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Funding Circle to exit property loans
Funding Circle have announced that they are to exit property loans by mid 2018. Funding Circle state the reason for this is to focus on their core product of small business lending.
Lenders on the P2P independent forum were disapointed with this development as a number of them had focused exclusively on property loans.
Its a shame , it worked OK for me. I suppose that FC must know their business though & some of the borrowers must have taken liberties. I wonder how soon it will become apparent where the business will drift away to , if it does.
This may have a positive effect on Lendy (formerly Saving Stream) who have focused on property loans in recent years.
Here is the statement on the Funding Circle blog:
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. To meet this goal, we have taken the decision to focus on our core small business lending product in the UK and our other markets and will scale down new property development lending, expecting to stop all lending by mid-2018.
We are proud of the lending we have facilitated to small developers since 2014. The borrowers you have lent to have built thousands of homes and credit performance has been strong; loans have generated a 7% annual return* (as of 10th April 2017) and you have earned more than £22m in interest.
By focusing on our core product you will be able to help thousands more small businesses to access finance and grow. 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. We expect this trend to continue.
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.
We will continue to work on your behalf to service all existing property development loans. There will still be opportunities for you to lend to experienced property professionals over the next 12 months.