Funding Circle winds down property lending
FUNDING Circle is winding down its property lending to refocus entirely on its original small- and medium-sized enterprise (SME) target market, the bread and butter of the UK economy.
The ‘big-three’ peer-to-peer lending platform announced on Monday afternoon that it will phase out its property funding by mid-2018, giving investors a last chance to buy into property development loans over the next 12 months.
The investment strategy overhaul was driven by the firm’s long-term goal to be the first port of call for small businesses looking to finance their growth, rather than by any dissatisfaction with property loan’s credit performance, the company said.
“It’s important to note that this decision is not related to credit performance of property development loans, which have outperformed expectations over the last three years and we expect this to remain the case,” said Funding Circle in a statement on its website.
Read more: Quarter of London SMEs turned down for credit
“Funding Circle’s long term goal is to become the first choice for small businesses here in the UK and across the world. By attracting thousands more businesses to the platform, we can offer you many more lending opportunities, allowing you to continue to earn an attractive, stable return.”
SMEs’ growing appetite for alternative finance in order to secure their future growth amidst Brexit-induced economic uncertainty represents a palatable opportunity for P2P platforms, as RateSetter’s recent decision to ramp up its business lending showed.
“Over the last year you have lent record-breaking amounts, with approximately £280m lent to small business borrowers in the first three months of 2017,” said Funding Circle. “We expect this trend to continue.”
Read more: P2P lending rises in January as Funding Circle hits £2bn milestone
