Business
finance that
Annual Report and
Accounts 2024
backs you
STRATEGIC REPORT
Overview and highlights
Powering UK
businesses
We’re the UK’s leading SME finance platform, backing
small businesses with the funding they need to win.
From coffee roasters and bakeries to furniture
manufacturers and estate agents, our customers
are the nation’s small and medium-sized businesses.
Our products
Enabled by data and technology,
our expanded product suite allows
businesses to borrow, pay later and
spend – supporting them at every
stage of their finance journey.
Borrow
Longer term
Pay later
Monthly
Spend
Daily
More detail on page 18
Our customers
We’re building a great
business for our customers,
who are the backbone of the
economy. We provide the fuel
to power SMEs, enabling them
to build their businesses that
create jobs, bring economic
growth and support their
communities.
More detail on page 14
Front cover image: Laird Hatters.
More detail on page 44
Our financial performance
Revenue
£160.1m
Credit extended
£1.9bn
Balances outstanding
£2.8bn
Profit before tax
(before exceptional items)
£3.4m
Contents
Strategic report
01 Overview and highlights
02 Chair’s statement
05 Chief Executive Officer’s statement
08 Our business model
10 Our strategy
12 Key performance indicators
14 Our customers
16 Technology and data
18 Our products
20 Our people
24 Environment, social and governance
(“ESG”)
39 Non-financial and sustainability
information statement
40 Engaging our stakeholders
44 Financial review
51 Risk management
55 Principal risks and uncertainties
63 Viability statement
Corporate governance
66 Chair’s introduction
67 Governance at a glance
68 Board of Directors
70 Corporate governance report
78 Report of the Nomination Committee
82 Report of the Audit and Risk
Committee
88 Report of the ESG Committee
90 Directors’ remuneration report
101 Annual report on remuneration
112 Report of the Directors
115 Statement of Directors’
responsibilities in respect
of the financial statements
Financial statements
117 Independent auditors’ report
124 Consolidated statement of
comprehensive income
125 Consolidated balance sheet
126 Consolidated statement of
changes in equity
127 Consolidated statement
of cash flows
128 Notes forming part of the
consolidated financial statements
180 Company balance sheet
181 Company statement of changes
in equity
182 Company statement of cash flows
183 Notes forming part of the Company
financial statements
193 Alternative performance measures
194 Glossary
197 Shareholder information
198 Company information
160.1
1.9
2.8
3.4
130.1
1.3
2.9
(9.9)
2024
2024
2024
2024
2023
2023
2023
2023
The Strategic report was approved by the Board on 06 March 2025.
Lisa Jacobs
Chief Executive Officer
STRATEGIC REPORT
01Funding Circle Holdings plc | Annual Report and Accounts 2024
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC REPORT
Chair’s statement
A remarkable
year of evolution,
and serving
more SMEs
Review of the year
2024 was a remarkable year, a year of major decisions
and change.
In last year’s report I wrote about our decision to seek
an exit of our US business which we had owned and
developed almost since start-up. This was a hard
decision made after we won the licence to distribute SBA
loans in 2023. We received several approaches for the
business and, following the Board decision to proceed,
the team executed a seamless sale despite our emotional
connection to all the team and all we had achieved
in the US.
Over a period of years, we had invested heavily in
talent, having built expected economic recovery into
our budgets. However by the end of 2023 we stopped
building in such recovery in our budget process. The
decision to press ahead with cost reductions during
2024 was another hard but necessary decision. I am
pleased that this was done fairly and properly with
a significant reduction in our cost base but a culture
largely unscathed.
These two major decisions were also driven by a
prioritisation of shareholder value. In 2023, I referenced
the value of the operational and financial leverage in our
business model, “we can hope and expect that the share
price will reflect that value in due course”, I wrote. It is at
last pleasing that Funding Circle Holdings was one of the
best performing shares in the UK market in 2024.
corporate.fundingcircle.com
Andrew Learoyd
Chair
2024 was a remarkable year
for Funding Circle, a year of major
decisions and change. I feel more
confident about Funding Circle’s
future than ever before.”
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202402
Strategy
In 2022, we began our strategic pivot from a single
to a wider product offering, and in 2024 we completed
the shift to a single geography focus. We now offer UK
SMEs more ways to borrow, pay later and spend and
we will continue to bring more flexibility and value to our
existing customers and also say “yes” to a broader range
of customers.
While the Board has made a conscious decision to
demonstrate the underlying profitability of our core
business, we do not want to do this at the expense of
growth. New products require research, development and
investment and we will use our balance sheet strength
and cash generative core business to fuel the longer-
term growth. FlexiPay is a good demonstration of how
much growth we can deliver with this strategy and since
launching in 2022, FlexiPay is now facilitating almost
£45 million payments per month. Our newly launched
Cashback Business Credit Card (“Cashback credit
card”) is next, and we have high hopes this will drive
further growth.
Board and people
Last March, I said there would be changes to the Board
over the year as some of our Non-Executive Directors
were nearing the end of their tenure, and that we would
use this opportunity to ensure we have the right size
and composition of Board for our revised strategy. In
May 2024, our Risk and Compliance Committee Chair,
Eric Daniels stepped down after almost eight years on
the Board. In October 2024, founder Samir Desai CBE
stepped down from the Board as he was coming to the
end of his three years as a Non-Executive Director, and
Matthew King recently retired from the Group Board
having spent many years chairing the Board of our
regulated subsidiary. We also announced in May 2024
that CFO Oliver White would stand down at the end
of the year.
To our departing Directors, I give thanks for your
commitment, your support and for leaving Funding Circle
in the strong position it is in today. Samir, especially to
you, none of this would have been possible without you
and your co-founders.
The Nomination Committee had much to do in 2024 and
the work is ongoing. We appointed Tony Nicol as CFO and
Ken Stannard has joined as Non-Executive Director and
Chair Designate to replace me following the AGM in May
2025. We plan to appoint at least two new Non-Executive
Directors in the coming months.
In Tony Nicol we have a trusted colleague who
understands our business intimately. We are excited to
have Ken Stannard join us, together with the additional
Non-Executive Director hires that we are seeking, we will
have a new Board replete with the skills and experience
to drive Funding Circle forward as the champion of SMEs
in the UK.
Introducing our new Chair
Excited to be joining Funding
Circle on its next chapter
I am delighted to join Funding Circle as the
Independent Non-Executive Director and Chair
Designate. In 2025 and beyond, I look forward to
working with the Board, the executive team and
Circlers to drive forward the Group’s strategy and
ensuring that it continues to create significant
value for all stakeholders.
Assuming the role of Chair Designate is a
significant responsibility. However, with over three
decades of experience and expertise in credit,
lending, and payments, I am eager to contribute
and continue bringing the Company’s vision to
life, and ensuring more small businesses get the
funding they need to win.
I look forward to my election to the Board and role
of Chair at the Annual General Meeting in May 2025,
where our shareholders will have the opportunity to
ask me and the Board about our vision.
I am confident that 2025 will be a year of
excitement and opportunity for Funding Circle
to grow and maintain its position in the market.
Ken Stannard
Chair Designate
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 03
It has been an honour,
a privilege and a pleasure
to serve on the Board of
Funding Circle for the
nearly 15 years since it
was founded.”
Board and people continued
While 2024 has been a year of great successes, some
of the changes have been difficult for our Circlers such
as the sale of the US business, and the restructuring in
the UK. I pay full respect to the whole team who have
together delivered an exceptional year of growth with
almost no blip in the culture that defines Funding Circle.
The future
With my final report to shareholders, I feel more confident
about Funding Circle’s future than ever before. No longer
“unproven through the cycle”, the attractive financial
model and cash generation of our core business will
become obvious, while our newer products will provide
the turbo charge to growth.
Our new strategic direction has given us a more simplified
focus, but a wider product offering also raises challenges
that we have not previously faced. For example, it has
dramatically increased the velocity and frequency of our
customer interactions and the need for us to offer the
right product with the simplest messaging. Having spent
many years offering a single product, we will need to
offer a different and improved customer experience in the
future. We need to be best in class to ensure that SMEs
come to us and stay with us for an increasing number of
their financial needs.
As part of this process, there are skills we need to learn
and resources to hire. We have recently set up a team of
AI experts who will harness the technology to support
this. For many years, we have used machine learning
to develop the market leading SME credit technology.
Adding AI will allow us to become the go-to supplier of
financial products for the vast army of SMEs that are the
bedrock of the British economy.
Thank you
Our journey since 2010 has not always been easy. The
sector that we helped to create, peer-to-peer finance,
is said no longer to exist, but here we are with much the
same platform-based model that we started with. We
have faced a series of economic and political headwinds,
but we have faced these challenges with great purpose,
based on a mission that has always remained constant, to
support SMEs with the funding they need to win.
With that mission, there have been some extraordinary
achievements. We knew the demand from SME borrowers
would be there, but how could we ensure there would
always be a steady supply of investor lending. We have
proven after 14 successive years delivering positive net
returns for institutional investors on our platform that we
have indeed invented a new asset class. An asset class
that has been endorsed by the Bank of England, which
recently approved our securitised loans as eligible bonds
for collateral.
It is an asset class which feeds capital and jobs to the
real economy, and we have secured a market position
that is so important to that asset class that when the
State needed to provide government-guaranteed loans
to British businesses, we became a significant part of
the British Business Bank’s programme. I once told a
shareholder that I would not leave Funding Circle until
we were regarded as essential to the health and funding
of a large swathe of SMEs in the UK economy. I believe
that Funding Circle is now in that position, I truly believe
that with Funding Circle around, British business is in a
better place!
It has been an honour, a privilege and a pleasure to serve
on the Board of Funding Circle for the 15 years since it
was founded, and I wish all who will now take it forward
great fulfilment, success and fun.
Andrew Learoyd
Chair
6 March 2025
Chair’s statement continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202404
Chief Executive Officer’s statement
A year of change
and significant
progress
We provide the fuel to power
SMEs up and down the country.
We enable these entrepreneurs to
build great businesses that create
jobs, bring economic growth and
support their communities.”
2024 was a successful year of change and transformation
as we executed against our plan to deliver a simpler,
leaner business.
I am proud of the progress we have made. We have
delivered strong revenue growth and profitability ahead
of market expectations. Our business is in a strong
position as the market leader in online SME lending. We
have leveraged our data and technology strengths to
expand our product set to serve more of our customers’
needs. We have delivered robust, attractive loan returns
to our institutional investors through the cycle. We have
an attractive go forward plan, driving sustained revenue
growth and expanding our margins.
Borrow, Pay Later and Spend: Our multi-product
transformation
Three years ago, when I stepped into the CEO role, I set
an ambition to be a multi-product business, one that
enabled businesses to not only borrow for the longer
term, but to also pay later and spend, becoming a more
important part of our customers’ lives and providing further
growth opportunities. Over the last three years, we have
delivered against this plan. Today, businesses can borrow
with our Term Loan, for longer term investment; pay later,
managing their cash flow through FlexiPay; or spend on
our Cashback credit card.
This shift is reaping strong rewards for our business. First,
we have seen strong growth. In 2024, more than a quarter
of our credit extended was via FlexiPay and FlexiPay
revenue grew threefold. Secondly, we are seeing an
increase in our share of our customers’ financing as over
70% of FlexiPay revenue came from existing Term Loan
customers. Finally, we have increased our interactions
and engagement with our customers. Three years ago,
we interacted with a customer approximately every half an
hour, today we interact with a customer every 92 seconds
as they take a loan, FlexiPay a supplier or spend on their
Cashback credit card.
Lisa Jacobs
Chief Executive Officer
corporate.fundingcircle.com
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 05
Over the last three years,
we have transformed our
business. We see a future
where Funding Circle is at the
heart of SMEs’ financial lives.”
£33.7 million of share buybacks in 2024, we finished
the year with a healthy unrestricted cash position of
£151 million.
Our core Term Loans business grew strongly with
33% origination growth, reaching £19 million in PBT, a
margin of 13.3% as we attracted more businesses and
enhanced our product offering, launching government-
backed Growth Guarantee Scheme loans and a broader
Marketplace offering.
FlexiPay, our pay later proposition, continued to show
strong growth with revenue tripling over the course of the
year. Businesses have now FlexiPaid more than 280,000
times. When we launched FlexiPay, we had a hypothesis
that this would be a product that would attract both
existing and new to Funding Circle customers, and I am
pleased to say that this is the case, with ~30% of our
2024 FlexiPay revenue from new customers. We continue
to see strong usage from existing FlexiPay customers,
once a customer starts using FlexiPay it becomes part
of their day-to-day cash flow management tools. In
2024, over 70% of revenue was from customers who had
opened their FlexiPay account before 2024. In H2 2024,
we launched our Cashback credit card, completing our
“borrow, pay later and spend” proposition. It is still early
days for our credit card but initial metrics are in line with
our expectations and we look forward to seeing further
growth in 2025 and beyond.
2024 was a year of change and progress as we executed
against our plan of delivering a simpler, leaner business.
I am proud of the progress we have made, delivering
strong growth, expanding our product set and delivering
profit ahead of market expectations.
We executed the plan I laid out to be a simpler, leaner
business. We sold the US business in July for a gain on sale
of £10 million and restructured the UK business, to deliver
£15 million in annualised cost savings from 2025. These
were not easy decisions to make. We said goodbye to some
talented Circlers who were vital in our business’s journey.
However, these decisions were essential to position us for
long term success, and they have placed the business in a
strong position to deliver against our medium-term plan with
continued growth and profitability trajectory.
Our competitive advantage: data and technology
at the heart of everything we do
We’ve delivered this by leveraging our credit, data
and technology advantage, delivering the same great
customer experience. SMEs want fast, easy access to
credit. We provide that with a six minute application form,
an instant decision for 77% of applicants and funding in
businesses’ accounts in as little as 24 hours. This drives
strong customer satisfaction with an NPS of 79 and
enables our busy customers to get back to what they
do best, running their business.
Our AI powered risk models are trained with data
from public sources alongside proprietary data on our
hundreds of thousands of loans and transactions and are
three times better at discriminating risk than the bureau
scores alone. Despite the challenging macroeconomic
environment of the last several years, our business
has delivered well through the cycle. Loan returns have
been robust and attractive, attracting further institutional
investor demand and we have continued to attract and
serve SME demand.
Fuelling the nation’s SMEs
We’re passionate about our mission. We provide the
fuel to power SMEs up and down the country. We enable
these entrepreneurs to build great businesses that
create jobs, bring economic growth and support their
communities. They are not the high growth venture-
backed rocket ships, but they are the backbone of
the economy – the florists, the manufacturers, the
restaurateurs, the builders and countless others.
They have a huge impact on the economy, but they
have historically been underserved. For the last
15 years, we have been changing that with fast,
easy finance that backs small businesses.
As we continue to back these businesses, we’re
also backing the economy. In 2024, lending through
Funding Circle supported over 87,000 jobs, £7.2 billion
in GDP contribution and £2 billion in tax receipts. We
lent to businesses in every one of the country’s 650
constituencies. That is pretty remarkable and I am
reminded of the impact we have whenever I meet
one of our borrowers and hear their stories. This year,
I have had the pleasure of meeting Tina from the French
bakery, Croissant D’Or, and Debi from the flooring
business, Springfield Carpets, in Leeds; and husband
and wife team, Brian and Kerry, from Powderhall Bronze,
an Edinburgh based foundry, fine art producer and
gallery. They each have wonderful stories of running
and building their businesses with plenty of ups and
downs. It’s a privilege to know that our loans have
been part of those journeys.
2024: a simpler, leaner, high growth, profitable
business
In 2024, we executed well. We delivered £3.4 million
in PBT, above market expectations and up from a loss
of £9.9 million in 2023. Revenue grew by 23% to £160
million. Alongside this, our credit extended grew 47% to
£1.9 billion. We have a strong balance sheet and despite
Chief Executive Officer’s statement continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202406
Simpler
Sold US business for
a gain on sale of £10 million
In July, we sold our US business to iBusiness
Funding for a gain on sale of £10 million in order
to focus on nearer term profitability and cash
generation in the UK.
Leaner
Restructuring announced
to deliver an annualised
benefit of ~£15 million in 2025
In May, we announced a restructuring
programme to reduce our total head count
by c.120, delivering an annualised benefit
of c.£15 million in 2025. This focused on
management layers, business prioritisation
and productivity, supported by GenAI tools.
Profitable
Delivered PBT margins of
13.3%, in line with profit
guidance
The actions that we have progressed this year
have meant that the business has delivered
£3.4 million PBT, following an upgrade to our
profit guidance in September. In our more
mature Term Loans business, we delivered PBT
margins of 13.3%.
Key actions
from 2024.
People & culture
Our performance this year is down to the hard work of
our Circlers. We are a technology business, but we are
also a people business, driven by the passion, innovation
and delivery of our team. I want to thank them all for
their dedication and commitment to helping SMEs thrive.
Our culture is something that we nurture and celebrate.
We pride ourselves on being a great place to work and
develop careers. In 2024, we have held various team
events and socials, including our first ever CircleIN. Our
Circler groups have been active and we have had an
office refresh to upgrade the space, foster collaboration
and work seamlessly for a hybrid working environment.
We were delighted to be awarded the Transformation of
the Year at the PLC Awards in recognition of the changes
we have made and the team’s strong execution.
I would like to thank Oliver White, our departing CFO, who
has had a significant impact in his four years at Funding
Circle, and our departing Board members, particularly
Samir Desai and Andrew Learoyd, whose leadership
and vision have built this business from the start. I am
delighted to have Tony Nicol step into the CFO role, after
six years at Funding Circle, and Ken Stannard bringing
his vast experience and energy as he steps into the
Chair role.
Looking ahead
2024 was a strong year, but I believe the best is yet to
come. The market opportunity is vast, with over £80 billion
in SME loans outstanding, over £1 trillion in SME B2B
payments and over £80 billion in SME card transactions.
We are in a strong position to capitalise on this opportunity
with high customer satisfaction rates driven by proprietary
and defensible data and technology advantages.
