Funding Circle Holdings, the London-listed small-business lending platform, reported a sharp jump in first-half profit on Thursday, with pretax earnings nearly quadrupling and revenue rising by half as its FlexiPay spending product moved from a side bet to a core growth engine. The unaudited trading update for the six months to 30 June 2026 landed before the London market opened and reinforced a turnaround that has taken the company from a pandemic-era peer-to-peer lender in retreat to a leaner, cash-generative platform that hit its full-year revenue target a year early.
The company said revenue rose 50% to about £138 million (roughly USD 186 million at a rate of about USD 1.35 to the pound) and profit before tax reached about £23 million, up from £6 million a year earlier. Assets under management grew to £3.3 billion and the group extended £1.7 billion of new credit in the half. Chief executive Lisa Jacobs called it “another standout six months,” according to the company statement, while flagging that management remains “mindful of the broader economic environment” heading into the back half of the year.
In short
- Revenue up 50%: Funding Circle posted about £138 million of first-half revenue (about USD 186 million), up from £92 million a year earlier, per the company’s unaudited trading update.
- Profit nearly quadrupled: pretax profit reached about £23 million (about USD 31 million), against £6 million in the same period of 2025.
- FlexiPay is the growth story: transactions across FlexiPay and the business card jumped 71% to £640 million (about USD 864 million), the fastest-growing part of the group.
- Cash and buybacks: unrestricted cash rose to £136 million and the company has now returned £72 million through buybacks, equal to about 18% of its share capital.
- Guidance intact: Funding Circle reaffirmed full-year targets of at least £235 million revenue and at least £35 million pretax profit, with full results due on 8 September 2026.
Funding Circle’s record first half: the headline numbers
The update, released as a regulatory statement to the London Stock Exchange and distributed over the newswires, covered the six months to 30 June 2026. Every headline metric moved in the same direction: up. Revenue of about £138 million was 50% higher than the £92 million recorded in the first half of 2025, and pretax profit of about £23 million compared with just £6 million a year earlier, a swing that lifted the pretax margin from the mid-single digits to roughly 17%.
Group assets under management climbed to £3.3 billion from £2.8 billion, and total credit extended across the platform rose to £1.7 billion from £1.1 billion. The company framed the half as evidence that its two-engine model, established term loans plus fast-growing short-term spending products, can compound growth while widening margins. Management reaffirmed guidance rather than raising it, a cautious note that sat alongside the upbeat operating figures.
The timing of the update carried its own message. Funding Circle chose to publish a trading statement ahead of its full interim results, a practice usually reserved for companies confident that the numbers are strong enough to preview. That confidence has been earned over several halves of improving performance, and it stands in contrast to the position the company occupied only a few years ago, when investors questioned whether the platform could ever produce consistent profit at scale.
The table below sets out the core first-half comparison, with sterling figures as reported and approximate dollar equivalents at a rate of about USD 1.35 to the pound. All 2026 figures are unaudited.
| Metric (H1) | H1 2026 | H1 2025 | Change | Approx. USD (2026) |
|---|---|---|---|---|
| Revenue | £138m | £92m | +50% | ~$186m |
| Profit before tax | £23m | £6m | +283% | ~$31m |
| Credit extended | £1.7bn | £1.1bn | +55% | ~$2.3bn |
| Assets under management | £3.3bn | £2.8bn | +18% | ~$4.5bn |
| Unrestricted cash | £136m | £101m* | +35% | ~$184m |
*Unrestricted cash comparison is against the 31 December 2025 balance, as reported by the company.
Inside the numbers: revenue, profit and margins
The quality of the profit matters as much as its size. A year ago Funding Circle was still proving that its restructured business could convert revenue growth into durable earnings. The first half of 2026 answers part of that question: revenue grew 50% while pretax profit grew far faster, the signature of a platform with high operating leverage and costs that no longer scale one-for-one with lending volume.
Where the operating leverage comes from
Funding Circle earns fees for originating and servicing loans rather than holding most credit risk on its own balance sheet for the long term. Once the technology, credit models and servicing infrastructure are built, additional origination flows through to profit with limited extra cost. That is why a 50% revenue gain produced a near-quadrupling of pretax profit, and why management has been able to guide to expanding margins even as it invests in newer products.
A cautious tone on guidance
Despite the strong print, the company chose to reaffirm full-year guidance of at least £235 million revenue and at least £35 million pretax profit rather than upgrade it. That restraint reflects two realities: the typical summer slowdown in small-business borrowing, which the company said began to normalize demand in the second quarter after a strong first quarter, and a wider macro picture that management described as one to stay mindful of. Reaffirming, not raising, is a deliberate signal that the second half carries more uncertainty than the first.
