iBusiness Funding snaps up Funding Circle’s US business for £33m
Small business lending platform Funding Circle has entered into an agreement to sell its US business to iBusiness Funding, a software and lending service provider based in Fort Lauderdale, Florida, for £33 million.
Funding Circle’s US business sold to iBusiness Funding
The deal includes the division’s entire loan portfolio, which Funding Circle says “includes a £10m gain” before transaction costs.
Funding Circle adds it will review the proceeds of the sale “in line with our capital allocation framework” and expects to close the transaction “by the end of June”. The company also plans to surrender its US Small Business Lending Company (SBLC) licence.
The planned sale of the division – which Funding Circle has operated since 2013 in partnership with San Francisco-based Endurance Lending Network – was first announced by CEO Lisa Jacobs earlier this year in the company’s full year financial results for 2023.
The results, published 7 March, showed that the US business contributed to losses of £23 million for Funding Circle in 2023.
Jacobs said in the results that while the business “offers attractive long-term growth”, it also required “a significant amount of cash and capital to grow”, and therefore “we don’t believe that this is the best course of action for the Group”.
Earlier this month, the company also announced it was cutting around 120 roles within its workforce as part of a £15 million savings plan to simplify and streamline its UK business.
The US division’s new owner, iBusiness Funding, operates under Ready Capital Corporation and specialises in providing lending solutions for loans guaranteed by the Small Business Administration (SBA) in the US.
SBA loans are specifically tailored for enterprises that may not qualify for traditional commercial loans. iBusiness Funding claims to process over 1,000 business loan applications daily, and to have processed over $6 billion in SBA loans since its inception in 2013.
