Funding Circle Responds: Plans to Launch 7(a) Loan Operations

April 2, 2024

Delaney Sexton
Contributing Editor

Funding Circle Responds: Plans to Launch 7(a) Loan Operations

Early in March, Funding Circle CEO Jacobs said “Whilst the US business offers attractive long term growth, it also requires a significant amount of cash and capital to grow the small business administration (SBA) proposition and we don’t believe that this is the best course of action for the group.”

The announcement of Funding Circle’s intentions to potentially offload their US operations sparked conversation among both the House Committee on Small Business and the Senate Committee on Small Business & Entrepreneurship about Funding Circle’s SBLC license. SBA Administrator Guzman was questioned during a House Committee hearing last week, and yesterday, Senate Committee Chair Shaheen also weighed in:

“Awarding a license to a company that is preemptively seeking to offload its operation even before receiving its full approval or making a single SBA loan would be unprecedented and, in my view, extremely unwise,” writes Chair Shaheen in a letter to SBA Administrator Guzman. 

“SBA’s mission is too important to grant loan-making authority to a lender that is not fully committed to the agency’s programs. Given that your oversight division, the Office of Credit Risk Management, will have sole responsibility for regulating the licensee and ensuring that its capital reserves are adequate, the identity of the new parent company is a critical piece of information that SBA should have before granting the entity the authority to make loans.”

Ryan Metcalf, the general manager of government guaranteed lending at Funding Circle US has also responded to the recent conversation around Funding Circle’s SBLC License:

“It’s been a busy few weeks here at Funding Circle US where we are heads down preparing to launch our U.S. Small Business Administration 7(a) small loan product while simultaneously evaluating interests in our U.S. business.

“Meanwhile, some folks in Congress made inaccurate and misleading statements about Funding Circle which were disheartening to say the least but fortunately the facts are on our side and we were able to set the record straight.”

In response to Chair Shaheen’s letter, Ryan Metcalf remarks:

“Funding Circle USA intends to offer 7(a) small loans, has leadership throughout our organization with SBA lending experience, and remains more than sufficiently capitalized.

“Our intention is that any transaction regarding the U.S. business would be to a well-capitalized U.S. domiciled entity willing to provide the capital to enable FC USA to continue making 7(a) loans subject to SBA approval per SOP 50 56 1.”

Senate Committee Press Release
Ryan Metcalf Linkedin Post – Congressional Hearing
Ryan Metcalf Linkedin Post – Shaheen Letter