After starting 2020 with strong levels of demand in the UK and US, since mid-March the group “proactively” tightened credit as the Covid-19 pandemic took hold, stepped up work to become accredited to UK and US government loan schemes, and moved all teams to work from home.
Having now gained accreditation on both sides of the Atlantic, Funding Circle said it will fund loans to existing and new UK SMEs customers on behalf of the British Business Bank's coronavirus business interruption loans scheme (CBILS) and in the US will originate paycheck protection scheme (PPP) loans guaranteed by the US Small Business Administration.
The company will pause all non-CBILS lending from retail and institutional investors once it starts taking applications, which is expected within the next week.
However, the level of demand from either scheme “is not certain”, it stressed, nor how long they will last for.
British Business Bank chief executive Keith Morgan said: “Our accredited lenders have seen an incredible demand for CBILS since the scheme became available. As the first newly accredited marketplace lending platform to be accredited under CBILS, Funding Circle will be able to provide more capacity, more choice and most importantly, vital funding for smaller businesses across the UK.”
The group, which at the end of December had net assets of £319mln, including cash of £164.5mln, said it remained “focused on maintaining a substantial cash balance and anticipate only investing further cash in SME loans where necessRead More – Source