How the profit compares with 2025
For context, Funding Circle reported full-year 2025 revenue of about £204 million, up 28%, and pretax profit of about £20 million, and it told the market in March that it had reached its 2026 revenue target a year ahead of plan. The first-half 2026 numbers show that momentum accelerating rather than fading, with the growth rate stepping up from 28% for the full prior year to 50% in the latest half.
That acceleration is notable because it comes without a corresponding surge in costs. When the full-year 2025 figures were published, Funding Circle shares rose sharply as investors recognised that the company had reached an inflection point where each new pound of lending was worth more to the bottom line than the last. The half-year update extends that story rather than resetting it, which is why the reaffirmed guidance looks conservative against the run-rate implied by a £23 million first-half profit.
Term Loans: the engine behind the profit
The larger of Funding Circle’s two businesses remains Term Loans, the multi-year lending product it offers to established small and medium-sized enterprises. Originations in this segment rose to £1,050 million from £736 million a year earlier, and segment assets under management reached £3.0 billion, up from £2.7 billion. Term Loans is the ballast of the group: larger, more mature and the primary source of servicing income.
Forward-flow funding is doing the heavy lifting
Crucially, Funding Circle has shifted the funding of these loans onto institutional balance sheets through forward-flow agreements, in which banks and asset managers commit in advance to buy loans the platform originates. The company said it signed two new forward-flow agreements worth £900 million (about USD 1.2 billion) in the half. That structure lets the platform grow originations without tying up its own capital, converting Funding Circle from a balance-sheet lender into something closer to a loan marketplace that earns fees for matching borrowers with institutional capital.
Why the marketplace model de-risks growth
The forward-flow model is the single most important reason the company can grow lending and profit at the same time while holding cash. Because institutional buyers absorb most of the credit, Funding Circle’s earnings are less exposed to a downturn in loan performance than a traditional lender’s would be. The trade-off is a reliance on institutional appetite: if banks pull back on forward-flow commitments, origination growth would slow. For now, the £900 million of new agreements suggests that appetite is intact.
FlexiPay and the business card: embedded finance takes off
If Term Loans is the ballast, FlexiPay and the associated business card are the sail. Transactions across the two products jumped 71% to £640 million (about USD 864 million) from £375 million a year earlier, and segment assets under management nearly doubled to £300 million from £169 million. FlexiPay lets small businesses spread the cost of a payment over instalments or tap a flexible credit line, while the linked card extends that spending power to everyday purchases.
Business BNPL, not consumer BNPL
FlexiPay sits in the fast-growing category of buy-now-pay-later applied to businesses rather than shoppers. The mechanics echo consumer instalment products, but the customer is a small firm managing cash flow, invoices and supplier payments. That distinction matters for risk and regulation alike. Consumer buy-now-pay-later is moving into a stricter supervisory regime, as seen when the UK’s Financial Conduct Authority began regulating buy now, pay later this month, whereas business lending of this kind falls under a different, generally lighter framework. The wider shift in instalment credit is also visible in how buy-now-pay-later is expanding beyond the classic pay-in-four format toward larger balances and longer terms.
Funding the flexible-spending book
To support FlexiPay’s growth, Funding Circle has secured a £400 million funding facility that includes an equity component, provided in partnership with a major global bank, according to the company. That external funding line is the FlexiPay equivalent of the term-loan forward-flow structure: it lets the product scale transaction volume without consuming the group’s own cash. The parallel with deposit-hungry fintech rivals is instructive; where some buy-now-pay-later firms have pursued banking licences to fund their books with cheap deposits, as Klarna did when it filed for a US bank charter, Funding Circle has leaned on wholesale funding facilities instead.
Why the 71% growth rate stands out
A 71% rise in transaction volume is the kind of figure that reshapes a company’s narrative. FlexiPay and the card are still small next to Term Loans, but they are growing more than twice as fast, and their assets under management nearly doubled year on year. If that trajectory holds, the flexible-spending segment will become a materially larger share of group revenue within a couple of years, giving Funding Circle a second high-growth leg and a daily, transactional relationship with its small-business customers rather than an occasional lending one.
The strategic logic is that a business which touches a customer only when it needs a multi-year loan has a thin relationship, while one whose card and flexible-credit line are used every week is embedded in the customer’s daily operations. That embeddedness is valuable: it lowers the cost of acquiring the next loan, generates recurring transaction data that sharpens credit decisions, and raises the switching cost for the small business. FlexiPay is therefore not just a growth line, it is a defensive moat around the wider lending franchise.
