Funding Circle shares (LON: FCH) fell over 6% on Wednesday on the group’s half-year results.
The lender revealed an operating loss of £113.5m for the six months to 30 June, compared to the £31.3m loss it recorded for the same period a year earlier.
“Early Covid-19 trends suggest a permanent change in the SME borrowing market that we believe will benefit Funding Circle in the medium to long term,” said Funding Circle.
“Government support has demonstrated the strategic importance of small businesses to economic growth. A higher proportion of SMEs are now accessing finance as a result and we believe this is likely to continue in the future.”
Samir Desai CBE, CEO and Founder, said: “We started Funding Circle after the financial crisis to help small businesses access funding, and we are proud that since becoming accredited to SME government guarantee programmes in the UK and US, we have approved more than £2 billion of loans, and are the 5th largest CBILS lender with c.20% market share of loans approved.”
“We believe that Covid-19 has led to an acceleration in the adoption of online small business lending and small businesses are increasingly drawn to the unique Funding Circle model, which provides access to finance in a fast and affordable way with excellent customer service. Our Instant Decision lending technology launched this year is already transforming the SME borrowing experience with average loan applications being completed in 6 minutes, and decisions in 9 seconds.
“Our advanced data driven credit assessment and the actions we have taken are protecting investor returns – after applying our central Covid-19 stress scenario, we expect all cohorts in the UK to deliver positive annualised returns to investors,” he added.