and say yes to more businesses, or developing and rolling out our new products. It’s an exciting time.”

Busy Start

His first few months in the role have been pretty hectic and there is still plenty in his inbox. 

Funding Circle facilitated £3bn of lending through CBILS, the third-largest lender under the scheme and is accredited for Recovery Loan Scheme (RLS) finance, while also re-introducing its core loan product. 

“We are proud of our role in supporting small businesses during the pandemic,” Allen says. “Our ability to help so many businesses over this period has been driven by a permanent re-wiring of small businesses’ relationship with the digital world, accelerated by the pandemic.”

He said fintech lenders benefited from a shift online during the pandemic, a trend that he doesn’t think is likely to reverse. “As more small- and medium-sized enterprises (SMEs) turned online for their financial needs, they found an ecosystem of fintech lenders ready to provide them with simple and swift access to finance,” he says.

“Once SMEs borrow online, they’re unlikely to turn back, 60 per cent of our 2021 customers were first-time online borrowers, with three-quarters telling us they’ll come back to Funding Circle first in future.”

End Of The Peer-To-Peer Show?

Funding Circle’s involvement in the government-backed scheme has meant it was absent from retail P2P lending for the previous two years, prompting plenty of rumours on if and when it would return.

The platform regularly said it would review its retail policy once the emergency schemes ended, but its exit was confirmed in April 2022. Allen said closing the retail platform was a tough decision.

Want to keep going? Read the full feature in AltFi’s Alternative Lending State of the Market Report 2022, out now!