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Funding Circle says UK business profitable despite lending dip

Funding Circle's lending to UK SMEs is down but demand for its new Flexipay product is soaring.

Lisa Jacobs Funding Cirlce CEO

Lisa Jacobs/Funding Circle

SME lender Funding Circle saw UK loan originations fall 27 per cent to £471m in the first six months of 2023 compared with the same period last year, according to a stock market update.

Total lending - including US loans and Flexipay - by the company hit £771m in the period.

Last year, when the business swung to a loss, Funding Circle clocked up £678m of lending for the second half of the year showing growth may be returning from the declining macro environment seen in 2022.

The company has also reported its UK  business is now profitable with demand from institutional investors rising to fund loans, despite the lower volumes.

Overall, however, Funding Circle reported a £3m loss for the H1 2023 period owing to what it said were investments in “attractive growth opportunities” in its  US loans business and its BNPL-like FlexiPay products. 

"We delivered a solid set of results in the first half of the year, in line with our expectations, and once again demonstrated the resilience of the business and our aptitude at responding to the changing economic environment,” Funding Circle’s CEO Lisa Jacobs said. 

“Our UK Loans business is profitable, we’ve seen good growth in US Loans and FlexiPay is showing great momentum as we expand our offering to access a larger market and serve more of our customers' needs,”  Jacobs said. 

FlexiPay transactions, she adds, have more than doubled to £90m in the first half of 2023 with more than £150m transactions since launch. 

“We have also extended our track record of delivering robust and attractive loan returns for our investors. We're making good progress towards our medium-term targets and are in a strong position to grow as the economic backdrop recovers,” she said.

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