How Funding Circle stacks up against UK fintech peers
Funding Circle’s results land in a UK fintech cohort that has spent 2026 proving it can turn scale into profit. The comparison is not perfectly like-for-like, since these firms operate in different niches, but the through-line is a maturing sector where volume growth, margin discipline and shareholder returns are now the shared benchmarks. Wise, the cross-border money-transfer platform, has shown a similar pattern of rising volumes and falling take rates, detailed when it reported that FY26 volume jumped 31% even as its take rate fell to 52 basis points.
A sector growing up in public
The valuation and capital-markets backdrop is shifting too. UK fintechs are increasingly using public and private-market venues to reward early backers, a trend underscored when savings-and-investing app Moneybox ran an £800 million share sale on London’s Pisces private-securities market. Funding Circle, already listed, is taking the more traditional route of buying back its own shares, but the underlying theme is the same: British fintech has moved from a growth-at-all-costs phase into one where cash returns and profitability define success.
The table below places Funding Circle’s first-half snapshot alongside selected UK-linked fintech reference points. Figures are drawn from the most recent company disclosures and are not directly comparable across different reporting periods.
| Company | Core niche | Recent growth signal | Capital-markets move |
|---|---|---|---|
| Funding Circle | SME term loans and FlexiPay | H1 revenue +50%, PBT to £23m | £72m of buybacks (~18% of shares) |
| Wise | Cross-border transfers | FY26 volume +31% to record levels | Take rate cut to 52bps |
| Moneybox | Consumer savings and investing | Scaling app-based wealth | £800m Pisces share sale |
| Klarna | Consumer BNPL | Global instalment volume growth | US bank-charter application |
Why the model shifted from peer-to-peer to a lending marketplace
To understand why these numbers matter, it helps to remember where Funding Circle started. The company was a pioneer of peer-to-peer lending, matching retail investors with small-business borrowers. That model came under pressure during the pandemic, when it leaned heavily on government-backed lending schemes, and again afterward as retail peer-to-peer lending fell out of favour across the industry.
From retail investors to institutional capital
The company’s answer was to retire the retail peer-to-peer proposition and rebuild around institutional funding. Today the platform originates loans and sells them, or commits them in advance, to banks and asset managers through forward-flow deals. That transition, painful at the time, is the foundation of the current results: it stripped out the operational complexity and regulatory overhead of managing a retail investor base and replaced it with a smaller number of large, reliable institutional buyers.
A cleaner, more scalable business
The payoff is visible in the margins. A fee-earning marketplace that hands most credit risk to institutions can grow originations quickly, hold surplus cash and return capital to shareholders, all at once. The first-half 2026 figures, record profit alongside a rising cash balance and continued buybacks, are the clearest evidence yet that the reinvention has worked. What was once a cautionary tale about peer-to-peer lending is now, on these numbers, a case study in a successful pivot.
What record cash and buybacks signal to shareholders
Funding Circle ended the half with about £136 million of unrestricted cash, up from £101 million at the end of 2025. For a company that once had to reassure investors about its funding, a rising cash pile is a statement of confidence. It also gives management the means to keep returning capital.
The buyback math
The company has been steadily repurchasing its own shares. Including a buyback programme of up to £25 million that remains under way, Funding Circle said it has now bought back about £72 million of stock, equivalent to roughly 18% of its issued share capital. Retiring nearly a fifth of the shares in circulation mechanically boosts earnings per share and signals that the board views the stock as undervalued relative to the cash the business now throws off.
What it says about capital priorities
Choosing buybacks over acquisitions or a dividend tells investors that Funding Circle sees its own equity as the best available use of surplus cash. It is a posture more common among mature, cash-generative companies than growth-stage fintechs, and it underlines how far the business has travelled. The message to the market is that the platform can fund its growth from wholesale facilities and forward-flow deals while using its own cash to shrink the share count.
The macro backdrop: SME demand, rates and the UK economy
No small-business lender is insulated from the wider economy, and Funding Circle’s cautious guidance reflects that. The company reported strong demand in the first quarter that normalized in the second as the seasonal summer slowdown approached, and it said it helped a record number of businesses during the half.
Rates, confidence and borrowing appetite
Small-business borrowing tracks confidence. When owners expect stronger trading, they invest and borrow; when they are wary, they hold back. The health of Funding Circle’s origination pipeline is therefore a useful, if narrow, read on the mood of British small firms. The record number of businesses served in the half suggests appetite held up through the first half, even as the company signalled that it is watching the second half carefully.
A UK-focused book
Funding Circle’s business is now centred on the United Kingdom, having wound down its overseas ambitions in earlier years. That focus concentrates the company’s fortunes on the British small-business economy and on the willingness of UK and international institutions to keep funding its loans. It also means the platform’s results function as a barometer for a specific slice of the economy: the established small firms that borrow to grow, manage cash flow and invest.