Our four strategic priorities are focused on profitable,
customer-led growth:
l Get to Yes: continuing credit innovation and
product enhancements will enable us to get to yes for
more businesses as we bring the right product to the
right customer.
l Expand our audience: expanding our audience
by targeting new segments with our newer
products whilst also deepening and expanding
our distribution channels.
l Scale our product offering: scaling our products
and adding new features, capitalising on the
significant market opportunity to drive growth
and margin expansion.
l Build a seamless lifetime customer experience:
delivering an exceptional experience throughout our
customers’ journey as their trusted financial partner.
We have a strong, mission-driven team, a clear vision and
plan. As we execute this plan, we’ll become an even more
integral part of our customers’ lives, fuelling the success
stories of hundreds of thousands more businesses and
creating countless jobs. We see a future where Funding
Circle is at the heart of SMEs’ financial lives, providing the
tools and resources they need to thrive.
Lisa Jacobs
Chief Executive Officer
6 March 2025
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 07
Our business model
We’re proud of our impact in powering the nation’s SMEs, which supports jobs and
economic and community prosperity. Small businesses are the backbone of the
economy. Since 2010 we have been fuelling small businesses with the funding they
need using our data and technology advantage to drive a superior, fast and hassle-free
customer experience.
Our capital light model enables scale and growth whilst our superior risk and analytic
capabilities deliver robust and attractive returns for institutional investors.
Our addressable
market
Our
customers
l Access to affordable finance
l Fast, convenient applications
l Instant automated decisions for 77% of applications
l Superior customer experience with a 79 Group
Net Promoter Score
Our business model
£84bn
addressable SME
loans market
1
£1.3trn
SME B2B
payments
2
£80bn
SME card
transactions
2
Small business
borrowers
l Access to hard-to-reach asset class at scale with
diversified loan book
l Robust and attractive returns
l Forward flow agreements with £2.1 billion future
funding in place
Institutional
investors
1. Funding Circle addressable market research July 2022
2. Visa SME market sizing July 2022
STRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 202408
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
More detail on page 16
The value
we create
>111,000
small businesses
supported
£7.2bn
contribution to GDP
87,000+
jobs supported
~5%
annualised returns to
institutional investors
171
Impact Days taken in
2024
Our competitive
advantage
Superior customer
experience
79
NPS
4.6
Trustpilot
3x
better risk
discrimination
77%
instant
decisions
Data and technology
advantage
Wide product suite
Borrow
Spend
Pay later
For details on how we generate revenue, see page 46
STRATEGIC REPORT
09Funding Circle Holdings plc | Annual Report and Accounts 2024
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Our strategy
We delivered against
our ambitious strategy in 2024
Our product expansion and growth
have enabled us to increase
applications, open up new
marketing channels and attract a
broader set of businesses.
In addition to our product evolution,
we have continued to invest in our
brand with our second and third
season sponsoring Premiership
Rugby. We expanded our sponsorship
by welcoming Jamie George, England
Captain and Funding Circle borrower,
as our brand ambassador.
Along with our regular marketing
channels, the sponsorship has
driven increased brand visibility and
helped us reach an even wider pool
of customers. Our Season 2 content
series amassed 43 million views
across online media platforms and
11 million in print and radio, driving
increased spontaneous brand
awareness and brand consideration.
In 2024 we grew our credit
extended by 47%.
Throughout the course of the year, we
continued to use our credit analytics
and product innovation capabilities to
say yes to more businesses.
In July 2024, we launched
our lending under the Growth
Guarantee Scheme, expanding
our offering to a new segment of
SME borrowers.
Through Marketplace, we expanded
the number of partners we work
with and the products we provide so
we can say yes to businesses even
if we don’t have a Funding Circle
product to meet their needs. Our
Marketplace now accounts for ~11%
of our loan originations, an increase
of 1% in 2023, enabling us to deliver
a great outcome for our SME
customers and further monetise our
distribution capabilities.
We have continued to expand and
diversify our Funding Circle product
offering, scaling our FlexiPay pay
later product and launching our
Cashback credit card. In doing so,
we have expanded the ways we can
serve customers and increased our
share of wallet with our customers,
whilst leveraging our strengths in
credit, data and distribution.
We have enhanced our FlexiPay
offering, adding new product
features throughout the year,
including enabling businesses to
buy now and pay later in 1, 3, 6, 9 or
12 months. FlexiPay revenue grew
by 3.4 times in 2024.
In Q3 2024, we launched our
Cashback credit card, initially in
beta. This enables us to attract
a broader set of customers, and
interact with them on a daily basis.
1
2
3
Attract more
businesses
Say yes to more
businesses
#1 in new
products
How we delivered in 2024Our strategic pillars
See our KPIs on page 12
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202410
Evolution of our
strategic framework
Over the course of the last three years, we have transformed our business offering
from a single product to one that enables businesses to borrow, pay later and spend.
We now have deeper relationships with customers as we meet more of their needs and
have increased our interaction with them from every few years to every few days.
As we continue to scale our business, our evolved strategic framework is focused on
customer-centric profitable growth.
Get to ‘Yesʼ Expand our audience
Scale our product offering Deliver a seamless lifetime
customer experience
When our customers win, we win. We will leverage
our credit and product innovation capabilities to
enhance our products and open new segments to
serve a broad customer base.
Enhanced product offerings to new customer
segments through new marketing channels will
expand our audience, attracting more businesses to
Funding Circle.
Our product suite is wide and meets most of the
needs of our customers, but some products are
nascent whilst the market opportunity is large. Over
the coming years, we will scale our newer products,
innovating and unlocking new product features to
drive profitable growth.
Our customers have a broad range of finance needs
and we now have the right products to meet them.
Through our broader product set we will deliver a
great lifetime customer experience serving them
with our renowned superior customer experience
and the right product at the right time.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 11
Key performance indicators
Net income (£m)
£160.1m
Profit/(loss) before tax (£m)
(before exceptional items)
£3.4m
Basic earnings/(loss) per share (p)
(before exceptional items)
0.8p
Definition
The Group generates net income
principally from: transaction fees earned
from originating loans with borrowers;
servicing fees from servicing of loans
under management; interest income
from FlexiPay and cash balances; and
investment income net of investment
expense and after fair value gains/
(losses) and cost of funds.
Definition
Profit/(loss) before tax is defined as
net income after taking into account
all operating expenses and finance
income, costs and share of (loss)/profit
of associates. It is presented above
before the impact of exceptional items.
Definition
Basic earnings/(loss) per share is
defined as the profit/(loss) for the year
attributable to ordinary equity holders
of the Parent Company divided by the
weighted average number of ordinary
shares in issue during the year. It is
presented above before the impact of
exceptional items.
Links to strategy:
1
2
3
Links to strategy:
1
2
3
Links to strategy:
1
2
3
Financial
Operational
2023
119.5
2022
(0.9)
2022
2024
160.1
130.1
2022
(3.1)
(9.9)
2024
3.4
(2.4)
2024
0.8
Term Loans originations
£1,407m
FlexiPay transactions
£492m
Originations (£m)
Definition
This represents the monetary value of loans originated through the Group’s platform or
through Marketplace referrals in any given year as well as drawdowns on the FlexiPay
lines of credit and Cashback credit card spend. These are key drivers of transaction
and servicing fees for the Term Loans business and the upfront fee for the FlexiPay
business. These are presented above for continuing operations only in both the
current and comparative periods.
Links to strategy:
1
2
3
2023
2023
2022
1,095
59
2022
1,060
2024
1,407 2024
492
234
2023
2023
How we measure our performance
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202412
Financial Alternative performance measures (“APMs”)
Links to strategy:
1
2
3
Links to strategy:
1
2
3
6.7
Adjusted EBITDA (£m)
£24.5m
Free cash flow
1
(£m)
£(1.2)m
Definition
Adjusted EBITDA represents the profit/(loss) for the year
before finance costs (the discount unwind on lease liabilities),
taxation, depreciation and amortisation, and impairment,
and additionally excludes share-based payment charges
and associated social security costs, foreign exchange and
exceptional items.
Definition
Free cash flow represents the net cash flows from operating
activities less the cost of purchasing intangible assets,
property, plant and equipment, lease payments and interest
received. It excludes the warehouse and securitisation
financing and funding cash flows and lines of credit cash
flows. The Directors view this as a key liquidity measure.
1. Free cash flow excludes restricted cash movement due to the
payment of guarantee fees.
Key to strategic objectives
1
Attract more businesses
2
Say yes to more businesses
3
#1 in new products
Operational continued
Term Loans under management
£2,714m
End of month balances
£119m
Balances outstanding (£m)
Definition
This represents the total value of outstanding principal of borrower loans, lines of credit and credit card balances.
It includes amounts that are overdue but excludes loans that have defaulted and loans originated through
Marketplace referrals to other lenders. These are presented above for continuing operations only in both the
current and comparative periods.
Links to strategy:
1
2
3
58
2023
2023
2023
(27.9)
2023
3,311
2022
12.6
2022
24.5
2024
(1.2)
2024
2024
2,714
2024
119
2,853
182022
(13.3)
2022
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 13
Our customers
The pandemic has fundamentally changed SME Britain, with
92% small business owners who pivoted during Covid-19,
making these strategic changes permanent.
Five years after the pandemic, SMEs
continue to show their resilience
SMEs remain resilient and
competitive in an evolving market
With 2025 marking five years since the pandemic,
small businesses are more resilient than ever. The latest
research published by Oxford Economics in partnership
with Funding Circle in 2024 shows that over three in five
(65%) SMEs are expecting their business to grow in 2025,
highlighting their long-term confidence.
The pandemic accelerated digital adoption, and
the research demonstrates that it was not just a
temporary measure, it has fundamentally reshaped how
SMEs operate.
SMEs are increasingly prioritising digital transformation
and technology investment over physical expansion,
while maintaining a strong appetite for growth. This trend
signifies a lasting change in business strategies that
began as a response to the Covid-19 pandemic.
Making up 99% of the business population, small
businesses create jobs, boost the economy, and support
local communities. In 2024, Funding Circle’s Term Loans
and FlexiPay lending not only contributed £7.2 billion
to the UK’s gross domestic product (“GDP”) but also
played a pivotal role in supporting over 87,000 jobs.
Additionally, the economic activity supported by these
loans generated £2 billion in tax receipts.
Investing in the future
Despite macroeconomic headwinds, the findings highlight
that SMEs are investing for the future, rather than pulling
back. The continued prioritisation of technology investment
and hiring suggests that businesses are focusing on
productivity, operational efficiency, and adaptability to
remain competitive in a post-pandemic world.
SME access to finance
To support this momentum, access to capital remains
crucial. While SMEs are demonstrating strong resilience,
many will require continued financial support to unlock
growth opportunities. Ensuring that businesses have the
right tools to fund expansion is key in shaping the next
stage of business recovery and innovation.
Despite tougher credit conditions, the research also
showed that Funding Circle remained committed to
providing loans to SMEs with businesses in every one
of the UK’s 650 parliamentary constituencies, with an
average of £1.9 million in Term Loans per constituency.
£7.2bn
contribution to GDP
>87k
jobs supported
£2bn
generated in tax receipts
Details of Funding
Circle’s impact
in 2024 can be
found here
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202414
Reaching more
Powderhall Bronze Editions, a fine
art foundry in Edinburgh, tried to
get a loan from their bank but found
the process slow and painful.
Instead, they turned to us for help,
and really appreciated the speed
and service. Their loans have
since allowed them to reach more
customers, and set up a stand at the
Chelsea Flower Show.
Building up
Constructive & Co Ltd are a team of
makers who design, create and fit
bespoke furniture.
Having attracted more customers in
their local area, they used their loan
to invest in new machinery for their
workshop – so they could take on the
additional demand in house, and get
more headspace with their cash flow.
Looking ahead
England rugby captain Jamie George
and his business partner Rhys Carter
started The Carter & George Practice
to deliver elite physiotherapy
services to the public.
With big plans to grow, they took
out a loan to fund acquisitions of
other physio businesses, while using
FlexiPay to protect their cash flow.
We’re proud to support businesses across the country with agile,
competitive finance. Whether it’s long-term investment through
a Term Loan or everyday cash flow management using FlexiPay
or our Cashback credit card, we’re helping businesses seize
opportunities like never before.
We’d use Funding
Circle again and again
thanks to the great
service and ease.”
We found borrowing
to be an essential part
of taking us to the
next level.”
Once we’d been
approved, the funds
were in our account
in 24 hours or so.”
Our customers’ stories, investing
in growth and innovation
Scan to learn more Scan to learn more Scan to learn more
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 15
Reinventing
SME lending
Our cutting-edge technology and data platform is
constantly evolving, enabling more small businesses
to access the funding they need to win.
We combine our unique behavioural and performance data from over
150,000 Term Loans and nearly 230,000 FlexiPay transactions with publicly
available sources over nearly 15 years to give us a deeper understanding
of SMEs.
Our approach to SME credit risk, using machine learning tools and approaches
and combining public and proprietary data, gives us a competitive edge. Our
ability to discriminate risk better than the bureau scores enables us to deliver
superior customer outcomes and launch new products.
Risk model evolution
Building on over ten years’ worth of data, our ninth-generation risk models outperform bureau scores by a
factor of three. This allows us to streamline the customer journey and balance risk insights with a frictionless
customer experience.
Technology and data
Open banking
Commercial Credit Data Sharing
Bank statement
Application
Financials
Internal behaviour
Consumer bureau
Commercial bureau
Gen 3
2015
Gen 4/5
2016
Gen 6
2017
Gen 7
2018
Gen 8
2019
Gen 9
2023
Our performance data so far
150,000
Term Loans
228,000
FlexiPay transactions
Learn more about
our technology
and data
STRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 202416
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Our proprietary technology platform
is designed to provide customers with
quick and easy access to finance.
Built-in flexibility and scale enable us
to successfully expand our product
range and continually improve the
digital customer experience. Today, we
see customers engage more frequently
with our broader range of products.
Use of AI
AI is at the core of our lending and we are
investing in the transformative potential of
Generative AI (“GenAI”) to benefit both our
customers and employees.
l We have implemented GenAI tools to enhance
employee productivity.
l We are actively exploring further opportunities
to streamline and improve the customer
experience, from loan origination to ongoing
customer service.
l In 2024, we established technical and
governance frameworks to ensure the ethical,
secure, and effective use of GenAI as we expand
its applications in 2025.
2024 highlights: scalable
platform with ongoing
product releases
l Scalable platform managing 36% loan
application growth.
l >100% transaction growth and 3x growth in
monthly active users on our app.
l Deployment of improved product features and
customer experience such as an increase of 20%
engineering productivity.
l Launch of Cashback credit card and Growth
Guarantee Scheme loans.
3x
better risk
discrimination
77%
instant
decision
6 min
application time
24 hrs
funds in account
79
NPS
See our Technology risk on page 62
STRATEGIC REPORT
17Funding Circle Holdings plc | Annual Report and Accounts 2024
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Our products
Our diverse product range enables businesses to borrow,
pay later and spend. We meet a broad range of finance
needs through our product suite, all with our trademark
ease, speed and instant decision technology.
Borrow
Term Loans
Loans for long-term investment or working
capital purposes to support business growth
or long-term cash flow management.
l Loan sizes of £10,000 to £750,000.
l Available from six months to six years.
l Amortises monthly.
l Marketplace offering for SMEs, opening
the door to finance solutions from across
the market.
Case studies
l ANNA Cake Couture used their
loan to grow by expanding their
kitchen, creating more jobs and
opening a new office.
l Studio Gauthier used their loan
to expand their restaurant by
renovating and refurbishing.
Scan for
product details
STRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 202418
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Pay later
FlexiPay line of credit
Flexible line of credit for paying bills, supplier invoices
and managing cash flow using bank transfer or card.
l Businesses can pay bills directly to suppliers or into
their bank accounts for a fixed fee.
l With flexible terms and billing, small businesses can
repay in 1, 3, 6, 9 or 12 months.
l Credit limit up to £250,000.
Spend
NEW
Case studies
l Carter & George were able to protect their cash
flow and do acquisitions of SMEs.
l Beauty Boutique were able to invest in medical
machinery as the line of credit helped with their
cash flow.
Scan for
product details
Scan for
product details
Cashback Business
Credit Card
Cashback credit card for everyday
business spending.
l Launched the Cashback credit card
in Q3 (beta), with full roll-out in Q4,
following customer feedback pointing
us in the direction of a credit card for
everyday transactions.
STRATEGIC REPORT
19Funding Circle Holdings plc | Annual Report and Accounts 2024
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
84%
equal opportunities
171
Impact Days taken
91%
aligned to values
51
Circler events and initiatives
81%
bring their authentic self to work
1,364
volunteering hours in 2024
Our values
Our people
Backing our
people
’
s growth
Gender pay gap
Gender breakdown
(as at 31 December 2024)
1. Includes those in levels CEO -3
Other metrics
Obsess over the customer
Live the adventure
Think smart
Be open
Stand together
Make it happen
All Circlers
Mean pay gap Median pay gap Women in leadership
Executive Committee ExCo and direct reports
1
Group Board
42%
25%
37.5%
43%
57%
58%
75%
62.5%
20.4% 27.1% 35%
17.4% 26.1% 34%
22.4% 30.5% 32%
18.5% 27.1% 34%
21.4% 32.2% 31%
2024 2024 2024
2023 2023 2023
2022 2022 2022
2021 2021 2021
2020 2020 2020
Female Male
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202420
CircleIN
It is vitally important to invest in our people, their
understanding of the business, our customers and
our products, and their personal development.
To reconnect Circlers and reinforce our mission,
strategy and culture, we brought our team
together for our first ever CircleIN event.
Hosted on site in our newly refurbished office
space, Circlers spent an afternoon hearing from
our leaders on our strategy, mission and evolving
product suite, meeting our customers, and learning
more about other parts of the business. Alongside
this, we shared information on our development
programmes and our Circler groups, and gave an
opportunity for Circlers from across the business
to connect.
Our people (“Circlers”) are central to all that we do
at Funding Circle. 2024 was a significant year for our
business, as we undertook a number of large strategic
changes, which tested our resilience. Thanks to the
contributions of everyone working at Funding Circle,
we continue to build a better, stronger business together,
as the wider social and economic environment has
shifted in the post-pandemic years.
