Funding Circle Partners With Nationwide in Mutual Referral Program
February 1, 2022
Denver-based small business lender Funding Circle announced a partnership with Nationwide Insurance, in a move designed to improve access to capital for businesses that use Nationwide as their insurance providers. The move is a continued trend in the small business financing industry to create access to resources surrounding business financing in places that merchants are interacting with on a daily basis.
“Funding Circle is thrilled to partner with Nationwide to offer essential resources that seamlessly supplement our customers’ business needs and set them up for success in a competitive market,” said Vipul Chhabra, Managing Director of Funding Circle US.
“This first-of-its-kind partnership with one of the country’s leading insurance and financial services providers embodies our core values,” said Chhabra. “[Our values are] to truly support American small business owners in accomplishing their goals, especially among underserved populations that banks typically are not incentivized to reach.”
On top of access to funding, the partnership offers access to resources surrounding small business financing to Nationwide customers. According to a press release by the companies, this is the first merger of a top insurance company with an online lending platform.
“Today’s hardworking business owners have a variety of insurance and financial needs. They are looking for innovative ways to have those needs met so they can focus on running their companies,” said Kasey Ketcham, Associate Vice President of Commercial Digital Enablement at Nationwide.
“This partnership with Funding Circle is another example of Nationwide’s commitment to addressing the challenges small business owners are facing,” said Ketcham. “[Nationwide is] offering expert guidance and comprehensive insurance and lending resources hand-in-hand to help them make informed decisions to fortify their business and livelihoods.”
According to Nationwide, the partnership will be a mutual referral program, where Funding Circle customers will be exposed to Nationwide products, and Nationwide customers will be exposed to Funding Circle products. Nationwide representatives explained the partnership exclusivley to AltFinanceDaily.
“Exactly what is provided through Nationwide.com or the app is a link to Funding Circle,” said a Nationwide representative. “Once there, the user can complete an application for loan coverage, but are not granted special exception because they came from Nationwide.”
“They would still go through the loan application and underwriting for funds and vice versa,” said the representative. “The Funding Circle website/app is providing a link to Nationwide that the user can ‘learn more’ through the Coverage Assistant page, or “get a quote” using Nationwide Business Express.”
Funding Circle Gets in to Buy-Now-Pay-Later (In UK)
September 2, 2021
Funding Circle is joining one of the trendiest markets in the industry right now, Buy-Now-Pay-Later (BNPL). The company will provide its customers with a way to spread supplier payments or invoice costs over 90 days by providing the capital upfront and allowing the borrower to pay later.
It has been dubbed FlexiPay by the UK-based lender and will enable access to between £3,000 – £50,000 of upfront capital. Loan eligibility will be determined in minutes and the funds will be available almost instantaneously, according to Funding Circle. This combination of small business lending with BNPL services is seemingly unprecedented to the industry.
“We are really excited to be using our market-leading technology to launch FlexiPay, which is designed to support small businesses to manage and control their cash flow,” said Lisa Jacobs, the Europe Managing Director of Funding Circle. “The new product enables businesses to buy now and pay later on any business spend in a way that suits them.”
The payment option will give access to “interest-free” financing to borrowers with a flat fee of 3% per invoice, without any annual charges or setup fees. Access to FlexiPay will not be given to new customers until the end of the year.
According to a source familiar with Funding Circle, the company could possibly bring the FlexiPay concept to the US once they’ve fully rolled it out in the UK.
Funding Circle US Originated $800M in 2020, More than 90% of Borrowers Were Making Payments
March 26, 2021
Funding Circle US revealed originations of £581M in 2020, equivalent to about $800M at current exchange rates. More than 90% of the company’s American borrowers were making full regular payments on their loans, Funding Circle reported. Approximately 7% were on a “payment holiday” at year-end or were not paying.
Funding Circle’s US loans generate low annual returns, its highest being a projected return of 4.1% to 4.9% for its 2016 cohort. Its 2020 cohort is projected to generate an annual return of between 1 – 3%.
Overall, Funding Circle reported a total net loss of £108.1M (approx $150M US) on just £103.7M in revenue, a massive loss that stemmed entirely from the first half of the year, attributed mostly to a write-down in “fair value.”
Funding Circle’s primary market is the UK. When comparing the market with the US, the company said that the US is in an earlier stage of development even though the market is 5x larger.
Funding Circle US Lays Off 120 Employees
July 9, 2020Funding Circle US laid off 120 employees yesterday, according to a post shared by Ryan Metcalf, Head of U.S. Regulatory Affairs and Social Impact.
Reuters reported that the company will also centralize its technology development in the UK rather than have a separate US team going forward.
The US operation had largely been focusing on PPP lending and SBA 7(a) loans since the shutdowns occurred.
The announcement coincided with its UK business being approved to participate in the Bounce Back Loan Scheme.
Funding Circle UK Referring Some Large Loan Applicants to Competitors
November 11, 2019Funding Circle UK has begun to refer applicants seeking an amount above their maximum loan size limit of £500,000 to Iwoca, MarketInvoice and French bank BNP Paribas, The Sunday Times reported. Previously, Funding Circle would just turn them away.
Funding Circle Originated $377M of US Loans in First Two Quarters of 2019
August 8, 2019Funding Circle originated $377M of loans in the US in the first six months of 2019, according to their latest public report. The company said that “growth was proactively controlled” and that they tightened higher risk band lending and increased prices. They’ve now loaned more than $2B cumulatively in the US since inception and their growth is being led by “new borrowers” that are being lured away from traditional lenders.
Funding Circle still lags behind PayPal, OnDeck, Kabbage, Square Capital, and Amazon in the US in loan origination volume, according to the AltFinanceDaily small business finance rankings. Its closest competitors by volume are BlueVine, National Funding, and Kapitus.
Funding Circle Co-Founder & Managing Director James Meekings to Step Down
August 8, 2019
Funding Circle’s lackluster business performance has led to a casualty. Co-founder James Meekings, who serves as Managing Director of the UK Business (the company’s primary market), will be transitioning to a non-executive role on the UK board in Q3. He will no longer be MD, the company announced.
Lisa Jacobs, Funding Circle’s Chief Strategy Officer, will take over leadership of the UK business, the company subsequently disclosed.
Funding Circle went public less than 1 year ago on the London Stock Exchange. Since then the share price has plummeted by 75%.
The company has been busy trying to correct course through various maneuvers, one of which has been to cut CEO Samir Desai’s annual compensation.
Funding Circle SME Income Fund to Consider Winding Down
April 6, 2019The Funding Circle SME Income Fund (FCIF), a fund whose objective is to provide shareholders with a sustainable and attractive level of dividend income by lending, both directly and indirectly, to small businesses through Funding Circle’s platform, may soon be winding down. Earlier this week, the fund’s major shareholders expressed a desire to withdraw their capital and a vote will be scheduled to put this plan in motion.
The decision is not a surprise. The fund suffered a sharp decline in Net Asset Value late last year in part due to increasing business loan defaults.
Funding Circle Holdings (FCH), which trades on the London Stock Exchange, announced that a windup of FCIF would not affect the overall company’s 2019 guidance.
FCH CEO Samir Desai said of the news, “A global income fund providing access to a diversified portfolio of Funding Circle small business loans was the right strategy for investors and Funding Circle in 2015. However, there are now more appropriate and varied ways for investors to participate on the platform. We’re pleased to soon introduce two new investor products to the UK market. They will further expand the universe of investors that can access loans on our platform and continue to diversify our sources of funding, in line with the strategy we set out at IPO.”
