("Funding Circle" or the "Company" or the
"Group")
Completion of process to focus on UK business
Agreement reached with iBusiness Funding to acquire Funding
Circle's US business
LONDON, June 24,
2024 /PRNewswire/ -- Further to the announcement on
7 March 2024, Funding Circle today
announces it has entered into an agreement for the sale of Funding
Circle's US business to iBusiness Funding, LLC (IBF).
The transaction will be for a total cash consideration of
£33m[1] [2], for the US business including all loan portfolios,
which includes a £10m gain, before transaction costs. The
proceeds from the transaction will be reviewed in line with our
capital allocation framework.
Lisa Jacobs, Funding Circle CEO,
said "In March, I announced that we were simplifying the
business by exiting the US and focusing on profitable growth in the
UK business. Alongside the UK restructuring actions announced in
May, we are continuing to execute against this plan with the sale
of the US business to IBF. The UK business is on track to be
profitable in H2, in line with our guidance. Over the medium term
we expect net income growth of 15-20% CAGR with PBT margins of
>15%.
Over the last decade, our US team has played a significant
role in getting finance to America's small businesses and I want to
thank them for all the commitment that they have shown to our
customers. We are pleased that in IBF, one of the leading SMB loan
processors, we have found a partner that shares in our mission and
we look forward to seeing the success of the combined entity in
issuing SBA loans to businesses across the US."
IBF is a leading provider of lending solutions for banks and
lenders of all sizes with a specialisation in SBA lending. The
company is dedicated to streamlining the business lending process
to allow lenders to efficiently deliver capital to small and
medium-sized businesses. IBF has processed over $6 billion in SBA loans to date, and the team
processes over 1,000 business loan applications through its
platform daily. It is a wholly owned subsidiary of Ready Capital
Corporation (NYSE: RC).
Justin Levy, IBF CEO, said:
"We are delighted for Funding Circle US to become part of IBF. Over
the last 10 years, Funding Circle US has made a significant
contribution to supporting US small businesses and together we will
be able to accelerate progress to help even more businesses. We
look forward to welcoming the team and continuing the important
work of providing highly flexible and efficient funding solutions
to US small businesses."
As the Ready Capital group already holds an SBLC license,
Funding Circle has, with SBA consent, surrendered its SBLC license.
The transaction is expected to close by the end of June.
Funding Circle will announce H1 2024 results on 5 September 2024.
Contacts:
Funding Circle:
Investor
Relations: ir@fundingcircle.com
Tony Nicol
Media Relations: press@fundingcircle.com
Angeli Everitt
Headland Consultancy +44 (0) 20 3805 4822
Mike Smith / Stephen Malthouse
press@fundingcircle.com
About Funding 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 funding they need to win. Funding Circle enables small
businesses to access funding – offering an unrivalled customer
experience powered by data and technology. For institutional
investors, Funding Circle provides access to an alternative asset
class in an underserved market with robust and attractive returns.
Globally, Funding Circle has extended more than £16bn in credit to
c.150,000 businesses.
About iBusiness Funding:
IBF is a leading provider of lending solutions for banks and
lenders of all sizes with a specialisation in SBA lending. The
company is dedicated to streamlining the business lending process
to allow lenders to efficiently deliver capital to small and
medium-sized businesses. IBF has processed over $6 billion in SBA loans to date, and the team
processes over 1,000 business loan applications through its
platform daily.
[1] Total cash consideration subject to net asset adjustment at
closing.
[2] The Transaction constitutes a Class 2 transaction under
the UK Listing Rules. Funding Circle US had gross assets of
£89m as at 31 December 2023. The US
business contributed losses of £(23)m to the overall Group in 2023,
although reported a statutory profit before tax of £7m for the year
ended 31 December 2023.
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