Slides
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June 2025 Capital Markets Day
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Welcome 2 Lisa Jacobs Chief Executive Officer
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Customers & brand The UKʼs leading online SME lender SMEs across the UK ● 10 years trading ● 7 employees ● £1 million in revenue Customer NPS of 79 Products Borrow, pay later & spend ● Term Loans ● FlexiPay ● Cashback Credit Card ● Marketplace Referrals) Funding Capital light funding model ● 96% LuM funded by institutions Term Loans) ● 4% LuM funded by FC FlexiPay & CC; R&D Attractive and resilient returns Platform capabilities Unique tech and credit: ● Proprietary tech platform ● AI powered risk models ● 15 yrs of data
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Leading UK online SME finance platform with attractive growth and profitability Pay later Monthly Borrow Longer term Spend Daily Large and underserved market Data & tech competitive advantage Robust and attractive loan returns Delivering superior customer experience FY2024 Credit extended £1.9bn 47% YoY Revenue £160m 23% YoY PBT £3.4m FY 2026 Revenue > £200m PBT at least £30m £15bn credit extended to SMEs since 2010
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5 Our customers, brand and term loans Alexander Allen Term Loans MD & Chief Customer Officer
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Large addressable market across our full product suite Borrow 5.4m SMEs in the UK £84bn+ SME debt origination market A significant growth opportunity as we continue to expand to serve more SMEs Supporting underserved UK SMEs to fuel jobs and economic growth Pay later & spend £1.3trn SME B2B payments £80bn+ SME card transactions of SMEs say that late payments from customers are a problem65%
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Best known brand for SME lending outside of the high street banks, with leading customer NPS 79 Why did you choose FC for your finance needs? NPS = 79 Unprompted Brand Awareness excl main high street banks, February 20241 1. Source: 1 Funding Circle Brand Tracker. February 2024 502 respondents Q15. When you think about business loan providers that arenʼt banks, which brands can you think of?
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This has been supported by sponsorship of Premiership Rugby, driving brand engagement Video content hitting 20m views Brand ambassador 2023/2024
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Intermediaries We go-to-market direct to SMEs and via intermediaries; performance marketing is via direct mail, online and email NACFB Unsecured Funder of the Year 2019, 2020, 2021, 2022, 2023, 2024 Direct to customer
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Our multi-product offering enables SMEs to borrow, pay later and spend, powered by proprietary technology Borrow Term Loan Loan for long term investment purposes to support business growth or working capital and shorter term finance needs Pay later FlexiPay Line of Credit Flexible line of credit for paying bills, supplier invoices and managing short term cash flow using bank transfer or card Spend Cashback Credit Card Cashback credit card for everyday business spending
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Borrow: market leading Term Loan for investment and working capital Available from six months to six years. Amortises monthly, repayable anytime with no fee Loans to support business growth or long-term cash flow management. Loan size of £10,000 to £750,000 (average about £75K Use cases: long-term investment or working capital Typical borrower business is 10 years old, revenue £1M and 7 employees
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Growing our Term Loan products over the last 15 years, continuing to innovate and adapt to serve more SMEs Launch of Funding Circle Expanded to £750K Term Loans [£] Accredited BBLS and CBILS provider GGS Debenture Loans Credit Builder Marketplace Term Loans (to £750K Marketplace Term Loans (to £500KTerm Loans (to £50K Covid Loans BBLS and CBILS Marketplace Term Loans Credit Builder RLS 3 Marketplace Term Loans Shorter Term Loans GGS Credit Builder Debenture Loans Marketplace Term Loans (to £750K Cumulative Originations £4.6bn £8.3bn £12.4bn £13.8bn - 2010 2023 2024 2018 2020 2025
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Asset Finance (via Marketplace) Our Term Loan products serve a range of customer needs enabling us to support even more SMEs Investment & Working Capital
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14 FlexiPay & Credit Card businesses Jerome Fernandez FlexiPay and Credit Card MD
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We have evolved our products to help our SME customers solve their problems Test launch Card beta launch Unified FlexiPay experience £4m spend £60m spend £234m spend Pay and spend £492m spend Mobile / Web app One Line of Credit Card Payments Invoice Payments Card Payments Invoice Payments Invoice Payments Pay: FlexiPay Pay now/later at transaction level Spend: Cashback Credit Card Everyday Business payments 2021 2022 2023 2024
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Pay Later: FlexiPay, empowering our customers to pay on their terms £1bn+ Transactions to date Repayments available across 1, 3, 6, 9 or 12 monthly instalments Pay by card, transfer funds to a supplier or drawdown straight into a business bank account. Avg. credit limit of £16k A simple, flat fee per transaction starting from just 1.99%, with no interest charges, monthly costs, or annual product fees Diversified use cases. HMRC, Bank transfer, Supplier Payments. Average transaction size £34k
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Simple, fast and easy: how FlexiPay works FlexiPay is a brilliant idea which will help bridge the gap between supplier payments and to negotiate better with my suppliers. The application was simple and easy. “ Itʼs a great back up when there is a large outgoing like VAT to pay. It helps us to pay for stock orders and keeps the continuity of our business cash flow steady. “ I signed up to FlexiPay as I had a payment due to a supplier and it allowed me to buy extra supplies which I needed. It is really clear how repayments work and how much I owe. “
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Spend: Cashback Credit Card enabling SMEs to earn whilst they spend Earn up to £2,000 with 2% for the first 6 months, plus 1% uncapped cashback on everything you spend after that APRs starting from 14.9%. No interest for up to 42 days. Avg. credit limit of £15k Zero monthly fees, no hidden costs and no need to switch your business banking
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End of month balances by cohort £1.3trn SME B2B payments £80bn SME card spend 2 out of 3 SMEs Customers demonstrate sticky, repeat behaviour The opportunity is vast We are solving a meaningful problem And our customers love it And we are really just getting started say cash flow is their biggest issue