As we evolve our business strategy, we have come a long
way and made big strides under our strategic people
core foundation, “High Performing Teams Executing
Brilliantly”. We have continued to nurture a strong, diverse
and unique culture underpinned by our values. We remain
fully committed to our hybrid model, balancing flexibility
with in-person collaboration to enable our teams to
collaborate, be productive and develop at Funding Circle.
Backing high performance
We believe in excellence and challenging ourselves to
set new standards. We believe it is possible to create
an inclusive environment and a supportive culture, but
equally one where we can challenge each other to set
new standards and push ourselves to achieve more.
This is the core philosophy underpinning “High Performing
Teams Executing Brilliantly”. We continue to place a
strong focus on developing a high performance company,
embedding performance, ownership and accountability
further into our culture. Sitting alongside the Company’s
Objectives and Key Results (OKRs) framework, we have a
well established cadence of goal setting for all Circlers,
anchored in our business context and personal growth
journey. Performance is assessed through an individual’s
impact on the business on a biannual basis, alongside our
value-based behaviours to measure how we achieve
our goals.
Similarly, our tools and data for helping us calibrate
how we measure performance consistently and through
multiple lenses are applied rigorously and equitably
across all parts of the business. Our ambition is high
performance, and we reward those who stretch
themselves to go further.
Looking ahead, in 2025 we will be investing further in
resources to enhance our high performance philosophy,
both in how we feed back to each other and how we
recognise Circlers for their efforts. We will also be
focusing on continuing to build our career frameworks,
to ensure consistency of standards and progression
pathways across teams.
Backing personal growth
We embraced a “best of both” philosophy as we emerged
from the pandemic and entered the world of hybrid
work. Now into our fifth year, we continue to operate a
model which provides all Circlers with flexibility whilst
retaining the best of what we know and love about
working together in person. To support this, we invested
in a 100 day refurbishment programme to redesign our
office space in 2024. We remain fully committed to a
flexible and hybrid approach, but we strongly believe that
in-person collaboration is an important element to enable
our teams to achieve more.
We continued to empower Circlers with resources to
support their growth and development. To support
newly promoted or hired managers at Funding Circle,
we launched the Emerge programme. Emerge is a
blended development offering designed to give our
managers the tools and knowledge they need to
successfully manage and coach for high performance.
We also invested in our leadership with the launch of
Elevate, a development initiative to support our senior
leaders, enhance their leadership capabilities and further
embed our leadership commitments.
More widely, backing growth and development remains
a core foundation of our Circler experience. Throughout
2024 we hosted 230 training events and 610 Circlers
(84%) took the opportunity to further their professional
growth. 2024 saw Funding Circle’s first Growth Week
as part of a dedicated month-long development
series. Anchored around the pillars of ownership,
entrepreneurship and commercial mindset, Circlers
engaged with live sessions and curated content to
enhance their future performance.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 21
Our people continued
Technology apprenticeships
In 2024, we sponsored our third cohort of technology
apprentices, in line with our ambition to create opportunities
for all and our commitment to building an inclusive and
diverse workforce. We welcome all backgrounds and
experiences from those looking to start their career in
technology, whether that be an early career technologist
seeking out a training opportunity and a place to put
their knowledge into practice, a career changer with
significant experience in another field looking to kick-start
their professional journey within a technical environment,
or an existing Circler looking for an opportunity to pivot
their career into technology and transfer their skills and
experience to further serve our customers.
Technology apprenticeships have provided us with the
opportunity to build stronger gender and ethnicity equity
in our teams and create a pipeline of future female and
ethnically diverse talent in technology.
Q&A with Jennie Woods, VP, Engineering
Q
What drives you to lead our Engineering
teams at Funding Circle?
I’m driven by the opportunity to lead diverse teams
that build products which enable SMEs to thrive – it’s
incredibly rewarding.
Q
What do we do to change the under-
representation of women in technology?
We take a multi-faceted approach to increase female
representation. We attract diverse talent through
initiatives like our apprenticeship scheme, which
provides an alternative route into the industry for
people from a variety of backgrounds. We ensure
fair hiring practices by using gender-neutral job
descriptions, diverse interview panels, and bias
training for interviewers. To retain female talent,
we offer flexible work arrangements, provide
development programmes, and foster a supportive
environment through employee resource groups.
Q
Why is building a female future talent
pipeline important?
Diversity and inclusion are core to our culture. We
believe diverse teams are more innovative, make
better decisions, and better represent our customers.
By fostering a supportive environment and building
a strong female talent pipeline, we ensure continued
innovation and success for Funding Circle.
Q
What are the biggest successes or learnings
you’ve seen from Funding Circle’s hiring and
development of technology apprentices?
The programme has successfully attracted and
developed diverse talent, fostering a more inclusive
and innovative workplace.
Apprenticeships have
proven to be an effective
way to identify and
develop high potential
individuals with strong
technical skills and a
passion for technology. Many
apprentices have gone on to have
successful careers within Funding Circle.
Recognising the importance of continuous
improvement, we have introduced the Apprentice
Academy to provide dedicated mentorship and
ongoing support for apprentices throughout
their journey.
Q
What initiatives in technology have helped
ensure there is time available for ongoing
professional development?
Last year, our Engineering team achieved a notable
increase in its productivity. A key contributor to this
success was the implementation of an AI Copilot. By
automating low complexity tasks, the Copilot empowers
engineers to concentrate on higher value business
challenges supporting their continued development.
This tool has proven particularly beneficial
for entry-level engineers, including apprentices.
They receive real-time code feedback and
explanations, facilitating a smoother onboarding
process and accelerating their professional growth.
These insights help them understand existing code
and improve their coding skills.
It’s amazing
to see how far
you’ve come
at the end.”
Ella Bastian, Engineer
Graduate apprentice
Diversity, equity and inclusion
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202422
85%
identify as
female
Of our technology apprenticeship cohorts:
69%
are of Black,
Asian or multiple
ethnicity heritage
23–52
age range
We have created a robust framework for the development
and support of apprentices in our technical teams making
the required time, resource and training available to
ensure successful completion of their apprenticeship,
and that they are set up for success in their onward
career. To date, 100% of apprentice Circlers have
received a distinction grade in their formal qualification,
the highest available level, and have proven to be able to
operate above the expected level at time of completion.
Circler-led groups
Our Circler-led groups remain at the forefront of our
culture as a driving force for positive change. Across our
six Circler-led groups there were events and initiatives in
2024, with highlights including 1,364 volunteering hours
taken. Circlers are given two paid “Impact Days” per year
for charitable contributions to causes important to them.
Women @ FC
l Building a community where women connect,
thrive and win.
Parents @ FC
l Providing a supportive space and a network for
working parents and carers.
Neurodiversity @ FC
l Spearheading the discussion about how neurological
differences add value, and building the infrastructure
for an equitable and accessible workplace.
Let’s Talk About Heritage
l Educating on the experiences of minorities, celebrating
racial diversity, and creating a safe space to continue
engaging in dialogue.
FC Impact
l Coming together and giving back to communities in
need, raising awareness for worthy causes, and making
an impact through charity and volunteering projects.
Circle of Pride
l Championing inclusion for all by building an open
community and celebrating LGBTQIA+ contributions.
To further champion flexible working in support of the
wellbeing of our Circlers, we joined Working Families,
a charity for parents and carers. We have worked with
the charity to advance our policies and practices to
better recognise and empower our Circlers to achieve
their full potential alongside their parenting and caring
responsibilities. We continue to drive a culture of
productivity that embraces individual and personal needs.
Each year we run reverse mentoring initiatives and we
focused on neurodiversity in 2024. Circlers volunteered
throughout Q4 to reverse mentor managers on
neurodiversity to further bolster our manager population
in its ability to manage neurodivergent individuals and
educate our individual contributors on the importance of
making the necessary accommodations when working
with neurodivergent teammates. We launched several
other mentorship schemes and have established a
certification programme. Currently we have 52 internally
certified mentors across departments and of varying
seniority whose experience can be called upon. The
Mentoring in Tech (“MinT”) scheme, a programme
connecting women and gender minorities in technology
with mentors across Funding Circle, specifically aims to
support female Circlers in achieving their individual goals.
Diversity, equity and inclusion (“DEI”) statement
Our recruitment process is designed to ensure
all applications, including those from disabled
persons, are treated equally and fairly.
We’re here to build the incredible at Funding
Circle. We know we can only achieve this through
an inclusive and diverse culture where Circlers
of all backgrounds feel confident in bringing their
whole selves to work, where they can contribute
their ideas, have opportunities to be successful,
and have their talents nurtured. Through
empowering our people we are not only building
something incredible for our customers, but an
incredible place to work too.
We live by our Company values and cherish
our diversity; be that culture, gender, race or
ethnicity, sexual orientation,
gender identity and expression,
disability, marital status, age,
nationality, religion, of thought,
belief, experience or expression.
We stand together, as one.
Awards in 2024
l Luke Santon – recognised as one of LGBT’s
Great 2024 30 Under 30 Role Model.
l Kate Turgoose – named in Innovate Finance’s
Pride in FinTech Powerlist.
l Antje Bustamante Mena – won HotTopic’s Global
CDO 100 Award.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 23
Environment, social and governance (“ESG”)
Delivering on our
commitments
At Funding Circle we are committed to contributing positively to our
communities; we do this through the business finance we provide
to our SME customers who are often underserved by mainstream
finance, and through sound and responsible ESG practices that
support broader societal and environmental efforts.
Our approach to ESG considers relevant risks and
opportunities, and is informed by our engagement
with our strategic stakeholders. For more detail on
corporate governance and risk management, and our
climate-related disclosures, please refer to the sections
referenced below.
Relevant policies
can be found on
the Company’s
Sustainability
webpage
l More detail on corporate governance is set
out on page 70
l More detail on risk management is set out
on page 51
l Our Non-Financial and Sustainability Information
Statement is set out on page 39
l Our climate disclosures consistent with the
Task Force on Climate-related Financial
Disclosures (“TCFD”) are set out on pages 28 to 38
STRATEGIC REPORT
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202424
Our ESG framework sets out our goals and
roadmap for each strategic pillar
DEI
Our ambition and
commitment
To be best in class and
live by our DEI statement,
building an inclusive and
diverse culture.
Achievements in 2024
l Stable key metrics in 2024, with
continued strong sentiment for inclusion
and belonging expressed in our 2024
engagement survey.
l Delivery of all-Company CircleIN internal
event, celebrating our culture and
spotlighting Circler-led groups, alongside
a knowledge-sharing networking event
to celebrate inclusivity and diversity, led
and delivered by employee groups across
the business.
l Delivery of 51 Circler group initiatives over
the course of 2024, including the MinT
scheme by Women@FC, and representing
Funding Circle at the annual London
Pride celebrations.
l Partnered with Working Families, the
UK’s national charity for working parents
and carers.
Goals and roadmap for 2025
l Continue to make progress against key DEI
metrics and targets, including women in
leadership and the gender pay gap.
l In Q1 2025, we plan to undertake a review
of our approach, plan and goals for DEI, to
ensure we continue to focus on building a
diverse and inclusive culture.
Social impact
Our ambition and
commitment
To back a diverse and
thriving SME customer base
– creating jobs, fostering
financial inclusion and having
a positive impact on UK
SMEs, entrepreneurs and
their wider communities.
Climate and
environment
Our ambition and
commitment
To support initiatives
that help drive progress
towards net zero, and
contribute meaningfully
to climate, nature and
biodiversity outcomes
for healthier communities.
Governance and
risk management
Our ambition and
commitment
To meet shareholder
and investor expectations,
and be viewed positively
in the market.
Achievements in 2024
l As outlined in Our Customers on page 14, our
lending supported 87,500 jobs, £7.2 billion in
GDP, and helped businesses in every one
of the 650 parliamentary constituencies.
l We renewed our partnership with Thrive
Mental Wellbeing, providing free or
discounted access to its NHS-trusted
mental health app to all SMEs in the UK.
l We continued to back underserved social
entrepreneurs through our partnership
with Hatch Enterprise for a third year, also
supporting 72 founders through 93 volunteer
hours of employee mentoring.
l Our Circlers contributed 171 “Impact
Days”, 1364 hours, volunteering with
environmental and people charities
including NishkamSWAT, Hatch Enterprise,
and London Wildlife Trust.
Goals and roadmap for 2025
l Continue to identify internal and external
opportunities to further embed our
ambition of delivering positive social and
sustainability outcomes for our customers.
l In line with our core mission, build on
our strong partnerships with Hatch,
Thrive and others to support the wider
SME ecosystem.
Achievements in 2024
l We achieved a 35% reduction in GHG
emissions (excluding 3.15 financed
emissions) due to the sale of our US
business, head office consolidation, and
a real-world reduction in business travel.
l We brought forward our interim net zero
target for emissions within our control
(scopes 1, 2 and 3 business travel) from
2030 to 2025, but retiring our previous net
zero stretch target for supplier, employee
commuting and waste emissions due to
a need for further work to understand the
drivers and scope for influence.
l We developed our approach to Beyond
Value Chain Mitigation (“BVCM”), retiring the
previous terminology on carbon neutrality,
while retaining our commitment to climate
and nature contributions in line with the
Science Based Targets initiative (“SBTi”)
BVCM principles.
l Our partnership with Earthwatch Europe’s
Tiny Forest initiative was featured in the
UN Global Compact UK’s “Nature-based
Solutions for Business” webinar series.
Goals and roadmap for 2025
l Progress our restated interim net zero
targets towards our 2050 net zero
ambition, including our accelerated interim
(2025) partial net zero target.
l Continue investing in UK-focused BVCM
activities, including verified and robust
carbon credit projects, to contribute
societal nature and climate benefits.
Achievements in 2024
l We published our Human Rights Statement
as planned.
l We developed our Climate Risk
Management Framework (“CRMF”), and
our disclosures are now aligned to the
TCFD recommendations, considering
proportionality and materiality and subject
to continued evolution in certain areas.
l We continued our engagement on
sustainability issues related to SME lending
with industry working groups under UK
Finance and the Partnership for Carbon
Accounting Financials (“PCAF”).
l We continued to uphold the highest
standards of corporate governance and
risk management more broadly, which are
covered in the sections starting on pages
51 and 70.
Goals and roadmap for 2025
l Prepare for UK introduction of ISSB/IFRS
S1 and S2, and changes to the 2024 UK
Corporate Governance Code.
l Understand how our current efforts align
to transition planning guidance and identify
priorities for further development.
For more please see the
Our People section on page 20
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 25
Environment, social and governance (“ESG”) continued
Social impact
In line with our mission to back SMEs with business finance,
we also aim to deliver and support initiatives that bring real
benefits to small businesses and local communities.
Our customers and SMEs
We value the contribution of SMEs to the economy,
through the jobs they create and the potential multiplying
effect they can have on wider society. Our lending
helps businesses invest and scale up, but also sustains
employment and stability locally. We recognise the
importance of financial inclusion – our borrowers sit at the
heart of diverse communities, and the business finance
we provide supports SMEs in every corner of the UK.
Our primary impact as a business is the multi-faceted
positive impact of our lending on society. Given the
materiality of this impact versus our other social and
environmental impacts, we work with Oxford Economics
each year to carry out an economic impact analysis
focused on our efforts and the outcomes they drive. In
2024, Funding Circle’s Term Loans and FlexiPay lending
supported 87,500 jobs, £7.2 billion in GDP, and helped
businesses in every one of the 650 parliamentary
constituencies. Please see page 14 for more detail.
In 2024 we continued our partnership with Thrive
Mental Wellbeing (“Thrive”). Thrive’s NHS-trusted app
provides help anytime, anywhere. In our 2023 Resilience
in SMEs report, 88% of respondents told us employee
wellbeing and mental health was an area they wanted
to focus on, with 79% reporting they would greatly value
external support in this area. We are also giving access to
Thrive’s unlimited in-app therapy to our most vulnerable
customers, providing them with an alternative to NHS
pathways which often have longer waiting times.
Other societal contributions and commitments
Funding Circle is a participant of the United Nations
Global Compact and the UN Global Compact Network
UK, and adheres to their principles-based approach
to responsible business on human rights, labour,
environment, and anti-corruption. We publish our
Communication on Progress annually.
Please also see our Non-Financial and
Sustainability Information Statement on page 39
We are a signatory to the HM Treasury Women in Finance
Charter and the Investing in Women Code.
We renewed our collaboration with Hatch Enterprise for
a third year, contributing to its mission to build a fairer,
more equitable and more diverse business landscape.
In the 12 months to September 2024, our employees
contributed 93 hours of volunteer mentoring, supporting
72 founders. Through its programmes, Hatch supports
underrepresented entrepreneurs from across the UK to
launch and grow successful businesses that also have a
positive impact on their communities. Its work is targeted
at those typically underrepresented in entrepreneurship,
including women and other marginalised genders, people
from ethnic minority backgrounds, people with disabilities
and neurodivergent people.
Alongside our social impact, we want to contribute
meaningfully to the environment, and our approach focuses
on BVCM activities that help move towards societal net
zero, by delivering positive climate and nature outcomes
with co-benefits for communities. More detail on this is
set out on page 31.
Circlers participated in an annual Tower Climb charity
event in March 2024 and fundraised over £3,000 for
Great Ormond Street Hospital Children’s Charity.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202426
Mathew Keech
Company name: HEJ Coffee
Borrower type: Term Loan
HEJ Coffee is an artisan neighbourhood coffee
shop that roast their beans in house at their
London roastery, allowing customers to enjoy
their coffee whilst watching roasters create
exceptional batches of coffee. They play an
active part in their neighbourhood, celebrating
individual identities and championing local
charities and organisations – from including
customer photos on their wall of fame, to
sponsoring local schools and an LGBTQIA+
homeless shelter, and even building a
grassroots football club, HEJ FC.
In addition to being an important part of the
community, Mathew and his team are making
sustainability a key mission for HEJ Coffee.
Leading in their industry, they are in the
process of becoming B Corp certified. They
have already invested in a 100% electric fleet,
and are changing how they package and sell their
coffee, to continue reducing carbon emissions
and materials.