Risks and what to watch into the second half
The bull case is straightforward: high-margin growth, a rising cash balance, buybacks and a fast-growing second product. The risks are more subtle but real, and management’s careful tone acknowledged them.
Institutional funding dependence
The forward-flow and wholesale-funding model that de-risks credit also creates a dependency. Funding Circle’s ability to grow originations rests on institutions continuing to commit capital on attractive terms. A sharp deterioration in credit conditions, or a repricing of risk by those buyers, would slow the origination machine even if borrower demand stayed strong.
Credit quality in a slowing economy
Loan performance is the other variable. Although Funding Circle passes most credit risk to institutions, sustained rises in small-business defaults would eventually feed back into the terms it can secure and the appetite of its funding partners. The company’s guidance restraint reads as an acknowledgement that the second half could bring a softer economy.
The FlexiPay scaling test
FlexiPay’s 71% growth is a strength, but scaling a flexible-credit product quickly demands disciplined underwriting. Rapid growth in any lending book raises the question of whether credit standards keep pace with volume. Investors will watch the FlexiPay loss rates disclosed at the full results in September for signs that growth is not outrunning quality.
What it means for merchants, marketplaces and the wider payments market
For the retail and e-commerce ecosystem, Funding Circle’s rise matters because small merchants are its customers. The firms that sell on marketplaces, run independent online stores or operate physical shops are exactly the businesses that use term loans to invest and FlexiPay to smooth cash flow. A healthier, faster-growing lender to that segment means more available working capital for the long tail of commerce.
Embedded finance moves closer to the checkout
FlexiPay and the business card also point to a broader trend: finance embedded directly into the tools small businesses already use to pay suppliers and manage spending. As instalment credit, flexible cards and short-term lending converge, the line between a lender and a payments company blurs. Funding Circle is increasingly on both sides of that line, competing for the everyday spending relationship as well as the occasional loan.
A template for profitable fintech
Perhaps the most durable lesson is strategic. Funding Circle has shown that a fintech can survive the collapse of its original model, rebuild around institutional funding and emerge more profitable than before. In a sector where many peers are still chasing growth over earnings, a platform posting a 50% revenue rise, a near-quadrupling of profit and an 18% reduction in its share count offers a template for what a mature, cash-generative fintech can look like. The full results on 8 September 2026 will test whether the momentum carries into the second half.
Frequently asked questions
What did Funding Circle report for the first half of 2026?
Funding Circle reported unaudited first-half revenue of about £138 million, up 50% year on year, and pretax profit of about £23 million, up from £6 million. Assets under management rose to £3.3 billion and the platform extended £1.7 billion of credit in the six months to 30 June 2026.
Why did profit grow so much faster than revenue?
Funding Circle operates a fee-earning lending marketplace with high operating leverage. Once its technology and servicing infrastructure are built, extra lending volume flows through to profit with limited additional cost, so a 50% revenue rise translated into a near-quadrupling of pretax profit.
What is FlexiPay and why does it matter?
FlexiPay is Funding Circle’s flexible-spending product for small businesses, letting them spread the cost of payments over instalments or draw on a credit line, with a linked business card. Transactions across FlexiPay and the card jumped 71% to £640 million, making it the group’s fastest-growing segment and a second growth engine beyond term loans.
How does Funding Circle fund the loans it originates?
The company sells or pre-commits most loans to banks and asset managers through forward-flow agreements, signing two new deals worth £900 million in the half. FlexiPay is supported by a separate £400 million funding facility. This lets Funding Circle grow lending without tying up its own capital.
Is FlexiPay the same as consumer buy-now-pay-later?
No. FlexiPay applies instalment-style credit to small businesses managing cash flow and supplier payments, not to consumer shoppers at checkout. That places it under a different regulatory framework than the consumer buy-now-pay-later products now facing tighter UK supervision.
What are Funding Circle’s buybacks and guidance?
Funding Circle has repurchased about £72 million of its shares, roughly 18% of its issued share capital, including an ongoing programme of up to £25 million. It reaffirmed full-year guidance of at least £235 million revenue and at least £35 million pretax profit.
What are the main risks to the outlook?
The chief risks are a pullback in institutional funding appetite, a rise in small-business defaults in a slowing economy, and the challenge of keeping underwriting standards tight as FlexiPay scales rapidly. Management reaffirmed rather than raised guidance, signalling caution about the second half.
When are the full results due?
Funding Circle said it will publish full half-year results on 8 September 2026, which will include audited detail on segment performance, loss rates and margins that the trading update did not disclose.