Property finance

Funding Circle to stop property development lending

Peer-to-peer lending platform Funding Circle has announced plans to stop all property development lending by mid-2018.

The decision will allow the company to focus resources on its core small business lending product in the UK, US, Germany and the Netherlands.

Funding Circle will continue to service existing property loans and meet facilities to which it has already committed over the next 12 to 18 months. 

Samir Desai, CEO and co-founder of Funding Circle, said: “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 stated its property loans continue to outperform expectations from a credit risk perspective, generating a 7% return each year and £22m of earnings for investors since 2014.

James Meekings, UK MD and co-founder of Funding Circle, added: “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 successfully raised approximately £82m in equity capital.

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