Since 2019, they have delivered significant
environmental savings:
l More than 231,000 coffee bags and 38,000
cardboard boxes were redirected from landfill.
l Over 88 tonnes of carbon emissions were
averted by using electric vans or bikes
for deliveries.
l They donated £23k towards planting over 2,300
trees in urban areas.
HEJ Coffee came to Funding Circle in 2019, after
their bank could not see their vision or support
them in delivering their plans efficiently. Funding
Circle fuelled the company with funding quickly,
allowing Mathew to secure the equipment and
begin the process of building the state of the art
all-electric roastery.
We needed a partner that
had faith in our ideas and
could see our vision with the
capacity to help us make
it happen; with Funding
Circle we got exactly that,
a quick decision and a
straightforward process,
allowing us to get on with
our business plans.”
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 27
Environment, social and governance (“ESG”) continued
Climate and
environment
At Funding Circle, we are committed to fostering a
resilient and sustainable business model that contributes
to the broader global effort of mitigating climate change
and protecting the environment. Our approach to
environmental responsibility is being proportionately
embedded in our operational strategies, recognising
the growing importance of climate-related risks and
opportunities for the wider UK economy, but limited
idiosyncratic risks to Funding Circle’s business model.
This section incorporates disclosures consistent with
the Task Force on Climate-related Financial Disclosures
(“TCFD”) recommendations, in compliance with the
Financial Conduct Authority’s (“FCA”) UK Listing
Rules
1
. Our disclosures are now aligned to the TCFD
recommendations, considering proportionality and
materiality and recognising that certain areas will
continue to be deepened and enhanced over many years.
This section includes greenhouse gas (“GHG”) emissions
reporting per Companies Act 2006 regulations.
1. Strategy
Climate-related risks and opportunities
Funding Circle is an SME finance platform, providing
the technology, data and products to provide fast, fair
and hassle-free finance to SMEs and diversified lending
opportunities for institutional investors. Of the £2.8 billion
balances under management on our platform as of
31 December 2024, 98% are funded by third party
institutional investors and 2% by Funding Circle equity.
We have, however, chosen to incorporate all balances
under management, as well as defaulted loans, in our
assessment of climate-related risks to provide maximum
transparency to our stakeholders.
Following the sale of our US business on 1 July 2024,
Funding Circle operates only in the UK. We define short,
medium, and long-term horizons as one year or less,
one to five years, and more than five years, respectively.
These time periods are consistent with those used in
our Enterprise Risk Management Framework (“ERMF”)
and strategic planning, although we recognise that some
climate-related risks and opportunities will take decades to
materialise. The weighted average life of a Funding Circle
Term Loan under management
2
is between 24 and 36
months (i.e. within the current medium-term horizon).
Funding Circle’s business model means we have low
exposure to physical risks from climate change: a minor
operational physical presence, unsecured loan products
which do not rely on the borrower’s physical assets as
security
3
, maximum loan terms of six years, and a broad
geographical distribution of lending to SMEs across the
UK, as shown in Table 1. This means we are at low risk
of operational disruption, have no risk of damage or
devaluation of assets relied on for loan collateral, and are
similarly diversified to the broader UK economy with an
aim to maintain this diversification.
Funding Circle’s exposure to transition risks is also
structurally low due to its business model: lending is well
diversified across sectors in line with the broader UK
economy as shown in Table 2, around a third of lending
is to a broad spectrum of “carbon-related” sectors
4
, and
we support a diversified pool of institutional investors.
Furthermore, as our lending is unsecured
3
, we are not
exposed to the risk of transition-related devaluation of
physical assets used as loan security.
We recognise that physical and transition risks will have
wide-reaching and long-term impacts on all parts of
the UK economy. Although our exposure to these risks
through our lending is deemed low due to the absence
of physical collateral, we acknowledge that potential
disruptions to business continuity may make it difficult for
some impacted SMEs to maintain regular, uninterrupted
loan repayments. We therefore continue to invest in our
forbearance processes and capabilities so that we can
swiftly deploy the right support in the case of a climate-
related event whilst continuing to provide better access
to finance to SMEs in all UK sectors and geographies.
We continue to assess potential transition-related or
sustainable finance product opportunities following
an internal commercial review in 2023. However, we
have seen no change to the review’s findings of muted
customer demand and significant gaps in loan pricing
and institutional investor return expectations.
Beyond our on-balance-sheet lending, which comprises
96% of our greenhouse gas emissions, Funding Circle’s
largest source of emissions is from our supply chain,
as shown in Figures 1 and 2. These principally relate to
digital activities (including software, advertising and
cloud computing) and to purchased services.
Our assessment to determine the materiality of current
and potential future impacts of climate-related risks and
opportunities on Funding Circle’s financial performance
looked across our operations and value chain and
involved measuring emissions, including financed
emissions, a mixture of qualitative and quantitative
analysis, risk analysis in line with our ERMF, and
feedback from stakeholders and subject matter experts.
Due to the nature of our business model, climate-related
risks will only really manifest for us if they affect SME or
investor appetite, performance or liquidity (rather than
risks to any specific physical assets). Currently, we do
not consider there to be any financially material climate-
related risks or opportunities, nor do we foresee any of
significance materialising over the medium term. There
was no impact on our financial position, performance or
cash flows from climate-related risks and opportunities
in the reporting period. Our analysis is summarised
in Table 3.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202428
Table 1: Geographical lending distribution
UK Region
All balances
under
management
Balances on
balance sheet
South East 24% 25%
London 15% 15%
Midlands 15% 14%
North West 12% 12%
North East 10% 10%
South West 10% 10%
Scotland 5% 5%
East Anglia 4% 4%
Wales 3% 3%
Northern Ireland 2% 2%
Table 2: Sectoral lending distribution
Sector (based on SIC classification)
All balances
under
management
Balances on
balance sheet
Wholesale & retail 17.9% 20.4%
Other business activities 18.8% 18.2%
Health & other service
activities 12.7% 11.9%
Other manufacturing 5.5% 6.4%
IT & telecommunication 5.1% 5.4%
Hotels & restaurants 4.1% 3.6%
Finance 1.7% 1.6%
Construction & real estate 20.0% 18.6%
Automotive 4.6% 4.7%
Transport, storage &
communication 3.9% 3.7%
Manufacture of metal products 2.1% 1.9%
Manufacture of paper
products, publishing & printing 1.4% 1.3%
Manufacture of food products
& beverages 1.2% 1.2%
Agriculture 0.8% 0.8%
Electricity, gas & water supply 0.1% 0.2%
Mining & quarrying 0.1% 0.1%
Total “carbon related”
4
34.2% 32.5%
Note: In Tables 1 and 2, and Figure 1, we include defaulted loans for the
estimation of financed emissions and the climate-related risk analysis, whereas
defaulted loans are excluded when reporting balances under management
elsewhere in this Annual Report.
1. The Company has also considered the 2021 TCFD Annex and the Supplemental Guidance for the Financial Sector.
2. Term Loans make up 96% of balances under management, with the remaining balances being up to 12 months and corresponding to shorter-term open ended
products (Cashback credit card and FlexiPay drawn lines of credit).
3. The majority of Funding Circle’s loans under management are unsecured, with <5% subject to a debenture (floating charge). Funding Circle also provides SMEs
with access to a range of asset, vehicle and equipment finance solutions through its Marketplace. These products are arranged directly between the SME and
the third party provider and Funding Circle has no role in the delivery or management of the resulting loan.
4. Carbon-related sectors as defined in “Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures” (TCFD, 2021) and
highlighted in Table 2.
Scope 2 – location based 0.02%
Scope 3 – categories 1–14 3.49%
Scope 3 – category 15 (financed emissions
– balances on balance sheet) 96.49%
Fig.1: Total GHG emissions 2024 (location based)
by Scope 1
*
, 2 and 3 (categories 1-15)
Fig.2: Total GHG emissions 2024 (location based)
by Scope 1
*
, 2 and Scope 3 (excl. category 15)
Scope 2
2. Purchased electricity (location based) 0.7%
Scope 3
3.1 Purchased goods and services 79.4%
3.2 Capital goods 10.7%
3.3 Fuel and energy activity 0.2%
3.5 Waste generated in operations 0.4%
3.6 Business travel 3.9%
3.7 Employee commuting 3.2%
3.8 Upstream leased assets 1.5%
*
In 2024 we reclassified Scope 1 (gas heating of UK office) to
Scope 3 category 8, as explained on page 34.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 29
Environment, social and governance (“ESG”) continued
Climate and environment continued
1. Strategy continued
Climate-related risks and opportunities continued
Table 3: Summary of climate-related risks and opportunities
Category Driver Potential business impact
Horizon
(short,
medium,
long) Potential financial impact*
Transition risk Market: changes to SME
and/or investor demand
and preferences
Policy and legal: more
demanding climate
policy including
carbon taxes
Technology: need for
SMEs and suppliers to
transition to greener
technologies
Reputation: climate-
related compliance
or delivery failures
negatively impact public/
stakeholder perception
Strategic: increased SME or investor
demand for green finance products could
reduce demand for existing Funding
Circle products and/or require investment
in data and product innovation
Funding: reduced investor risk appetite
for SME lending or for certain sectors,
or reduction in available investor capital
(e.g. as a result of climate policy) may
constrain platform liquidity
Credit: financial pressure on SME
borrowers in higher carbon industries may
impact their ability to repay
Operational: compliance with more
onerous climate data, reporting or
other climate regulation or taxes could
increase costs for Funding Circle, SME
borrowers and investors; transition
investment by suppliers may increase
procurement costs
M, L
M, L
M, L
M, L
Reduced revenue:
l from lower demand for existing
products and services;
l from deteriorating borrower credit
quality in higher carbon sectors; or
l from write-offs, impairments and early
retirement of existing assets
Increased costs:
l from compliance costs or carbon taxes;
l from investment in data and product
innovation; or
l from suppliers passing on transition-
related costs
Reduced access to capital and liquidity:
l from changes to investor risk appetite
or liquidity
Likely to be below the threshold for
financial materiality in the medium term
Physical risk Acute: e.g. increase in
extreme climate-related
weather events
Credit: temporary interruptions to SME
borrowers’ operations affecting their
ability to repay
Reputation: insufficient forbearance tools
and processes exacerbate SME stress
and contribute to SME business closure
Funding: reduced investor appetite or
liquidity due to impacts of weather events
on borrower or investor operations
S, M, L Reduced revenue:
l from deteriorating borrower credit
quality;
l from customer boycotting;
l from lower demand for products
or services; or
l from write-offs and early retirement
of existing assets
Increased costs:
l from fines or litigation
Likely to be below the threshold for
financial materiality in the medium term
Chronic: e.g. alterations
in weather patterns,
rising sea levels
Credit: permanent changes to SME
borrowers’ operations or supply chains
resulting in structurally higher costs and
affecting their ability to repay
Funding: long-term changes in investor
risk appetite or reduced liquidity due to
chronic impacts on investors’ operations
L
Opportunities Market: changes to SME
and/or investor demand
and preferences
Increased SME demand for
transition-related finance
Increased investor demand for
transition-related or sustainable lending
S, M Increased revenue:
l from access to new and emerging
markets; or
l from new products and services
relating to climate transition, resilience
or adaptation
Increased access to capital and liquidity
(for the same reasons)
Decreased costs:
l from reduced reliance on volatile power
sources;
l from increased energy efficiency; or
l from less physical (e.g. paper) resource
use and waste
Likely to be below the threshold for
financial materiality in the medium term
Technology: innovation
in circularity, energy
efficiency and
renewables
Platform and marketing enhancements
to increase efficiency, reduce waste and
utilise 100% renewable electricity
M, L
*
For further detail on how we determine and define materiality for our climate-related risks and opportunities, please see page 28 and “Risk management” on
pages 33 to 34.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202430
Strategy, net zero and transition planning
The identification and analysis of potential climate-
related risks and opportunities have not driven any
changes to Funding Circle’s strategy, business model
or credit decisioning to date. Our strategy supports an
agile, low risk approach to the climate transition through
the continued evolution of a diversified loan portfolio, a
diversified investor base, and the ability to respond to
changing market demands for new products.
However, as a finance platform whose activities mirror
the wider UK “real economy”, we are mindful of the
broader economic impacts expected from the climate
transition and physical risks. We expect that the longer-
term impact from climate change on Funding Circle, its
customers and its investors will reflect overall changes
to UK GDP. While we will continue to engage with
relevant information and stakeholders to understand
these impacts, we remain committed to lending to SMEs
across a diverse geographic and sectoral distribution
and do not plan to impose risk appetite changes that
will alter our portfolio away from one that reflects the
broader, diversified UK economy. In response to growing
physical risks from climate change which may create
business continuity challenges for some SME customers,
we continue to invest in developing our forbearance
measures to better support customers experiencing
temporary repayment difficulties.
We are beginning to see early signs of institutional
investor interest in our climate policies and financed
emissions data. We expect this to increase over
time, driven by changing reporting and regulatory
requirements, and will respond as needed, leveraging our
platform technology and expanding data lake. However,
the lack of emissions reporting requirements for SMEs or
straightforward, standardised and affordable tools and
methodologies for them to use is currently an obstacle to
collecting primary data.
We participate in industry-led working groups, actively
engaging on sustainability issues and a just transition
for SMEs – specifically, the UK Finance Industry Working
Group on ESG implications for SMEs, and the PCAF (UK
chapter) working group on Business Loans and Unlisted
Equity, which aims to explore the challenges in calculating
SME emissions and support the ongoing development of
the PCAF Standard.
More broadly, recognising the need for all businesses
to proactively support the transition to a low carbon
economy, we have an ambition to reach net zero by
2050 across all emission scopes. In line with the latest
climate science, we will endeavour to achieve this
through absolute emissions reduction and offsetting the
remaining hard-to-abate emissions by purchasing high
quality carbon credits.
In 2024, we updated our interim climate target, reflecting
a deepening of our transition planning efforts. Previously,
we had in place a stretch target to reach net zero by 2030
for our operational emissions (Scope 1, 2 and 3 excluding
financed emissions). We have evolved this to an interim
target to achieve net zero for Scope 1, 2 and 3 business
travel in 2025 (“interim (2025) partial net zero target”),
which we are currently on track to meet without any
material costs. We have significant constraints around
data accuracy and level of influence for the remaining
Scope 3 categories and as such have decided to retire
the previous 2030 stretch target for these. We intend to
focus efforts in 2025 on improving data accuracy and
assessing potential levers, influence and dependencies,
with a view to setting new interim targets as appropriate.
This approach also allows us to take account of the SBTi’s
revised Corporate Net Zero Standard which is under
development at the time of publication.
Meanwhile, we continue to develop our BVCM approach,
aiming to contribute to the wider societal transition to
net zero.
In 2024, we expanded our environmental contributions
towards nature-based and biodiversity projects in the
UK. Through our partnership with Earthwatch Europe,
we supported the planting of five new Tiny Forest sites
across the UK as part of the Local Authority Treescapes
Fund. With its programme of planting small forests in
ecologically deprived areas nationwide, Tiny Forest
reconnects people with nature, enhances wellbeing,
helps mitigate the impacts of climate change and
provides nature-rich habitat to support urban wildlife.
The partnership was featured in the UN Global Compact
Network UK’s webinar series on “Nature-based Solutions
for Business”. We also partnered with GreenTheUK,
the Blue Marine Foundation and Plantlife, to support
initiatives helping native oyster restoration in the Solent
and the Sussex Kelp Recovery Project, as well as
protecting temperate rainforests in Devon and Cornwall.
We continue to review the evolving technology and
regulatory landscape for carbon credits and intend to
undertake further scoping and due diligence to select
appropriate carbon credits to offset the small tail of
hard-to-abate emissions for our interim (2025) partial net
zero target.
Resilience of our strategy
In 2023/24, Funding Circle engaged external experts to
support the qualitative analysis of its lending in relation to
physical and transition risks. This was based on loan-level
data covering financed emissions (calculated in line with
the PCAF methodology), geography, sector and principal
outstanding as at 31 December 2023, and refreshed for
31 December 2024. We assessed total balances under
management, including defaulted loans, and balances
held on Funding Circle’s balance sheet, with both
exhibiting similar profiles.
Each sector was assigned an overall transition risk
vulnerability rating based on several risk factors:
regulation, raw material cost, technology, market demand
fluctuations, and reputational risk. Physical risks were
assessed through sectoral and geographical lenses.
Inputs were sourced from external research, literature
and tools including the FCA’s Climate Financial Risk
Forum (“CFRF”) climate scenario analysis narrative tool
and the World Bank Group’s carbon pricing dashboard.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 31
Environment, social and governance (“ESG”) continued
Climate and environment continued
1. Strategy continued
Resilience of our strategy continued
Our analysis showed a small proportion of balances, both on balance sheet and under management, that are to sectors
with higher exposure or vulnerability to climate-related risks, as shown in Table 4.
Table 4: Sectors with higher exposure or vulnerability to climate-related risks
Sectors assessed as having high vulnerability to climate risks
% balances on
balance sheet
% balances
under management
Transition risks:
Transport, storage and communication 3.7% 3.9%
Electricity, gas and water supply (“Electricity and Utilities”) 0.2% 0.1%
Total 3.9% 4.0%
Physical risks:
Agriculture 0.8% 0.8%
Total 0.8% 0.8%
We used the Network for Greening the Financial System (“NGFS”) scenarios to assess Funding Circle’s climate
resilience. This was done at a relatively high level, commensurate with the materiality of our climate-related risks and
opportunities. Three diverse scenarios were considered, including one aligned to the latest international agreement
on climate change (Net Zero 2050). The results of our scenario analysis, conducted in 2024, are summarised in the
table below and show strong resilience as at the reporting date, with existing plans to develop our climate-related data,
insight and reporting capabilities sufficient under all scenarios.
As Funding Circle’s balances under management mirror the sectoral diversity of the broader UK economy, our exposure
to any economic shocks or persistent declines would likely be in line with UK GDP. All scenarios are expected to have a
negative impact on GDP by 2050 versus a baseline of no physical or transition risk.
