Funding Circle Holdings PLC (LON:FCH) said more small businesses are turning to its peer-to-peer lending model as a result of the Coronavirus (COVID-19) pandemic.
The company moved into profit on an adjusted underlying earnings (AEBITDA) basis in the second half of 2020 and expects to remain in profit henceforth.
Loans under management in 2020 rose 13% to a record £4,214mln from £3,731mln in 2019.
Total income rose 25% to £222mln in 2020 from £177.3mln but adjustments of £118.3mln (2019: £9.9mln) for bad debts meant that net income fell by 38% to £103.7mln from £167.4mln the year before.
AEBITDA was negative at £63.8mln in 2020, compared to a loss of £27.5mln the year before. The loss before tax widened to £108.1mln from £84.2mln the previous year.
“We exceeded previous guidance and delivered £20 million of AEBITDA profit in the second half of 2020. This is a milestone for the business and we expect to continue to be AEBITDA profitable going forward,” said Samir Desai, the chief executive officer and founder of Funding Circle.
“Our machine learning and technology platform is transforming the small business borrowing experience with instant decisions for 50% of applications. Average loan applications are completed in six minutes and decisions follow in just nine seconds, providing borrowers with an unmatched experience. In the next 12 months we will use this technology to launch new products to help solve more small business funding problems,” Desai said.
Shares in Funding Circle were up 1.9% at 149.6p.