Funding Circle slashes forecasts
The peer to peer lending platform Funding Circle has cut its forecast revenue growth from 40% to 20% for 2019. The announcement comes after its Stock Exchange launch last October, and has caused a 29% drop in its share price.
Funding Circle provides loans to small businesses both in the UK and US, but demand has dropped recently. This is reputedly because of reducing confidence in small businesses in both countries:
- UK businesses are struggling with the continued uncertainty around Brexit.
- In the US, they’re worried about a trade war and a possible reduction in interest rates.
Funding Circle’s Chief Executive, Samir Desai, said ‘The uncertain economic environment has reduced demand from small businesses and led us to proactively tighten lending criteria. As a result, revenue growth will be impacted. We recognise that this is a change from our previous guidance, but we are taking the prudent course of action for the long-term growth and development of our business.’
It’s thought that the impact of the tightened lending criteria will be felt predominantly by newer businesses, but there are still options available.
Alternative Finance could help, particularly for non-tangible purchases. This market is growing rapidly and the landscape looks very different now even compared to two years ago. There are key things to consider about the type and source of these types of finance though, to ensure your potential source of funds is properly regulated, for example. You can find out more here.
If you’re looking for finance for your business, get in touch to find out more about how we can help.
You can find out more about this story here: https://www.theguardian.com/money/2019/jul/02/funding-circle-brexit-small-businesses