Table 5: Summary of climate scenario analysis
Potential impacts
Characteristics
NGFS – Orderly Transition
(Net Zero 2050) NGFS – Disorderly (Delayed Transition)
NGFS – Hot House
World (NDCs)
2050 GDP vs. baseline of
no physical/transition risk
-3% -4.6% to -4.7% -5.7% to -6%
Transition
Policy reaction Immediate, smooth No additional actions until 2030 No additional pledges vs. today
Technology change Fast Slow then fast Slow
Electrification,
decarbonisation and
energy efficiency
Rapid and steady Slow then fast Slow
Overall transition risk Medium High Low
Physical
Temperature rise 1.4C 1.6C 2.6C
Physical risks Low Medium High
Impacts and considerations
Funding Circle time
horizons affected
ST, MT, LT LT LT
Potential impact on
climate-related risks
and opportunities
(see Table 3)
Heightened transition risks,
particularly for “carbon-related”
sectors, may put strain on SME
profitability and require market-wide
investment in climate compliance.
Muted transition risks initially then
significantly heightened after 2030,
with a shock to revenues and costs likely
felt across most sectors, with “carbon-
related” ones particularly exposed.
Limited transition risks with even
“carbon-related” sectors having a long
time to adapt. Physical risks will increase
significantly over the longer term with
far-reaching economic consequences.
Strategic
considerations
Continued investment in forbearance
tools and processes will support
SMEs experiencing short-term
repayment challenges.
Continued planned enhancement
of Funding Circle’s climate reporting
capabilities will support compliance
with future regulation.
Continued investment in forbearance
tools will better support businesses
suffering short-term stress in relation
to transition-related economic shocks.
Continued investment in forbearance
processes and tools will better
support businesses suffering business
continuity impacts from physical
climate events.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202432
This qualitative approach is proportionate to the
materiality of Funding Circle’s climate-related risks and
opportunities. We will continue to refresh and enhance
this analysis but do not currently have plans to invest
in further quantitative analysis as we do not foresee it
providing actionable outputs for the time being.
2. Governance
Board oversight
The Board of Directors at Funding Circle holds ultimate
responsibility for climate-related risks and opportunities.
Matthew King, Non-Executive Director, continued as
Board-level sponsor for climate in 2024, providing
support and challenge to management, drawing on his
significant financial services risk management experience
as well as knowledge of climate change from his Non-
Executive Director role in a resource-intensive industry.
Geeta Gopalan also has climate-related financial services
risk management skills, and Helen Beck has undertaken
training on transition planning.
The Board reviews climate-related issues as part of
its overall risk management and strategic planning
processes. This includes reviewing analysis on physical
and transition risk heatmaps and climate scenarios which
demonstrate that climate-related risks and opportunities
are not likely to be material in the medium term. The
Board has taken this into account in its oversight of the
Group’s strategy, with no trade-offs being required at
this point. In addition, it delegates certain matters to
two Committees, which are included in their Committee
Terms of Reference:
l the ESG Committee (“ESGC”), chaired by Andrew
Learoyd and responsible for oversight of the Group’s
ESG strategy including climate-related opportunities
(see ESG Committee Report on page 88); and
l the Audit and Risk Committee (“ARC”), chaired by Geeta
Gopalan and responsible for oversight of climate-
related (and broader ESG) risk management. Climate-
related risks are assessed in line with the ERMF and
reviewed and approved by the ARC annually.
The Board considers its skills and competencies in
relation to climate-related risks and opportunities
annually. Following Matthew King’s retirement from the
Board, it will continue to consider ways of maintaining
Board-level expertise on climate and other ESG topics,
with this being a skill taken into consideration in the Non-
Executive Director appointment process. The skills of
Geeta Gopalan and Helen Beck referred to above provide
a strong competency framework, particularly given
climate-related risks and opportunities are not likely to be
material for Funding Circle over the medium term. Further
external training has been provided in the past and will
continue to be delivered as required as we deepen our
climate scenario analysis and develop transition plans.
Management’s role
Executive responsibility for climate-related risks and
opportunities is held by the CEO, who delegates climate risk
management to the CRO. Management responsibility for
execution and delivery of the Group’s climate (and broader
ESG) strategy sits with the Chief Legal Officer and Company
Secretary. Oversight is provided by the Management Risk
Committee (“MRC”) which reports into the Board-level
Committees described above.
We have introduced controls and procedures
proportionate to the level of materiality of climate-related
risks and opportunities. As such, the principal procedure
is to identify and assess climate-related risks in line with
the ERMF which is reviewed by the MRC and approved
by the ARC annually. In addition, in 2024 Funding Circle
established the CRMF, which set safeguard thresholds
for climate risk appetite and was approved by the
ARC. The combination of the ERMF and CRMF ensures
climate-related risks are integrated into our broader risk
management processes and executives are updated
regularly.
3. Risk management
Identification and assessment of climate-related risks
Funding Circle evaluates the impact of climate-related
risks on its own operations and its balances under
management, across physical and transition risk drivers.
As well as monitoring external developments to assess
any increases to risk drivers, in 2023/24 we undertook
a loan portfolio risk heatmap exercise. This assessed
the level of exposure to physical and transition risks for
all balances under management and underpinned our
initial scenario analysis described above. The heatmap
and scenario analysis results informed this year’s annual
ERMF Risks and Control Self-Assessment.
The materiality of potential climate-related impacts is
assessed using a risk classification matrix which rates
the inherent likelihood of the risk occurring and the
impact on the business in financial and non-financial
terms. In assigning ratings, we consider both qualitative
factors (such as effect on customers, media coverage
and business continuity) and quantitative financial
thresholds ranging from “critical” (financial impact of £5
million or more in a 12-month period) to “minor” (financial
impact of £250k or less in a 12-month period) over a
medium-term horizon.
As with 2023, policy and legal transition risks were
the main driver of climate-related risks to Funding Circle,
with continued developments in reporting obligations
likely to impact Funding Circle, its SME customers and
institutional investors.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 33
Environment, social and governance (“ESG”) continued
Climate and environment continued
3. Risk management continued
Identification and assessment of climate-related risks
continued
Our 2024 risk assessment identified climate as a level 1
ESG risk, within the strategic risk category. The risk was
defined as: “This risk covers (1) Transition Risks and (2)
Physical Risks. Climate risk is a cross-cutting risk type
that may manifest through some of our other established
principal categories (regulatory, credit, operational,
technology and funding).” The inherent likelihood was
assessed as “Possible” (meaning a potential occurrence
once every one to two years) and the inherent impact
was deemed to be “Minor” based on an assessment of
qualitative and quantitative factors as described above.
The resulting inherent risk rating was “Low”. Consistent
with 2023, the likelihood and impact of this risk on other
principal categories over the ERMF time horizon was
assessed as de minimis.
Management and integration of climate-related risks
Funding Circle’s risk appetite statement in relation to strategic
risks including climate risk is that it “will make efficient use
of its available resources to build a sustainable, diversified
and profitable business that can successfully adapt to
environment changes”. In line with the assessed “Low” impact
materiality, we continue to take a proportionate approach to
building our climate risk management capabilities.
The main controls in place to manage climate-related
risks include internal legal and regulatory review;
management and risk oversight and controls; third party
review; internal audit review; and internal policies and
practices. The financed emissions data and physical
and transition heatmaps developed in 2024 provide
appropriate foundations to proportionately manage and
embed climate risk in the medium term.
The residual risk rating for climate risk in 2024,
considering the effectiveness of controls in place,
was “Low” and unchanged from last year. Through its
integration into the ERMF, climate-related risk is subject
to the same evaluation, response and monitoring process
and governance as all other key risks.
4. Metrics and targets
GHG emissions metrics
Methodology
This section includes our mandatory reporting of GHG
emissions in line with The Companies Act 2006 (Strategic
Report and Directors’ Report) Regulations 2013, and the
Streamlined Energy and Carbon Reporting (“SECR”) under
The Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations
2018. Our GHG emissions reporting period is 1 January
to 31 December and is aligned with our financial
reporting year.
We measure a full inventory of material Scope 1, 2 and 3
emissions in accordance with the GHG Protocol Corporate
Standard, using an operational control approach to define
our organisational boundary. Activity data was used where
available (Scopes 2, 3.5, 3.8, and 3.1 Cloud emissions), or
estimated on a spend basis. Emissions were calculated by
applying recognised and up-to-date emission factors from
reference databases (mainly Exiobase 3.8.2, IEA 2023, UK
GHG Conversion Factor 2024, and Base Empreinte Ademe
23.4) selected based on geographical relevance and
data quality.
We carry out annual independent third party verification of
our GHG emissions in accordance with ISO 14064-1, which
was completed for FY 2023 at a limited level of assurance
at a materiality of 5%, and covering all activities under our
operational control, and all relevant emission categories,
indicating any exclusions. Verification for FY 2024 is
due in 2025.
Beyond reporting requirements, we measure and report
all material GHG categories as a way of monitoring the
transition risks outlined in Table 3, with higher emissions
being indicative of elevated transition risk.
Comparative periods
Funding Circle completed the sale of its US business on
1 July 2024. In line with the GHG Protocol for treatment
of structural business changes, emissions from our US
business have been removed, where possible, from our
core 2024 reported figures and comparative periods.
Work undertaken in 2024 in relation to Funding Circle’s
transition plan highlighted an inaccurate classification of
the London office heating emissions. Funding Circle has
no control over the hours of operation or the equipment
used for heating this building, which is leased by
Funding Circle and shared with other tenants. It was
therefore deemed more accurate to reclassify these
emissions from Scope 1 to Scope 3 category 8 for this
reporting year and all comparative periods.
Financed emissions methodology
Scope 3 category 15 emissions (financed emissions) were
calculated in accordance with the Partnership for Carbon
Accounting Financials (“PCAF”) Global GHG Accounting
and Reporting Standard (the “PCAF Standard”)
methodology for business loans. As we have no primary
emissions data for our SME customers, we have applied
PCAF’s “economic activity-based emissions” method,
which provides sector-based factors for the volume
of emissions per £ revenue (based on Exiobase v3.9,
base year 2019). We then attribute a proportion of an
SME’s emissions based on the ratio between the amount
outstanding originated through the Funding Circle
platform and the total debt and equity of the SME.
As Funding Circle holds only a small proportion of credit
extended on its own balance sheet (c.6% of balances
under management when including defaulted loans), the
majority of attributed emissions form part of the carbon
footprint of the institutional investors who fund the
lending originated through the platform. For transparency,
we report on both Funding Circle’s financed emissions
(relating to the small number of on-balance-sheet loans)
and the overall emissions attributed to the total balances
under management.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202434
This calculation includes several assumptions which can
materially affect the final calculated emissions. This means
we can provide no assurance as to the accuracy of the
final calculated emissions. Our exposure-weighted data
quality score, based on the PCAF Standard, was 4.01
where 1 is the highest data quality and 5 is the lowest.
This is in line with the previous year’s score, however, an
updated PCAF methodology was used for the emissions
factors meaning results are not comparable with 2023.
As recommended by PCAF we used regional (sector
average) emission factors, instead of country-level ones
for 2023, with the former being generally higher. Had we
taken the same approach as reported for 2023, financed
emissions would have been 22% lower (2,190,709 tCO
2
e)
for all balances under management, and 21% lower
(156,693 tCO
2
e) for balances on balance sheet.
We have not recalculated our 2023 financed emissions
using the updated methodology as we anticipate further
fluctuations until data quality and methodologies improve
and stabilise. Such significant, methodology-related
fluctuations make the development of actions or targets
for financed emissions impractical at present. And while
we have identified potential ways to improve the data
quality score over time, a key limitation is our ability to
source primary emissions data for SMEs, the majority
of which do not measure or disclose this information
at present.
Actions taken to reduce emissions
Total emissions, excluding 3.15 financed emissions, were
reduced by 35% in 2024 (both market and location based)
in part due to the sale of our US business in mid-2024. If
we exclude US-related emissions, where possible, from
2023, the 2024 reduction was 32%; however, we were
unable to disaggregate the US in some categories of
emissions (3.1 and 3.6) and will more fully understand the
impact in 2025 when we report our first full year of UK-
only emissions. Our FTE intensity ratio (Scopes 1, 2 and 3
excluding 3.15) was reduced by 11% (27% when excluding
US-related emissions where possible).
One of the key impacts of the sale is a real-world
reduction in business travel emissions (down 62%),
removing the need for flights between the UK and
US from the second half of 2024, with full annualised
benefits expected in 2025. Our travel policy restricts
flights to essential cases, supported by flexible working
policies, ensuring all feasible steps have now been taken
to limit travel emissions.
We also consolidated our London head office from
two floors to one and completed a re-fit in the process
which included an LED lighting upgrade. These actions
reduced electricity use and, therefore, Scope 2 UK
emissions (down 31% in 2024 vs. 2023). Following the
sale of our US business and the corrected classification
of our London head office heating emissions, our Scope
1 and 2 emissions have now been reduced to zero on a
market basis. Emissions from gas heating of this office
are now reflected in Scope 3 category 8 due to our lack
of operational control. Future reductions depend on
whether and when UK policy abolishes gas boilers in
commercial properties.
We do not fully understand the drivers of the increase in
our Scope 3 waste emissions in 2024, which are estimated
pro rata from building-level data. There was a change in
waste management provider and we saw higher building
occupancy in 2024; however, we need to interrogate the
changes further. The recycling rate was 75% and we are
planning further employee and building management
engagement in 2025.
Key remaining Scope 3 categories – purchased goods and
services, employee commuting (including homeworking),
upstream leased assets and financed emissions – pose
challenges due to limited influence and reliance on
secondary data. Employee commuting emissions reduced
by 36% in the year (even after adjusting for the sale of
the US business); however, we need to better understand
the reasons for this. Purchased goods and services
emissions saw a 38% decrease year-on-year; however,
we were unable to disaggregate country-level data and
so are unsure how much of the decrease is driven by the
divestment of our US business. Capital goods emissions
were an exceptional item included this year due to our
office re-fit.
Excluding divested loans relating to the US business,
Scope 3.15 financed emissions increased by 24% for
balances under management, or 50% for balances on
balance sheet. This reflects the move to an updated
PCAF methodology described in the previous section.
Underlying balances excluding the US business were
broadly flat, and the type of lending and customer base
remained consistent with prior years.
We switched carbon accounting solutions during 2024,
and although we do not believe this has any major
impact on measured emission results, it may account
for minor fluctuations relative to 2023. In 2025, we will
focus on improving data accuracy and identifying which
decarbonisation opportunities we might influence to
inform our evolving transition plan, including modelling
potential reduction levers, and investigating top supplier-
level emissions data. However, we expect there to
be a material dependency on government policy and
societal behaviours.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 35
Environment, social and governance (“ESG”) continued
Climate and environment continued
4. Metrics and targets continued
Funding Circle Holdings plc global GHG emissions
Global GHG emissions data for period
1 January to 31 December
2024
1
tCO
2
e
2023
(comparative)
2
tCO
2
e
2023
tCO
2
e
2022
tCO
2
e
2021
tCO
2
e
Scope 1
3
— — 108 77 129
Scope 2
4
– location based 51 75 265 313 340
– market based — — 190 239 411
Total gross emissions (Scope 1 and 2) – location based 51 75 373 390 469
– market based — — 298 316 540
Scope 3 – category 1 purchased goods and services 5,718 9,217 9,217 n/a n/a
Scope 3 – category 2 capital goods
5
766 — — — —
Scope 3 – category 3 fuel and energy activity 15 54 103 n/a n/a
Scope 3 – category 5 waste generated in operations 29 10 15 6 3
Scope 3 – category 6 business travel 279 740 740 563 113
Scope 3 – category 7 employee commuting 230 358 568 n/a n/a
Scope 3 – category 8 upstream leased assets
3
110 108 8 n/a n/a
Total Scope 3 supply chain gross emissions 7,147 10,487 10,651 569 116
Total gross emissions (Scope 1, 2
and 3 excl. 3.15)
6
– location based
7,198 10,562 11,024 959 585
– market based 7,147 10,487 10,949
6
885 656
Scope 3 – category 15 investments: financed emissions –
balances under management
7
2,798,767
2,250,205 2,886,452 n/a n/a
Scope 3 – category 15 investments: financed emissions –
balances on balance sheet
197,783 132,105 220,357 n/a n/a
– 3.15 – balances on balance sheet: Scope 1 and 2 (tCO
2
e) 54,419 n/a 71,143 n/a n/a
– 3.15 – balances on balance sheet: Scope 3 (tCO
2
e) 143,364 n/a 149,214 n/a n/a
Total gross emissions (Scope 1, 2
and 3 incl. 3.15) – location based
204,981 142,667 231,381 n/a n/a
– market based 204,930 142,592 231,306 n/a n/a
Full-time employee (“FTE”) (average over the applicable
reporting period)
8
788 845 1,074 1,035 929
Total income (£m)
8
161.7 129.7 162.2 151.0 206.9
Intensity ratio (Scope 1 and 2): tCO
2
e/FTE – location based 0.06 0.09 0.35 0.38 0.5
– market based — — 0.28 0.31 0.58
Intensity ratio (Scope 1 and 2): tCO
2
e/£m – location based 0.32 0.57 2.30 2.58 2.27
– market based — — 1.84 2.09 2.61
Intensity ratio (Scope 1, 2 and 3 excl. 3.15):
tCO
2
e/FTE – location based
9.13 12.50 10.26 0.93 0.63
– market based 9.07 12.41 10.19 0.86 0.71
Intensity ratio (Scope 1, 2 and 3 excl. 3.15):
tCO
2
e/£m – location based
44.51 81.43 67.97 6.35 2.83
– market based 44.20 80.86 67.50 5.86 3.17
1. All figures presented for 2024 have not yet been subject to external assurance or verification. 2024 data reflects emissions from ongoing operations following
the sale of our US operations in July 2024 (except for 3.1 and 3.6 where it was not possible to disaggregate the data, and which include US data up to July).
2. We provide here 2023 emissions excluding US emissions to enable better comparison with 2024 (except for 3.1 and 3.6 where it has not been practicable to fully
disaggregate US and UK data).
3. Scope 1 emissions from gas heating of the UK leased office are now reflected in Scope 3 category 8 due to our lack of operational control.
