(“Funding Circle” or the “Company” or the “Group”)
Completion of the process to focus on UK operations
An agreement has been reached with iBusiness Funding to acquire Funding Circle’s American activities
LONDON, June 24, 2024 /PRNewswire/ — Following the announcement on March 7, 2024Funding Circle today announced that it has entered into an agreement to sell Funding Circle’s US operations to iBusiness Funding, LLC (IBF).
The transaction will involve a total of £33 million in cash[1] [2], for the US operations, including all loan portfolios, including a profit of £10 million, before transaction costs. Proceeds from the transaction will be assessed in accordance with our capital allocation framework.
Lisa Jacobssaid the CEO of Funding Circle “In March I announced that we were simplifying the business by exiting the US and focusing on profitable growth in the UK business. In addition to the UK restructuring measures announced in May, we continue to implement this plan with the sale of the US operations. to IBF The UK operations are on track to be profitable in the second half of the year, in line with our expectations. Over the medium term, we expect net profit growth of 15-20% CAGR with PBT margins of >15%.
Over the past decade, our US team has been instrumental in securing financing for America’s small businesses and I would like to thank them for all the commitment they have shown to our customers. We are pleased to have found a partner in IBF, one of the leading processors of small business loans, who shares our mission and we look forward to the combined entity’s success in providing SBA loans to businesses in the US. “
IBF is a leading provider of lending solutions for banks and lenders of all sizes, with a specialization in SBA lending. The company is committed to streamlining the business lending process so that lenders can efficiently deliver capital to small and medium-sized businesses. IBF has processed it $6 billion in SBA loans to date, and the team processes more than 1,000 business loan applications daily through its platform. It is a wholly owned subsidiary of Ready Capital Corporation (NYSE: RC).
Justin Levysaid IBF CEO: “We are excited to have Funding Circle US become part of IBF. Over the past decade, Funding Circle US has made a significant contribution to supporting America’s small businesses and together we will be able to accelerate progress to help even more businesses. I look forward to look forward to welcoming the team and continuing the important work of providing highly flexible and efficient financing solutions to America’s small businesses.”
Because the Ready Capital group already has an SBLC license, Funding Circle, with permission from the SBA, surrendered its SBLC license. The transaction is expected to close at the end of June.
Funding Circle will announce the results for the first half of 2024 September 5, 2024.
Contacts:
Financing circle:
Investor Relations: ir@fundingcircle.com
Tony Nicol
Media relations: press@fundingcircle.com
Angeli Everitt
Landgraaf Consultancy +44 (0) 20 3805 4822
Mike Smith / Stephen Malthouse
press@fundingcircle.com
About financing circle:
Funding Circle (LSE: FCH) is the UK’s leading SME lending platform. Its mission is to build the place where small businesses get the financing they need to win. Funding Circle gives small businesses access to financing and offers an unparalleled customer experience, powered by data and technology. For institutional investors, Funding Circle offers access to an alternative asset class in an underserved market with robust and attractive returns. Funding Circle has provided more than £16 billion in loans to approximately 150,000 companies worldwide.
About iBusiness financing:
IBF is a leading provider of lending solutions for banks and lenders of all sizes, with a specialization in SBA lending. The company is committed to streamlining the business lending process so that lenders can efficiently deliver capital to small and medium-sized businesses. IBF has processed it $6 billion in SBA loans to date, and the team processes more than 1,000 business loan applications daily through its platform.
[1] Total cash consideration subject to net worth adjustment at closing.
[2] The transaction constitutes a Class 2 transaction under the UK Listing Rules. Funding Circle US had gross assets of £89 million at the time December 31, 2023. The US company contributed a £(23) million loss to the overall group in 2023, although it reported a statutory pre-tax profit of £7 million for the year ended December 31, 2023.