Funding Circle has disposed of its loss-making United States business for £33 million.
The London-listed small business lender has reached an agreement with Florida-based iBusiness Funding and will now focus on its UK business.
The cash transaction includes all loan portfolios, which includes a £10m gain, before transaction costs.
In 2023, pre-tax losses at the company widened to £33.2m from £12.9m, caused in part by its expansion into the US.
It recently revealed plans to cut around 120 jobs to create “a simpler, leaner and better-positioned UK focused operation”.
“In March, I announced that we were simplifying the business by exiting the US and focusing on profitable growth in the UK business,” said CEO Lisa Jacobs.
“Alongside the UK restructuring actions announced in May, we are continuing to execute against this plan with the sale of the US business to IBF.
“The UK business is on track to be profitable in H2, in line with our guidance.”
Funding Circle Holdings plc’s share price has fallen from 440p at IPO in September 2018 to around 97p. The share price rose 13% in early trading today following news of the disposal.
“Over the last decade, our US team has played a significant role in getting finance to America’s small businesses and I want to thank them for all the commitment that they have shown to our customers,” continued Jacobs.
“We are pleased that in IBF, one of the leading SMB loan processors, we have found a partner that shares in our mission and we look forward to seeing the success of the combined entity in issuing SBA loans to businesses across the US.”
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