4. Scope 2 includes purchased electricity (and steam for US offices where applicable); as per the GHG Protocol Corporate Standard, we also apply the market
based method for Scope 2 RECs.
5. Category 3.2 capital goods emissions were an exceptional item included this year due to our office re-fit.
6. In our Annual Report 2023, Categories 3.3, 3.7 and 3.8 were reported as market-based; as per the GHG Protocol we now report all Scope 3 as location-based.
7. For Category 3.15 investments, for transparency we report on financed emissions for Funding Circle’s on-balance-sheet balances, as well as for total balances
under management, and we include defaulted loans. In addition, we follow PCAF’s guidance to report Scope 1 and 2 financed emissions separately from Scope
3 (to ensure transparency while acknowledging potential double counting issues). The move to an updated PCAF methodology means the results are not
comparable for 2024 and 2023.
8. FTE and total income for 2024 are reported for continuing operations only.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202436
Regional breakdown of energy consumption data for period 1 January to 31 December
(Kilowatt-hour equivalent – kWhe) Scope 1 Scope 2
2024 2023 2022 2021 2024 2023 2022 2021
Region
1
UK —
2
593,164 457,208 554,366 262,420 359,778 402,758 359,638
US — — — 79,469 n/a 385,700 545,219 643,284
Total — 593,164 457,208 633,835 262,420 745,478 947,977 1,002,922
1. In prior years we disclosed emissions from our legacy European operations in Germany and the Netherlands, no longer relevant for FY 2024 onwards.
2. Scope 1 emissions from gas heating of the UK leased office are now reflected in Scope 3 category 8 due to our lack of operational control, however for
transparency we can report that natural consumption for heating our UK office was estimated at 618,122 kWh for 2024.
Climate-related risk metrics
With support from third party experts in 2024, Funding Circle established portfolio-level physical and transition
risk metrics as summarised in the tables below. We monitor these metrics at a portfolio level annually to inform our
assessment of physical and transition risks outlined in “Climate-related risks and opportunities” on pages 28 to 30.
Table 6.1: Sectoral transition risk level
As at 31 December 2024 Low Medium High
Proportion of balances under management 65.4% 29.2% 5.4%
Proportion of balances on balance sheet 65.2% 28.9% 5.9%
note: This analysis for 2024 was based on a previous sectoral definition (SIC codes were adopted during 2024 for the purpose of climate risk analysis) meaning the
figures do not reconcile exactly to the sectoral splits provided in Tables 2 and 4.
Table 6.2: Physical risk exposure by hazard (proportion of balances under management)
As at 31 December 2024 Heat waves
Low
temperatures
and snow
Fluvial
flooding
Surface
water
flooding
Coastal
flooding* Drought
Storm
events Wildfire
Very low 65.5% 54.2% — — — 88.7% — —
Low 34.5% 28.6% 18.1% 86.2% 5.2% 11.3% — —
Medium — 16.3% 61.6% 13.6% 9.9% 0.0% 99.1% 66.1%
High — 0.9% 20.0% 0.2% 69.9% 0.0% 0.9% 33.4%
Very high — — 0.3% — 0.5% — — 0.5%
* Coastal flooding is not applicable for the Midlands.
Funding Circle established the CRMF in 2024 which underpins its ongoing processes to identify and assess climate-
related risks based on the metrics above. The framework sets safeguard levels to maintain geographical and sectoral
distribution of the lending portfolio broadly in line with the UK economy. It also sets risk appetite thresholds for physical
and transition risks based on the proportion of balances outstanding with high exposure to physical risks or to carbon
intensive sectors
5
.
Currently, “Low temperatures and snow” is the only “high exposure” physical risk subject to CRMF threshold targets
described in the following section; however, we continue to monitor the UK National Risk Register for any changes.
Carbon intensive sectors are a sub-group (Agriculture, Electricity & Utilities, and Mining & Quarrying) of the sectors
exposed to High transition risk and total 1% of loans outstanding as shown in Table 2.
5. For this purpose, Funding Circle defines high exposure to physical risks as a likelihood of ≥5% and an impact of “significant” or worse based on the UK National
Risk Register, and it defines carbon intensive sectors as Agriculture, Electricity & Utilities, and Mining and Quarrying.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 37
Environment, social and governance (“ESG”) continued
Climate and environment continued
4. Metrics and targets continued
Targets
In 2024, Funding Circle updated its ESG framework to reflect a more granular assessment of the real-world actions
required to achieve net zero. The framework now sets out the following short, medium and long-term targets related to
managing climate-related risks and opportunities:
Table 7: Summary of targets
Target Scopes Target date FY24 update Status Change from prior targets/commitments
Net zero All 2050
1
↓ 11% vs.
2023
2
Too
early to tell
No change
Interim (2025) partial net
zero (market based)
1, 2 and 3
business travel
2025 ↓
62% vs. 2023
On track Accelerated from prior stretch target to
reach net zero by 2030
Enhance data accuracy and
consider real-world actions –
including modelling potential
reduction levers, and
investigating top supplier-
level emissions data
3 – all categories
excluding
business travel
2025 — On track
Supplier, waste and employee commuting
emissions were previously included in our
2030 net zero stretch target which has been
retired recognising the need for outputs
relating to this new qualitative target before
further quantitative targets are considered
Maintain proportion of
balances outstanding
subject to high exposure to
physical risks within agreed
CRMF thresholds
3
n/a Annual <1% Within
internal
thresholds
New target (internal)
Maintain proportion of
balances outstanding
to carbon intensive
sectors within agreed
CRMF thresholds
4
3 – financed
emissions
Annual 1% Within
internal
thresholds
New target (internal)
2030 net zero
stretch target for our
operational emissions
Scope 1, 2, 3 waste,
business travel,
supplier, employee
commuting
2030 (2021
baseline for Scope
1,2 and 3 waste and
business travel)
Retired Retired Target data for Scope 1, 2 and business
travel accelerated to 2025 but target
removed (pending further analysis) for
remaining scopes.
1. Funding Circle’s target is to reach net zero in line with the UK government’s target. This is currently 2050.
2. For total emissions including 3.15 financed emissions without adjusting for the sale of our US business. Excluding 3.15 (which increased due to a methodology
change in 2024) the reduction was 35%.
3. Physical risks rated in the National Risk Register with a likelihood ≥5% and impact of significant or higher which is currently “Low temperature and Snow” per
breakdown in Table 6.2.
4. Defined as a subset of “carbon-related” sectors: Agriculture, Electricity and Utilities, and Mining and Quarrying, per breakdown in Table 2.
Our new interim (2025) partial net zero target (market based) reflects our ambition to accelerate progress on
decarbonisation that’s within our control. This target does not contain the typical requirements for “science-alignment”
(a 90%+ reduction from a historic baseline) as our 2021 baseline was during the Covid-19 pandemic and reflects
significantly muted travel activity. However, we have achieved strong reductions in 2024 (-62% vs. 2023) and believe
that by the end of 2025 we will have taken all possible reasonable actions within our control to reduce absolute Scope
1, 2 and 3 business travel emissions, leaving only a small tail of hard-to-abate emissions beyond 2025, to be offset in
line with net zero principles. This is being done through: purchasing renewable electricity for our offices, reducing air
travel to absolute de minimis levels, and minimising business travel wherever practical.
We recognise that our most significant categories of emissions, being financed emissions and those relating to
purchased goods and services, are not currently subject to quantitative targets. As discussed in earlier sections, and
committed in our near-term qualitative target, we are focused on improving data quality and granularity to provide a
more accurate view of these emissions and will use this to help us understand what real-world actions are within our
control or influence before considering targets. We also plan to review the SBTi’s updated Corporate Net Zero and
Financial Institutions Net Zero Standards, which are expected in 2025, before committing to any further targets.
Carbon credits
For reporting periods 2020 to 2022, Funding Circle purchased and retired high quality carbon credits equivalent to the
annual emissions from our Scope 1, 2 and 3 waste and business travel
6
. In 2023 and 2024, we retired this approach
to BVCM in favour of expanding our investment in environmental projects (see page 31). From next year, we anticipate
offsetting our small remaining tail of hard-to-abate Scope 1, 2 and 3 business travel emissions with carbon credits
to achieve our interim (2025) partial net zero (market based) target. We intend to undertake further due diligence on
potential sources of carbon credits and refer to the SBTi’s updated Corporate Net-Zero Standard in 2025 to inform our
approach to offsetting and broader BVCM activities.
6. In previous reporting periods we referred to this as achieving carbon neutrality – terminology which we retired when SBTi guidance became available on BVCM.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202438
This section is produced in order to comply with the reporting requirements in sections 414CA and 414CB of the
Companies Act 2006 as amended by The Companies (Strategic Report) (Climate-related Financial Disclosure)
Regulations 2022, which places requirements on us to incorporate climate disclosures in our Annual Report. We have
provided the location of relevant disclosures by cross-reference. Specifically, requirements A-H of section 414CB are
covered on pages 28 to 38.
Reporting
requirement Policies and standards
Information necessary to understand
our business and its impacts Page reference
Environmental
matters
Funding Circle ESG Framework* ESG
Risk management
Principal risks and uncertainties
Board decision making and section
172(1) duties
Report of the ESG Committee
24 to 38
51 to 54
55 to 62
72 to 73
88 to 89
Our employees Funding Circle Code
of Conduct*
People at Funding Circle*
Whistleblowing Policy*
DEI Statement
Communication Handbook
Our people
ESG
Risk management
Principal risks and uncertainties
Corporate governance report
Report of the Audit and Risk Committee
Report of the ESG Committee
20 to 23
24 to 38
51 to 54
55 to 62
70 to 77
82 to 87
88 to 89
Social matters Funding Circle ESG Framework*
Customer Complaints*
ESG
Social impact
Engaging our stakeholders
Our customers
Risk management
Report of the Directors
24 to 38
26 to 27
40 to 43
14 to 15
51 to 54
112 to 114
Human rights Human Rights Statement*
External Assurance
Supplier Standard*
Supplier Code of Conduct*
Modern Slavery Statement*
ESG
Corporate governance report
Report of the ESG Committee
Risk management
Principal risks and uncertainties
24 to 38
70 to 77
88 to 89
51 to 54
55 to 62
Anti-corruption and
anti-bribery matters
Anti-Corruption and
Bribery Policy*
Risk management
Principal risks and uncertainties
51 to 54
55 to 62
Principal risks and
risk management
Enterprise Risk Management
Framework Policy
Risk management
Principal risks and uncertainties
Viability statement
Report of the Audit and Risk Committee
51 to 54
55 to 62
63 to 64
82 to 87
Description of business model Our business model
Our strategy
8 to 9
10 to 11
Non-financial KPIs Our business model
Engaging our stakeholders
8 to 9
40 to 43
* Relevant policies
can be found on
the Company’s
Sustainability
webpage
Non-financial and sustainability information statement
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 39
Borrowers
Engaging our stakeholders
We actively engage with
all our stakeholders
Our shared mission with borrowers, institutional investors, shareholders and our people is to ensure that a vital,
historically underserved part of our economy can access the funding it needs to win. We are committed to building
open and constructive relationships with all our stakeholders.
In 2024, we engaged with our stakeholders in a variety of ways to ensure they continued to feel connected and
supported at all times.
An expanded product set is enabling us to engage with
and serve more SMEs than ever before, whatever their
business needs.
How we engage
l Real-time monitoring of customer insight from every
stage of the customer journey, human responses to all
Google and Trustpilot reviews, and dedicated customer
support via social media.
l Regular surveys, focus groups, in-depth interviews
and in-person borrower visits across the UK by the
leadership and the broader team to shape our product
and user experience.
l Supporting borrowers by continuously updating our
Purple Pages directory, to encourage employees to
purchase products and services from small businesses.
l Sourcing borrower products such as chocolates, tea
and cakes as prizes and gifts for employees.
l Twice yearly brand monitoring to an SME panel to measure
sentiment, satisfaction and comparison against competitors.
l Regular email updates and communications, including
on the launch of our new products, changes to
government guaranteed schemes and continued
service improvements and resources for borrowers.
Outcomes of engagement
l We achieved a Group NPS of 79 (2023: 75).
l Our Trustpilot score remains at an “Excellent” 4.6 rating.
l We launched the Cashback credit card to help
customers earn from their business spending,
and added features to FlexiPay as a direct result
of customer feedback, including more flexible
payment terms, and credit transfers direct to their
bank accounts.
Engaging our stakeholders
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202440
Circlers
Our people are what make Funding Circle special. We are
committed to creating an environment where Circlers
thrive and share our mission, values and ambition.
How we engage
l Regular All Hands meetings and our biannual
Company- wide events, including the Full Circle and the
newly launched CircleIN. These provide an opportunity
to reinforce Funding Circle’s values and culture by
bringing everyone physically together as “one team”.
l Meetings between Helen Beck, our Workforce
Engagement Non-Executive Director, and employee
groups, with subsequent feedback loops to the Board.
l Six Circler-led groups (Women @ FC, Let’s Talk
About Heritage, Circle of Pride, FC Impact, Parents
@ FC and Neurodiversity @ FC) that empower our
people to deliver initiatives important to them and our
DEI agenda.
l Regular employee engagement surveys, with results
shared with the Board, along with reports and updates
on diversity and inclusion initiatives.
Outcomes of engagement
l Continued to embed our value, “Obsess over the
customer” by giving Circlers the opportunity
to visit Funding Circle borrowers to learn about
their businesses.
l Delivered an allyship training programme, to further
strengthen our education on diversity, equity and inclusion.
l Supported Circler resource groups in delivering over 50
initiatives and events.
l 2024 engagement results achieved an overall score
of 64.3% with 61% recommending Funding Circle as a
place to work.
Section 172(1) statement
The Directors recognise that they have a duty to
promote the success of the Company in accordance
with section 172(1) of the Companies Act 2006. Further
details on how the Board operates and the way in
which it reaches decisions, including the matters
discussed and debated during the year, are set out
in the Governance section on pages 66 to 115. Some
examples of how the Directors have had regard
to the factors set out in section 172(1) (a) (f) when
discharging their duties are on pages 72 and 73.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 41
Engaging our stakeholders continued
Institutional investors
Providing stable and attractive returns to a
diverse range of institutional investors is a central
part of our strategy.
How we engage
l We actively engage with all types of institutional
investors – for example asset managers, banks,
insurance companies and pension funds – to share
details of our products and services. This includes
a presence at key global conferences, investor
roadshows and bespoke meetings.
l We provide information and support to existing
institutional investors in a range of accessible
formats, including monthly and daily reporting
on their investments.
Outcomes of engagement
l We onboarded new, and re-signed a number of
existing, institutional investors, further diversifying our
funding investor base across our product suite/product
family offering.
l Continued institutional investor demand to fund loans
– with an active forward pipeline.
We maintain transparent and open engagement with
our shareholders. This enables the Board to clearly
communicate its strategy, provide updates on our
performance and receive regular feedback.
How we engage
l Regular shareholder communications such as full and
half-year results, and ad hoc regulatory news service
announcements.
l In early 2024 and 2025, we actively consulted with
top shareholders to get feedback on our proposed
Remuneration Policies prior to them being circulated
for approval at our 2024 and 2025 Annual General
Meetings (“AGMs”).
l Held analyst and investor meetings and presentations/
roadshows, as well as ad hoc meetings and events
with shareholders and prospective shareholders.
l The 2024 AGM was once again open to shareholders,
offering an in-person opportunity for shareholders to
interact with the Board.
l The Chair, Chief Executive Officer and Chief Financial
Officer regularly communicate with shareholders and
analysts as required and provide regular reports to the
Board on shareholder interactions.
Outcomes of engagement
l Took into account views of major shareholders through
the year when shaping Company strategy and other
key developments, including our new Remuneration
Policies in 2024 and 2025, as well as announcing two
share buybacks and a capital reduction.
Shareholders
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202442
Communities
Government and regulators
The SMEs we serve are at the centre of our
communities. We are passionate advocates of
community engagement and charitable causes that
deliver social impact.
How we engage
l Continuous evolution and implementation of our ESG
strategy, including our priorities for engagement with
our various stakeholders.
l Regular touch points with institutional investors,
including discussions regarding their ESG investment
criteria as they apply to fund Funding Circle’s business
finance products.
l Sustained approach to corporate partnerships to
drive social and sustainability outcomes for SMEs and
communities, including through employee engagement.
l Employee-led volunteering and charity initiatives led by
Circler group FC Impact.
Outcomes of engagement
l Progressed our ESG strategy, which sets out a formal
framework for operating as a responsible business and
is overseen by our ESG Committee.
l Extended our partnership with Thrive Mental Wellbeing,
an app trusted by the NHS, to help all UK small
business leaders and employees get more support
with their mental health.
l Continued to support charities delivering social and
environmental value, such as Earthwatch’s citizen
science campaigns, and Hatch Enterprise, which
empowers underrepresented entrepreneurs to launch
and grow their businesses, along with Funding Circle
volunteers providing mentoring.
l Raised £12,828 for UK charities during 2024 and
Circlers contributed 171 volunteering “Impact Days”
in support of a range of good causes, including our
charity of the year, Refuge.
Our goal is for Funding Circle to always be known as
a trusted and reputable company, and to work with
regulators and industry to ensure best practice.
How we engage
l Engagement with local, national and supra-national
government agencies, including regulators, legislators,
policymakers and industry groups. These interactions
provide insight and leadership on policy and rule
making related to issues affecting SME borrowers,
institutional investors or lending in the fintech industry.
l Contribution to the discourse and debate on industry
issues, including submitting position papers and
participating in expert hearings, consultations, forums
and other policy engagement initiatives.
l The Board ensures it uses the results of the above
engagement, as well as key legal and regulatory
changes affecting the business, to inform its strategy
and decision making.
Outcomes of engagement
l Continued to work with the British Business Bank
(“BBB”) as we started participating in the GGS, the
successor to the UK government’s Recovery Loan
Scheme; engaged with industry groups on issues
such as levelling the playing field for fintech lenders
and reviving the UK small and mid-cap market; and
responded to the Treasury Committee’s enquiry into the
accessibility of finance and lending to SMEs, including
giving oral evidence.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 43
Financial review
Overview of the year ended 31 December 2024
We were pleased with the strong operational and
strategic performance in 2024. We saw significant
growth in both of our businesses and improved Group
profitability compared to 2023. The Group comprises
two continuing Business Units which are at different
stages of maturity: Term Loans (a longer-term financial
product offering) and FlexiPay (a shorter-term working
capital product).
