FUNDING Circle’s loans under management soared to a “new high” of £3.4bn in the first three months of the year.

The peer-to-peer business lender unveiled its first-quarter trading update on recently, which showed that loans under management rose by 44 per cent compared to the first quarter of last year, while originations grew by 23 per cent to £644m.  Revenue grew by 40 per cent year-on-year, which Funding Circle attributed to “greater loans under management and originations, higher transaction yield, due in part to policy changes last year in the US, plus growth in other revenue lines”.

Funding Circle said it is trading in line with the board’s expectations for the full year.

The P2P platform operates in four markets – the UK, the US, Germany and the Netherlands. It said that across all geographies, investor returns on a net basis are expected to deliver 4.5 to 8.4 per cent for 2018 and 5.0 to 8.5 per cent in 2019.

In the UK, 2012-2016 performance remains in line with previous forecasts, Funding Circle said. Loans originated in 2017 and 2018 are now projected to deliver net returns of 4.1 to 5.1 per cent and 4.5 to 5.5 per cent. Funding Circle tightened higher risk band lending in the UK during the first quarter of 2019 and is targeting 2019 projected net returns of five to seven per cent.

“The first quarter was a period where Funding Circle reinforced its leadership position across each of its markets, reaching a new high of loans under management of £3.4bn,” said Samir Desai (pictured left), chief executive and co-founder of Funding Circle.

“We continue to implement our strategy of diversifying funding sources with a new commitment from the European Investment Bank, as well as launching two new institutional investor products.”

On Thursday, the European Investment Bank agreed to lend €100m over the next two years to small businesses in Germany and the Netherlands via Funding Circle.  Earlier this month, Funding Circle announced that it was winding down its dedicated investment trust and is launching two new institutional investor products this year.

It also recently entered the securitisation market for the third time, with a £187m portfolio of UK loans backed by Pollen Street Capital.

About:  Funding Circle is a peer-to-peer lending marketplace that allows investors to lend money directly to small and medium-sized businesses. Funding Circle was the first website to use the process of peer-to-peer lending for business funding in the UK, and now operates in the UK, US, Germany, and the Netherlands.

FoundedAugust 2010; Revenue141.9 million GBP (2018); Traded asLSEFCH; Parent organizationFunding Circle Holdings; FoundersAndrew MullingerJames MeekingsSamir Desai; ExecutivesSamir Desai CBE (CEO, Co-founder),


Editorial comment:  The company states that it uses rigorous credit assessment in order to lend to creditworthy businesses and loans perform in line with our expectations.  It does not disclose method nor type of data acquired of its risk assessment process.