Funding Circle Sells US Business to iBusiness Funding: Key Points
- Sale Details:
- Funding Circle has agreed to sell its US business to iBusiness Funding for £33 million.
- The deal includes the entire US loan portfolio, generating a £10 million gain before transaction costs.
- The transaction is expected to close by the end of June, with Funding Circle surrendering its US Small Business Lending Company (SBLC) license.
- Reason for Sale:
- Funding Circle’s US division contributed to £23 million in losses in 2023.
- CEO Lisa Jacobs indicated the business required significant cash and capital for growth, which was not seen as the best course of action for the Group.
- Company Background:
- Funding Circle has operated in the US since 2013, in partnership with Endurance Lending Network.
- Announced earlier this year in the company’s 2023 financial results.
- Financial Strategy:
- Funding Circle will review the sale proceeds in line with its capital allocation framework.
- The company is also implementing a £15 million savings plan, cutting around 120 roles to streamline its UK business.
- iBusiness Funding Overview:
- Operates under Ready Capital Corporation, specializing in SBA-guaranteed loans.
- Processes over 1,000 business loan applications daily and has processed over $6 billion in SBA loans since 2013.