In H2 2024 we launched a Cashback credit card
product. Given its recent launch, its contribution is
relatively minimal. We have therefore included its results,
transactions and balances in the FlexiPay segment.
The US business was sold on 1 July 2024 and is therefore
treated as discontinued in the year.
Originations and
transactions
Balances under
management
FY 2024
£m
FY 2023
£m
31
December
2024
£m
31
December
2023
£m
Continuing
operations
UK Term Loans 1,407 1,060 2,714 2,853
Other — — n/a 11
FlexiPay 492 234 119 58
Total 1,899 1,294 2,833 2,922
Term Loans
Term Loans originations increased by 33% to £1,407 million
(2023: £1,060 million). Growth was driven by increased
applications, product innovation and enhancements. We
participated in the third iteration of the Recovery Loan
Scheme (“RLS”) (H2 2023 to H1 2024) and the longer-term
government guarantee programme, the Growth Guarantee
Scheme (“GGS”) (from H2 2024). These schemes have
enabled us to provide finance to SMEs in parts of the
market we would not have reached otherwise.
Strong performance
and delivery against
strategic objectives
“ We were pleased with the
strong operational and
strategic performance in
2024. We saw significant
growth in both of
our businesses and
improved profitability
compared to 2023.”
Tony Nicol
Chief Financial Officer
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202444
Term loan originations were funded in a platform model
through forward flow agreements with institutional
investors. As the loans are owned by these institutional
investors, the Loans under Management (“LuM”) do not
form part of Funding Circle’s balance sheet.
We have also continued to grow originations through our
Marketplace network of third party finance providers,
where we refer SMEs if we are unable to lend to them
directly, earning a commission. This allows us to support
an even greater number of SMEs access to a wide range
of financing options.
Despite strong originations in the year, LuM decreased
in 2024 as the amortisation of the legacy Covid-19
government-guaranteed loans outpaced growth in new
lending. As at 31 December 2024, the legacy Covid-19
loans represented £743 million (31 December 2023:
£1,457 million), c.27% of total LuM. We expect Term Loan
LuM to grow in 2025.
As at 31 December 2024, we have c.£2.1 billion of forward
funding in place for future originations.
FlexiPay and Cashback credit card
Our line of credit product, FlexiPay, has demonstrated
significant growth to date and we continue to invest in it.
We successfully launched our Cashback credit card in H2
2024 with a good uptake from our customers.
Transactions more than doubled since FY 2023, reaching
£492 million (2023: £234 million), demonstrating
strong customer engagement. Drawn lines of credit
(“balances”) grew to £119 million at 31 December 2024
(2023: £58 million), in line with transaction growth.
FlexiPay and the Cashback credit card are funded by
Funding Circle capital and a senior debt facility. The lines
of credit are part of Funding Circle’s balance sheet.
Finance review
Overview
Revenue from continuing operations was £160.1 million
(2023: £130.1 million), a 23% increase. Revenue consists
of total income, fair value movements on SME loans held
for sale and investments in trusts. It is net of cost of funds
on the senior debt facility for FlexiPay.
The Group made a profit before tax (before exceptional
items) from continuing operations of £3.4 million (2023:
loss of £9.9 million). The exceptional items of £2.6 million
related to restructuring undertaken in the UK, mainly
comprising redundancy costs. After exceptional items,
the profit before tax from continuing operations was
£0.8 million (2023: loss of £9.9 million).
Segmental highlights
31 December 2024
1
31 December 2023
1
Continuing operations Continuing operations
United Kingdom United Kingdom Other Total
Term
Loans
£m
FlexiPay
£m
Total
£m
Term
Loans
£m
FlexiPay
£m
Term
Loans
£m
Total
£m
Transaction fees 84.7 0.6 85.3 65.2 0.1 — 65.3
Servicing fees 37.5 — 37.5 38.8 — 0.2 39.0
Interest income 8.3 22.6 30.9 7.5 7.8 0.1 15.4
Other fees 5.1 0.1 5.2 6.3 — 0.1 6.4
Operating income 135.6 23.3 158.9 117.8 7.9 0.4 126.1
Net investment income 2.8 — 2.8 3.6 — — 3.6
Total income 138.4 23.3 161.7 121.4 7.9 0.4 129.7
Fair value gains 4.2 — 4.2 3.1 — — 3.1
Cost of funds — (5.8) (5.8) — (2.7) — (2.7)
Net income (“revenue”) 142.6 17.5 160.1 124.5 5.2 0.4 130.1
Adjusted EBITDA 37.0 (12.5) 24.5 21.3 (14.4) (0.2) 6.7
Discount unwind on lease liabilities (0.6) — (0.6) (0.2) — — (0.2)
Depreciation, amortisation, impairment and modification
gains/(losses) (11.4) (1.8) (13.2) (11.3) (1.3) — (12.6)
Share-based payments and social security costs (6.5) (1.3) (7.8) (3.3) (0.5) — (3.8)
Exceptional items (2.3) (0.3) (2.6) — — — —
Foreign exchange gains 0.5 — 0.5 — — — —
Profit/(loss) before tax 16.7 (15.9) 0.8 6.5 (16.2) (0.2) (9.9)
1. In the year to 31 December 2024, “Other” Term Loans are presented within the UK business segment on the basis that the legacy European operations included
within Other are immaterial. The comparative period has not been re-presented. The segmental results of the US business are not presented above.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 45
Financial review continued
Term Loans business
The Term Loans business delivered revenue of
£142.6 million growing 15% on FY 2023. This growth
came principally from the growth in originations and the
corresponding transaction fees. Servicing fees reduced
in the year, reflecting the reduction in LuM.
The start of 2024 saw heightened demand from borrowers
which normalised in the second quarter. We did experience
more subdued demand over the summer months when
businesses were awaiting the new government’s October
Budget, and we then saw demand pick up in the final quarter.
Term Loans generated AEBITDA of £37.0 million in 2024
compared to £21.3 million in the prior year, with AEBITDA
margin improvement. This demonstrated the strong
operational leverage we are achieving from the more
mature business, where costs above AEBITDA increased
by 2.3%, following cost actions while revenue grew by 15%.
Profit before tax and exceptional items was £19.0 million,
up from £6.5 million in FY 2023, primarily due to the
growth in AEBITDA. After exceptional items, profit before
tax was £16.7 million, compared with £6.5 million in 2023.
FlexiPay and Cashback credit card
Revenue for FlexiPay was £17.5 million in 2024, increasing
from £5.2 million in 2023 as a result of a rise in the
number of transactions and fee growth.
When the product was initially launched customers were
able to draw and repay within a 3-month period. In H1
2024 we expanded repayment options to include 1, 3, 6, 9
and 12 months, with fees varying depending on payback
period. As a result, the average fee for each drawdown
grew to 5.8% (2023: 4.6%), reflecting a longer average
repayment period of 4 months.
A Cashback credit card was launched in H2 2024. When
customers transact using cards, we earn an interchange
fee of 1.75% alongside interest on any revolving balances.
The revenues earned from the Cashback credit card in
2024 were relatively minimal.
FlexiPay is funded through Funding Circle invested capital
and a senior debt facility with Citibank (it was solely funded
by Funding Circle until June 2023). The interest payable on
this facility is shown in “cost of funds” and is based on SONIA
plus a margin. This facility is for £150 million with the ability to
upsize further and is due for renewal in August 2025.
The AEBITDA result was negative £12.5 million (2023:
negative £14.4 million), with continued investment to
support product momentum. The principal costs incurred
include staff-related expenses, marketing costs and
expected credit losses which are required to be recognised
upfront for both drawn and undrawn lines of credit.
As the business continues to grow, we anticipate ongoing
investment with a resultant increase in the cost base,
principally marketing and expected credit losses. Once
onboarded, we earn repeat revenues as the customer
uses the product.
US Term Loans business
As was previously announced, the Group signed an
agreement in June 2024 to sell the US business to iBusiness
Funding, LLC. The sale was completed on 1 July 2024,
at which point the US business was deconsolidated. The
operations of the US business are presented in a single line
as discontinued operations within the financial statements.
The Group recognised a gain on sale of £9.8 million
(excluding foreign exchange reserve recycling through
the profit and loss). Further details can be found in the
financial statements in note 3.
How we make money from different products
Revenue stream Term Loans FlexiPay
Cashback
credit card 2024 Typical yield % 2024 Driver
c.6%
Originations
c.1.5%
LuM
c.5.8%
Transactions
1.75%
Transactions
Variable
Cash balances
and base rates
Variable
Invested capital
Transaction fees
Servicing fees
1
Drawdown fees
Interchange fees
Bank interest
Investment income
FeesOther
1. Servicing fees include other fees.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202446
Profit and loss
Before
exceptional
items
£m
Exceptional
items
£m
31 December
2024
Total
£m
31 December
2023
(re-presented)
1
£m
Transaction fees 85.3 — 85.3 65.3
Servicing fees 37.5 — 37.5 39.0
Interest income 30.9 — 30.9 15.4
Other fees 5.2 — 5.2 6.4
Operating income 158.9 — 158.9 126.1
Net investment income 2.8 — 2.8 3.6
Total income 161.7 — 161.7 129.7
Fair value gains 4.2 — 4.2 3.1
Cost of funds (5.8) — (5.8) (2.7)
Net income (“revenue”) 160.1 — 160.1 130.1
People costs (68.1) (2.3) (70.4) (65.5)
Marketing costs (45.6) — (45.6) (37.1)
Depreciation, amortisation and impairment (13.2) (0.3) (13.5) (12.6)
Expected credit loss charge (8.6) — (8.6) (4.5)
Other costs (21.2) — (21.2) (20.3)
Operating expenses (156.7) (2.6) (159.3) (140.0)
Profit/(loss) before tax from continuing operations 3.4 (2.6) 0.8 (9.9)
1. The comparative consolidated statement of comprehensive income has been re-presented to reflect the results of the US business as a discontinued operation.
Operating income includes transaction fees, servicing
fees, interest income from loans held at amortised
cost, interest on cash balances and other fees and
was £158.9 million (2023: £126.1 million).
l Transaction fees, representing fees earned
on originations, increased to £85.3 million
(2023: £65.3 million), driven by growth in originations as
the business continued to expand its Term Loan offering
to more segments of the market, and attract more
applications from SMEs. Average transaction fee yields
decreased in the Term Loans business to 6.0% (2023:
6.2%) due to the mix in government-guaranteed/non-
government lending.
l Servicing fees, representing income for servicing LuM,
were £37.5 million (2023: £39.0 million). The fees move
in line with the quantum of LuM, which decreased in the
Term Loans business as growth in LuM from new lending
was offset by continued repayment on the legacy Covid-19
scheme loans outpacing the impact of new originations.
l Servicing fees are not charged on FlexiPay lines of
credit. Servicing yields remain similar to 2023 levels.
l Interest income represents: i) The fees earned on
FlexiPay lines of credit and interest earned on cash
and cash equivalents. FlexiPay interest income is a fee
charged on transactions and spread over a number
of months, in line with borrower repayments. It has
increased to £21.3 million (2023: £7.6 million), driven by
transaction levels and the average fees on transactions
which were 5.8% in the year (2023: 4.6%).
ii) Interest earned on cash and cash equivalents
increased to £9.2 million (2023: £7.4 million) in line
with higher average base rates. This interest applies
to the Group’s unrestricted cash as well as restricted
cash drawn from the Citi facility in anticipation of
future drawdowns.
l Other fees arose principally from collection fees we
recovered on defaulted loans.
Net investment income represents the investment
income, less investment expense, on loans held on
balance sheet at fair value. It declined to £2.8 million
(2023: £3.6 million), driven by the continued amortisation
of the remaining loans on balance sheet.
Net income (“revenue”), defined as total income after
fair value adjustments and cost of funds, was £160.1
million (2023: £130.1 million). The fair value gain in the
year of £4.2 million (2023: £3.1 million) related primarily
to certain investment in trusts and co-investments, which
were sold earlier than originally anticipated thereby
accelerating the receipt of future cash flows, which were
valued at a discount. As the on-balance sheet loans
continue to amortise, we would expect fair value gains/
losses to decline in future.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 47
Financial review continued
Operating expenses: At an overall level, operating
expenses increased compared with 2023. However, costs
remain actively and tightly managed with a 12% increase
in expenses before exceptional items compared to a 23%
growth in revenue.
The primary drivers of cost growth were the variable
expenses associated with marketing and expected credit
losses. Marketing costs increased by 23% to £45.6 million
and expected credit losses increased to £8.6 million from
£4.5 million, primarily due to growth in FlexiPay balances.
For the remaining costs, share based payments grew by
£4.0 million, driven by the growth in share price which
impacts employers’ national insurance costs. Excluding
this, the costs remained flat year on year with salary
expenses decreasing following the restructuring.
Exceptional items – restructuring: As part of its ongoing
commitment to profitability, the Group launched a cost
efficiency programme during the year. These actions are
on track to deliver an annualised run rate cash saving of
~£15 million in 2025 and an actual reduction in the overall
number of roles by c.120. This resulted in redundancy
costs of £2.3 million and impairment of capitalised
development spend intangible assets of £0.3 million
which were treated as exceptional items.
People costs (including contractors) represent the
Group’s largest ongoing operating cost and include
salary-related costs plus share-based payments.
Salary-related costs reduced by 2% in the year with
the savings achieved from the restructuring more than
offsetting inflation, new hires and the absorption of
global costs previously allocated to the US business.
The average salary per head increased by 5%.
The share-based payment charge for the year, included
in people costs, was £7.8 million (2023: £3.8 million),
largely driven by a higher share price which increases
the national insurance costs associated with the awards.
Following the UK Government’s Budget in October 2024,
we expect that the Group’s employer’s national insurance
will increase by c.£2 million.
Continuing operations
31 December
2024
£m
31 December
2023
£m
Change
%
Salary costs 69.3 70.9 (2)
Less capitalised development spend (“CDS”) (9.0) (9.2) (2)
Salary costs net of CDS 60.3 61.7 (2)
Share-based payments 7.8 3.8 105
Total people costs 68.1 65.5 4
Average headcount (incl. contractors) 788 845 (7)
Year-end headcount (incl. contractors) 726 857 (15)
Marketing costs comprise performance marketing (direct
mail and online), brand spend and commission payments
made to brokers. Marketing costs increased in the year to
£45.6 million (2023: £37.1 million).
Depreciation, amortisation and impairment costs
of £13.5 million (2023: £12.6 million) largely represent
the amortisation of the cost of the Group’s capitalised
technology development and the depreciation of right-
of-use assets related to the Group’s office lease. Included
within this charge is £0.3 million exceptional impairment
of intangible assets related to projects used for activities
deprioritised as a result of our go forward focus.
Expected credit losses principally relate to the IFRS
9 charge for FlexiPay where we account for actual and
future expected credit losses from SMEs defaulting on
their lines of credit. We would expect this charge to
increase as FlexiPay and Cashback credit card grow.
Other operating costs, which consist of loan processing
costs, data and technology, professional fees and staff
and office-related costs, have grown as the Group
continued to invest in growth in the FlexiPay business.
The increase is driven by inflation, higher volumes and
loan processing costs.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202448
Balance sheet and investments
The Group’s net equity was £217 million at 31 December 2024 (31 December 2023: £247 million). This reduction reflects the
share buyback by the Group.
The majority of the Group’s balance sheet is represented by cash and invested capital as shown below. The invested capital
is in certain SME loans, either directly or historically through investment vehicles, and in the FlexiPay lines of credit.
Operating business Investment business
Term Loans
business
£m
FlexiPay
£m
Legacy
securitisation,
warehouse
and other
loans at
fair value
£m
CBILS/
RLS/GGS/
commercial
co-investments
£m
Private
funds
£m
31 December
2024
Total
£m
31 December
2023
Total
£m
SME loans and lines
of credit 2.1 97.1 1.2 17.8 0.6 118.8 102.0
Cash and cash
equivalents
Unrestricted 150.2 0.3 — — — 150.5 169.6
Restricted — 32.1 — 5.0 — 37.1 51.8
Other assets — 6.3 — — — 6.3 2.7
Borrowings — (101.9) — — — (101.9) (56.9)
Cash and net
investments 152.3 33.9 1.2 22.8 0.6 210.8 269.2
Other assets 45.3 — — — — 45.3 47.1
Other liabilities (34.6) — — (5.0) — (39.6) (69.5)
Equity 163.0 33.9 1.2 17.8 0.6 216.5 246.8
The table below provides a summation of Funding Circle’s net invested capital in products and vehicles:
Investment in product/vehicles
31 December
2024
£m
31 December
2023
£m
1. Legacy securitisation, warehouse and other loans at fair value 1 19
2. CBILS/RLS/GGS/commercial co-investments
1
18 25
3. Private funds 1 2
Net invested 20 46
FlexiPay
1
34 18
Total net invested capital 54 64
1. These vehicles are bankruptcy remote, see note 29 of the financial statements for details.
Legacy loans at fair value – this relates to the legacy loans previously held in SPVs and warehouses and reduced
through the sale of the US business and ongoing amortisation.
CBILS/RLS/GGS/commercial co-investments – as part of our participation in the CBILS, RLS and GGS UK
government-guaranteed loan schemes, we were required to co-invest c.1% alongside institutional investors.
Private funds – there are a small amount of other loans, comprising seed investments in private funds held
as associates.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 49
Cash flow
At 31 December 2024, the Group’s cash position was
£187.6 million (31 December 2023: £221.4 million). Of this
balance £150.5 million (31 December 2023: £169.6 million)
is unrestricted in its use with £37.1 million (£51.8 million)
being restricted.
