Funding Circle
Holdings plc
(“Funding
Circle” or the “Company” or the “Group”)
Completion of
process to focus on UK business
Agreement
reached with iBusiness Funding to acquire Funding Circle’s US
business
Further to the announcement on 7
March 2024, Funding Circle today announces it has entered into an
agreement for the sale of Funding Circle’s US business to iBusiness
Funding, LLC (IBF).
The transaction will be for a
total cash consideration of £33m1 2, for the US business including all loan
portfolios, which includes a £10m gain, before transaction
costs. The proceeds from the transaction will be
reviewed in line with our capital allocation framework.
Lisa Jacobs, Funding Circle CEO,
said: “In March, I announced
that we were simplifying the business by exiting the US and
focusing on profitable growth in the UK business. Alongside the UK
restructuring actions announced in May, we are continuing to
execute against this plan with the sale of the US business to IBF.
The UK business is on track to be profitable in H2, in line with
our guidance. Over the medium term we expect net income growth of
15-20% CAGR with PBT margins of >15%.
Over the last
decade, our US team has played a significant role in getting
finance to America’s small businesses and I want to thank them for
all the commitment that they have shown to our customers. We are
pleased that in IBF, one of the leading SMB loan processors, we
have found a partner that shares in our mission and we look forward
to seeing the success of the combined entity in issuing SBA loans
to businesses across the US.”
IBF is a leading provider of
lending solutions for banks and lenders of all sizes with a
specialisation in SBA lending. The company is dedicated to
streamlining the business lending process to allow lenders to
efficiently deliver capital to small and medium-sized businesses.
IBF has processed over $6 billion in SBA loans to date, and the
team processes over 1,000 business loan applications through its
platform daily. It is a wholly owned subsidiary of Ready Capital
Corporation (NYSE: RC).
Justin Levy, IBF CEO,
said: “We are delighted for
Funding Circle US to become part of IBF. Over the last 10 years,
Funding Circle US has made a significant contribution to supporting
US small businesses and together we will be able to accelerate
progress to help even more businesses. We look forward to welcoming
the team and continuing the important work of providing highly
flexible and efficient funding solutions to US small
businesses.”
As the Ready Capital group
already holds an SBLC license, Funding Circle has, with SBA
consent, surrendered its SBLC license. The transaction is expected to close by the
end of June.
Funding Circle will announce H1
2024 results on 5 September 2024.
1 Total cash consideration
subject to net asset adjustment at closing.
2
The Transaction
constitutes a Class 2 transaction under the UK Listing
Rules. Funding Circle US
had gross assets of £89m as at 31 December 2023. The US business
contributed losses of £(23)m to the overall Group in 2023, although
reported a statutory profit before tax of £7m for the year ended 31
December 2023.
Contacts:
Funding Circle:
Investor
Relations ir@fundingcircle.com
Tony Nicol
Media
Relations press@fundingcircle.com
Angeli Everitt
Headland
Consultancy +44 (0) 20 3805 4822
Mike Smith / Stephen
Malthouse
About Funding
Circle:
Funding Circle (LSE: FCH) is the
UK’s leading SME lending platform. Its mission is to build the
place where small businesses get the funding they need to win.
Funding Circle enables small businesses to access funding –
offering an unrivalled customer experience powered by data and
technology. For institutional investors, Funding Circle provides
access to an alternative asset class in an underserved market with
robust and attractive returns. Globally, Funding Circle has
extended more than £16bn in credit to c.150,000
businesses.
About iBusiness
Funding:
IBF is a leading provider of
lending solutions for banks and lenders of all sizes with a
specialisation in SBA lending. The company is dedicated to
streamlining the business lending process to allow lenders to
efficiently deliver capital to small and medium-sized businesses.
IBF has processed over $6 billion in SBA loans to date, and the
team processes over 1,000 business loan applications through its
platform daily.
