P2P Lending: Funding Circle Plans to Stop Property Development Loaning

Peer-to-peer (P2P) lending platform, Funding Circle, has revealed plans to cease all property advancement lending by mid-2018.

The decision will enable the company to concentrate assets on its core independent lending product in the UK, US, Germany, and the Netherlands.

Funding Circle will keep on servicing existing property credits and meet facilities to which it has already dedicated throughout the following 12 to 18 months.

Samir Desai, CEO and co-founder of Funding Circle, stated: “While delivering attractive returns to our investors, property development lending represents a small and diminishing share of [circa] 5% of our global revenue, and is available to borrowers in only one of our international markets.

“[This decision] will allow us to extend our small business lending product to more international markets in due course.”

Funding Circle expressed its property loans keep on outperforming expectations from a credit risk point of view, producing a 7% return every year and £22m of profit for investors since 2014.

James Meekings, UK MD and co-founder of Funding Circle, included: “We are proud of what we have achieved to date.

“Since we launched property development finance in 2014, small developers have built thousands of homes across the country.

“We have taken this decision because we are absolutely focused on making Funding Circle the first choice for small business loans globally.”

Earlier this year, Funding Circle effectively brought roughly £82m up in equity capital.