UK-based lending platform Funding Circle has announced its agreement with iBusiness Funding to sell its US business for nearly GBP 33 million cash consideration. Following an initial announcement from March 2024, Funding Circle entered into an agreement to sell its US business to iBusiness Funding for a total cash consideration of GBP 33 million, including all loan portfolios, which comprise a GBP 10 million gain, prior to transaction costs.

In addition, the proceeds from the transaction are set to be reviewed in line with Funding Circle’s capital allocation framework, with the acquisition being expected to close by the end of June 2024. Why did Funding Circle decide to sell the US business? According to Funding Circle’s officials, in March, the company announced its plans to simplify its business by exiting the US and focusing on profitable expansion in the UK business. Funding Circle intends to continue to execute this strategy with the sale of the US business to iBusiness Funding, whilst maintaining a profit in the second half of 2024 for its UK operations.

Additionally, the company projects over the medium term a net income growth of nearly 15-20% CAGR with PBT margins of less than 15%. Funding Circle mentioned that iBusiness Funding shares its commitment and intends to support the combined entity in issuing SBA loans to businesses across the US. Moreover, iBusiness Funding, a provider of lending solutions for banks and lenders of all sizes with a specialisation in SBA lending, is committed to simplifying the business lending process to enable lenders to provide capital to small and medium-sized enterprises (SMEs). Representatives from the company underlined that considering that Funding Circle US played a significant part in assisting SMEs in their operations, the current announcement focuses on accelerating this progress and supporting more businesses.

Funding Circle’s team is set to become part of iBusiness Funding, with the firm planning to continue to provide flexible and efficient funding solutions to US-based SMEs. .