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20 How we underwrite and manage credit risk Belkacem Krimi Chief Risk Officer
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How we risk assess businesses using advanced analytics and in-house expertise 6 minutes 77% instant decision Remaining applications Online application Algorithmic credit risk assessment Combination of algorithmic and expert credit assessment Data set Alternative Data Internal Performance Data set Data set
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2222 Competitive edge driven by rich proprietary data, credit risk expertise and continued model evolution Our performance data so far 150,000 228,000 Term loans FlexiPay transactions Our risk analytics delivers a competitive edge ● 15 years of public & proprietary data ● Predictive AI (machine learning) tools and approaches ● Experienced credit risk team ● Data gets richer every day On ninth generation risk model ● >15% relative uplift in Gini vs Gen 8 ● Benefits from COVID period validating effectiveness in a stressed environment Flexible Decision platform
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23Instant decisions 23Instant decisions • Compared to the UK bureau score, our model achieves 3 times greater separation between low- and high-risk borrowers • This supports more accurate lending and pricing decisions, resulting in a credit underwriting and commercial advantage Default rates (by quintiles) Risk Band Bureau Funding Circle Highest Risk 1 10.8% 14.4% 2 8.8% 8.5% 3 6.0% 6.1% 4 4.7% 3.6% Lowest Risk 5 3.9% 1.6% x9 risk differentiation X2.8 risk differentiation Source: Funding Circle internal performance data as of Q4 2024 for Term Loans originations. Consists of originations made in Q2 2022 to Q3 2023. Our models deliver 3x better risk discrimination than the bureau score Funding Circle Model 3x more powerful than Bureau Model
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* Source: https://www.gov.uk/government/statistics/company-insolvencies-march-2025 Our loss coverage is 2.5x Higher than historic peaks of business insolvency * And we have strong portfolio management in place Well positioned to weather cycles and deliver positive through the cycle returns to investors Net ReturnsNet Losses Losses would need to increase 2.5x before investors lose money 2x 1.5x 1.5x Advanced portfolio monitoring & stress-testing Skilled & flexible capacity Fair & bespoke treatment of special situations Continuous quality assurance 2.5x
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Annualised net returns by cohort after servicing fees and bad debt Two year weighted average swap rate 1 25 5% Annualised net returns, above cost of capital, to institutional investors Track record of delivering robust and attractive loan returns £2.1bn Future funding in place (as of March 2025 ¹ Year-end 2024 expected returns are as at point of origination
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26 Technology, Data & AI Greig McEwan Chief Technology Officer
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Our proprietary Technology & Data platform has been built for speed, ease and scale AI Powered risk modelsVersatile, modular platform Scalable and secure cloud infrastructure Highly flexible front end Proprietary data and models Multi-product Designed to scale and launch new products 4x Growth in mobile MAU 100% Growth in transactions* Multi-product Expansion of product portfolio Delivering speed and ease for our customers 6 min Application time 77% Instant decisions * 2023 comparison
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Continuous focus on delivering a superior customer experience and enabling faster access to funds FlexiPay & Credit Card Term Loans 2x increase FlexiPay & Credit Card applications processed straight through* 30 mins FlexiPay record from application to first payment Ensuring Borrowers get their money faster ● Post offer check automation ● Digitised document processing * 2024 comparison
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Live Co-pilot for Software Engineering GenAI access for every team member Future Core process automation Enriched knowledge access Enhance customer experience Live Customer sentiment analysis Testing GenAI enabled Sales interactions Enhanced Underwriting process Future Tailored customer experiences Live Product and feature prototyping Multiple proof of concept ideas Future Identification of further use-cases across the business Improve efficiency and enhance productivity Foster business and product innovation We are using GenAI to improve productivity, enhance customer experience and drive innovation
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Protecting Funding Circle and Customer data in an ever evolving threat landscape ● Comprehensive multi-layered protection ● Internal expertise ● 24h Security Operations Centre SOC ● Industry leading tooling ● Security awareness programme ● Continuous threat landscape monitoring ● Robust and proactive risk management
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31 The view from the debt investor Dipesh Mehta Chief Capital Officer
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Capital light funding model Funders UK Small Businesses Institutional Investors ● 96% of LuM ● Fund Term Loans ● £2.1bn future funding in place Funding Circle ● 4% of LuM ● Funds FlexiPay and Cashback Credit Card ● £300m financing facility from Citi in place £2.8bn Loans and Balances Under Management (“LuM”) Term Loans FlexiPay Cashback Credit Card £15bn Credit Extended to UK Small businesses since 2010 Marketplace
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A strong track record in delivering investor returns First loan originated 2010 2013 2014 2017 2020 2021 2022 2024 BBI Commences lending First Institutional Lender Full FCA authorisation CBILS accreditation Flexipay Launch Re-start full commercial lending CashBack Card launched Over 150 institutional investors have supported the funding of UK SMEs v Strong investor brand with extensive experience structuring & executing transactions Facilitated 9 public securitisations on behalf of investors totaling almost £2.2bn
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Key messages • Great customer experience and brand awareness with a differentiated product offering • Product innovation and growth in large markets • Unique technology and credit assessment capabilities that continually learn and evolve • Attractive and resilient investor returns with a strong funding pipeline • Improving profitability and strong ongoing growth with significant market opportunity
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Business finance that backs you Thank you.