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iBusiness Funding snaps up Funding Circle’s US business for £33m

Funding Circle Sells US Business to iBusiness Funding: Key Points

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

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