Restricted cash relates to cash held in the funding vehicle
of FlexiPay together with amounts owed to the British
Business Bank (“BBB”) for guarantee fees collected
from institutional investors under the participation of the
CBILS, RLS and GGS schemes. Total cash movements
have principally been driven by:
i) trading performance;
ii) timing of working capital movements associated with
UK government loan guarantee payments received
from investors still to be paid to the BBB;
iii) monetisation of on-balance sheet SME loans as they
have continued to pay down;
iv) ongoing investment in FlexiPay lines of credit with
external bank debt; and
v) purchase of shares as part of the share
buyback programme.
Free cash flow, excluding the one-off guarantee fee
payment, has significantly improved year on year, and
is nearing positive, driven by the disposal of the loss-
making US business and the move to profitability of the
continuing UK Group.
Free cash flow, which is an alternative performance
measure, represents the net cash flows from operating
activities less the cost of purchasing intangible assets,
property, plant and equipment and lease payments. It
excludes the investment vehicle financing and funding
cash flows together with FlexiPay lines of credit and
Cashback credit card. The Directors view this as a key
liquidity measure and it is the net amount of cash used or
generated to operate and develop the Group’s platform
each year.
The table below shows how the Group’s cash has been utilised:
2024
£m
2023
£m
Adjusted EBITDA from continuing operations 24.5 6.7
Adjusted EBITDA from discontinued operations (8.7) (10.6)
Adjusted EBITDA 15.8 (3.9)
Fair value adjustments (6.4) (8.7)
Purchase of tangible and intangible assets (11.9) (12.2)
Payment of lease liabilities (3.2) (6.0)
Working capital/other 4.5 2.9
Free cash flow (excl. restricted cash movement due to guarantee fee payment) (1.2) (27.9)
Cash movement due to guarantee fee payment (26.1) 23.0
Free cash flow (27.3) (4.9)
Net distributions from associates 0.9 1.2
Net movement in trusts and co-investments 10.5 4.8
Net movement in lines of credit (net of borrowings) (7.5) 15.8
Net movement in SME loans at amortised cost (net of borrowings) 2.2 (3.3)
Net movement in loans at fair value through profit and loss (net of bonds) 13.5 32.7
Share buyback/purchase of own shares (33.7) (1.8)
Net proceeds from sale of US business 7.5 —
Effect of foreign exchange 0.1 (0.8)
Movement in the year (33.8) 43.7
Cash and cash equivalents at the beginning of the year 221.4 177.7
Cash and cash equivalents at the end of the year 187.6 221.4
Share buybacks
During the year, the Group announced two share buybacks totalling up to £50 million. As at 31 December 2024,
33.5 million shares have been purchased for £33.7 million. The shares have been cancelled, reducing share
capital by c.9%.
Financial review continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202450
Risk management
Delivering superior
risk-adjusted returns
As we enter 2025, we are
optimistic about our future.
With the increasing reliance
of UK SMEs on non-bank
fintech lenders, we are well-
positioned to capitalise on
this trend.”
2024: A year of economic uncertainty and continued
SME resilience
2024 ended with greater uncertainty over the UK
economy than when it began and growth expectations
are now within the boundaries of a wider confidence
interval. Early hopes of easing inflation were tempered
by the new government’s October budget in the UK and
the US election, both of which sowed uncertainty and
dampened consumer and business confidence. While
acute inflationary pressures have largely subsided,
central banks remain cautious due to persistent risks
impacting the labour market, including potential trade
barriers and demographic challenges. The rapid
advancement of AI further complicates the economic
outlook, presenting both opportunities and challenges.
Despite these late-year headwinds, we successfully
navigated the higher-rate environment. Our credit
portfolios have performed well, demonstrating
the resilience of UK SMEs and the strength of our
underwriting. As we enter 2025, the full implementation
of Labour’s economic policies and the trajectory of US
trade policy will be pivotal in shaping the UK economic
landscape and influencing SME investment and financing
decisions. We remain vigilant, closely monitoring these
developments and positioning our products to capitalise
on emerging opportunities.
As always, we commend the adaptability of UK SMEs
and remain optimistic about their long-term prospects.
While short-term challenges persist, our focus on
superior service, product innovation and leveraging AI
will enable us to navigate these uncertain times and
emerge stronger.
A simpler Funding Circle helping more UK SMEs
2024 was a year of significant transformation for Funding
Circle. By streamlining our operations and focusing on
the UK market, we emerged as a more agile and resilient
organisation. Our strategic pivot was well-received by
stakeholders, and we consistently executed on our plans.
Belkacem Krimi
Chief Risk Officer
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 51
Risk management continued
A simpler Funding Circle helping more UK SMEs
continued
Our credit portfolios demonstrated resilience in the face
of a deteriorating market, showcasing the strength of
our underwriting and risk management practices. This
resilience, coupled with our commitment to innovation,
has enabled us to expand our product offerings to
cater to more SME needs, allowing them to borrow,
pay later, and spend with Funding Circle. By providing
broader access to finance for SMEs, we empower more
businesses with more financing solutions and we enable
economic growth.
We continue to strengthen our risk management
framework and continuously improve our underwriting
models with advanced data and risk analytics, using
the latest trends in decision science. To ensure the
security and integrity of our platform, we invest in risk
management, cybersecurity and fraud prevention.
These measures safeguard our customers and protect
their financial interests, reinforcing our position as a
trusted partner in the financial services industry. Our
commitment to ESG is unwavering, as we integrate ESG
factors into our risk management framework to build a
sustainable and responsible business.
Finally, I am very proud of our internal culture of risk
awareness. Circlers are empowered to identify and manage
risks, fostering a culture of risk awareness and accountability.
Looking Ahead
As we enter 2025, we are optimistic about our future.
With the increasing reliance of UK SMEs on non-bank
fintech lenders, we are well-positioned to capitalise on
this trend. Our goal is to accelerate our growth, double
down on our strengths and empower even more SMEs to
achieve their full potential.
While we anticipate ongoing market volatility, Funding
Circle is well-prepared to navigate these challenges.
Our strong financial position, operational efficiency and
experienced team provide us with a competitive edge. We
are confident in our ability to deliver sustainable growth
and create value for all stakeholders.
Risk culture
At Funding Circle, we recognise that fostering an open
and robust risk culture is integral to promoting ethical
behaviour and professional conduct. As part of our
ongoing commitment to upholding the Company’s values,
we actively promote this risk culture, encouraging Circlers
to consistently ‘Do the Right Thing’ in their interactions
with customers, colleagues, the environment, the
community and other stakeholders.
Board role
The Board is responsible for setting the strategy,
corporate objectives, and risk appetite. It has delegated
responsibility for reviewing the effectiveness of the
Group’s risk management framework to the ARC. On
the advice of the ARC, the Board approves the level of
risk acceptable under each principal risk category while
providing oversight to ensure an adequate framework for
reporting and managing those risks.
Chief Risk Officer (‘‘CRO’’) and the Risk function
Our CRO leads the Risk function, which is independent
of the business and has a direct reporting line to the
Board. He is responsible for developing, maintaining
and implementing the Enterprise Risk Management
Framework (ERMF). He is also responsible for providing
assurance to the Board that the principal risks are
appropriately managed and that Funding Circle operates
within risk appetite.
Risk management policies
We have established and implemented comprehensive
risk management policies that outline mandatory
requirements for mitigating the principal risks faced by
the organisation. These policies include clearly defined
risk limits and monitoring mechanisms to ensure ongoing
adherence. Our Risk and Compliance teams conduct
regular reviews of these policies and controls to assess
compliance and make adjustments as necessary to
address evolving business conditions.
Risk appetite
Our risk appetite is defined as the level of risk that we,
as a company, are prepared to accept whilst pursuing
our core business strategy, recognising a range of
possible outcomes as business plans are implemented.
Having set the risk appetite, the Board regularly reviews
the Company’s risk profile against it. The risk appetite
framework serves as a guideline for shaping business
strategies and determining the necessary level of control.
Furthermore, it establishes a foundation for ongoing
dialogue between management and the Board regarding
Funding Circle’s current and evolving risk profile, enabling
strategic and financial decisions to be made with greater
insight and confidence.
Risk governance
Funding Circle has a robust risk governance framework,
as outlined in the ERMF. The Board is ultimately
responsible for defining and approving the ERMF, with
delegations of authority granted to the Group Board, the
UK Board and relevant Principal Risk Committees.
Throughout 2024, we effectively managed our principal
risks through a Three Lines of Defence model, operating
in conjunction with our well-defined risk governance
structure. The ARC is supported by the Management
Risk Committee (MRC), comprised of members of the
Executive Committee.
Effective January 2025, we implemented a new risk
governance structure to enhance efficiency and focus on
core risk management activities. This revised structure
emphasises key areas such as Board risk appetite,
committee scorecards, and updates on material risk
incidents while minimising the administrative complexities
of the previous model.
Under this revised structure, our business will continue
to operate within the Three Lines of Defence model.
Executive management will retain full ownership and
responsibility for risk management, underscoring our
commitment to proactive and disciplined risk oversight.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202452
Management & Implementation Committees
Executive Governance Committee
Management Risk Committee (MRC)
The MRC provides an oversight in assessing all principal
and other emerging risks. It supports & challenges
risk mitigation and acceptance. It reviews risk reports,
monitors strategic risks, and ensures risk integration
in planning and budgeting. It also approves relevant
policies, drives ESG risk strategies, and monitors audit
and compliance findings for effective remediation.
Technology Risk Committee (TRC)
The focus of the TRC is to ensure effective governance
and controls are in place for the ongoing management
of risks that could impact the performance, stability,
information security and resilience of the technology
infrastructure and operations that support our key
business and compliance processes.
Term Loans Risk Committee (TLRC)
The TLRC facilitates and monitors the implementation
of effective risk management practices by the business
insofar as they relate to regulatory, reputational and
conduct risk, operational risk and credit risk for Term
Loan products, Marketplace and retail investor products.
FlexiPay Risk Committee (FRC)
The FRC facilitates and monitors the implementation
of effective risk management practices by the business
insofar as they relate to regulatory, reputational & conduct
risk, operational risk and credit risk for FlexiPay and
Cashback credit card products.
Risk governance structure
Board Governance Committees
Funding Circle Holdings plc Board
Funding Circle Holdings plc
Audit and Risk Committee
Funding Circle Holdings plc
Market Disclosure Committee
Management Risk Committee
Term Loans Risk CommitteeTechnology Risk Committee FlexiPay Risk Committee
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 53
Risk assessment
framework
Enterprise risk
management
1
3 2
1. Evaluate
l Identify key risks
l Set risk appetite
l Assess adequacy of existing controls
l Estimate residual risk
2. Respond
l Design control improvement plans
l Prioritise remediation work and assign
responsibilities
3. Monitor
l Track business performance vs. risk appetite
l Report, analyse and escalate risk incidents
l Identify new or emerging risks
l Track delivery of agreed control improvements
Evaluate
As part of its responsibilities under the ERMF the
Board has formally recognised a series of risks that are
continuously present at Funding Circle and can materially
affect the achievement of Funding Circle’s objectives.
These risks have been organised under a consistent
and simple taxonomy with a hierarchy of risk categories,
which facilitates risk management and oversight. The
management of these risks is assigned to designated
business owners who regularly formally assess the level
of these risks, the adequacy of controls and the need for
further mitigations.
Respond
The appropriate risk response ensures that risks are
within appetite. At Funding Circle we have four types of
possible risk responses:
l accept the risk;
l take mitigation actions (such as additional risk controls)
to reduce the risk;
l stop the existing activity/do not start the proposed
activity to remove the risk; or
l continue the activity and transfer the risk to another party
(e.g. insurance).
Monitor
Monitoring and reporting on Funding Circle’s risk
exposures are undertaken through risk governance
structures. The ARC receives a consolidated risk report
no less than three times a year detailing the risks
facing the Group and mitigation plans, as well as the
risk outlook. The ARC is also provided with metrics and
regular reports about the activities of the Audit, Risk and
Compliance functions.
Risk assurance
Assurance on the management of risk is provided by
the Three Lines of Defence model including the Internal
Audit function. We also execute external annual controls
assurance reports (e.g. ISAE 3402) certified by auditors.
A standard risk assessment framework is used to evaluate risks
at both the Business Unit and Group levels, enabling consistent
measurement. Risk assessments are carried out by those
individuals, teams and departments that are best placed to
identify and assess potential risks. They are supported in this
process by our Risk and Compliance teams.
We typically follow the evaluate/respond/
monitor methodology:
Risk management continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202454
Principal risks and uncertainties
The Board confirms that throughout 2024 a robust assessment of
the principal & emerging risks facing Funding Circle was completed.
A comprehensive list of Group-wide risks and emerging risks was reviewed and monitored throughout the
year. The most significant risks and uncertainties faced by Funding Circle are listed in the table below,
categorised by principal risk:
Strategic risk
Strategic risk is defined as the failure to build a sustainable, diversified and profitable business that can
successfully adapt to environmental changes due to the inefficient use of Funding Circle’s available resources.
Risk appetite
Funding Circle will make efficient use of its available resources to build a sustainable, diversified and profitable business.
Key risks Management of risk Change in risk in the year
Strategic risk
Risk arising from
the failure to build a
sustainable, diversified
and profitable
business that can
successfully adapt to
environmental changes.
The ExCo manages the strategic planning
process based on risk appetite, financial
considerations, strategic themes, market
trends and economic assumptions.
We manage strategic risk by:
l performing a thorough, in-depth business
strategy review at least once a year;
l reviewing financials, strategic plans which
include new products and initiatives, and key
performance indicators;
l reviewing the strategic risk implications of
new products, business expansion, and other
Company initiatives and projects; and
l ensuring that the Board has oversight of
strategic risk and approves strategic business
plans at least annually.
Market expectations are that interest
rates have now peaked which should
ease credit conditions. However, the
impact of the broader macroeconomic
climate on SMEs remains uncertain.
This leads to uncertainties around
borrower and investor demand which
may impact our strategic objectives.
Funding Circle has also continued to
grow new products such as FlexiPay
for which performance and demand
may be uncertain until they reach
sufficient scale.
We closely monitor these trends and
we continuously adjust our product
offerings to fit market conditions and
meet evolving customer demand.
Risk trend key
Increasing Stable Decreasing
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 55
Principal risks and uncertainties continued
Key risks Management of risk Change in risk in the year
Economic environment
Risk arising from
macroeconomic or
political factors that
may impact funding,
credit performance, and
overall financial stability.
It encompasses broader
considerations, including
demand fluctuations,
funding availability, and
cost management.
This risk reflects the
potential failure to
establish a sustainable,
diversified, and profitable
business model capable
of adapting to evolving
economic and regulatory
environments.
We continually monitor the health of our loan
portfolios and perform stress test simulations
to help ensure that loan returns remain resilient
in the context of risk volatility. Key mitigating
actions include (but are not limited to):
l annual stress testing of all loan portfolios;
l resilient credit strategy and continuous
tuning of risk and pricing parameters to
correct for possible deviations in returns;
l monthly monitoring of internal and external
signals as part of the TLRC & FRC; and
l a robust in-house Collections and Recoveries
(C&R) function, designed with built-in
scalability to adapt to evolving demands.
Our capabilities are enhanced by automated
strategies and self-service solutions,
ensuring efficiency and responsiveness.
Additionally, we maintain a strategic
partnership with a specialist Debt Collection
Agency (DCA), which can be leveraged in the
event of a significant economic disruption,
such as the Covid-19 pandemic.
Interest rates have begun to reduce
and the majority of macroeconomic
indicators are better than at the end of
2023. Nonetheless, the macroeconomic
environment remains uncertain and
insolvencies are at an elevated level
to historical norms.
Environmental, social and governance risk
Environment, social and/
or governance events
or circumstances could
cause an actual or
potential material negative
impact on Funding Circle’s
financial performance or
reputation.
l Our ESG framework outlines our approach
to ESG and is approved by the Board.
l The Board retains ultimate responsibility
for providing the strategic focus, support
and oversight for the implementation of
the Group’s ESG strategy, including for
climate-related risks and opportunities.
The Board delegates certain matters related
to climate-related risks and opportunities
to two Committees:
l the ESG Committee is responsible
for oversight of the Group’s overall
ESG strategy, including climate-
related opportunities and voluntary
commitments; and
l the ARC is responsible for oversight of
risk management related to ESG risks,
including climate-related risks.
We continue to integrate climate-related
risks into our ERMF and mature our
ESG framework.
We continue to assess our climate-
related risks and opportunities and
further embed them into day-to-day
practices and first-line teams.
For further information, please see
ESG section.
Strategic risk continued
Risk appetite continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202456
Funding and balance sheet risk
Funding and balance sheet risks are the risks associated with the funding of our product set of Term Loans and
lines of credit and any exposure that our balance sheet has to this funding through normal and stress scenarios.
Risk appetite
Funding Circle will make efficient use of its balance sheet and optimise and diversify funding and liquidity sources to
enable a balanced funding strategy whilst limiting downside risk.
Key risks Management of risk Change in risk in the year
Funding risk
Funding risk is the
risk that demand from
borrowers for credit
cannot be met by the
providers of that funding
(institutional investors in
the case of Term Loans
and Funding Circle and
CitiBank in the case of
lines of credit). This risk
varies with the economic
attractiveness of Funding
Circle products as an
investment, the level of
diversification of funding
sources and the level of
resilience of these funding
sources and their returns
through economic cycles.
Funding Circle’s business model is to be a lending
platform that efficiently matches the supply of
capital to the demand of SME borrowers.
We carefully manage this matching by:
l building long-term relationships with
investors and developing a forward-looking
pipeline of new investors;
l actively managing concentration risk and
diversifying sources of funding;
l managing Funding Circle’s lending activities
whether through direct lending capacity,
securitisation capacity or investment fund
lending vehicles;
l monitoring a broad range of management
information and key performance indicators at
the BSMC, TLRC, FRC and Board levels; and
l leveraging an experienced capital markets
team for sales and transaction structuring.
Despite 2024 providing a number
of macroeconomic challenges, we
experienced demand from institutional
investors to fund new loans. This
demonstrated the trust our funding
partners place in our risk management
and operational processes, as well
as their previous experience of
stable, robust and positive returns on
their investments. We also revised
our lending rates to match market
movements and maintain loan returns.
We have onboarded new investors,
continuing the trend from the previous
years and renewed existing investors
cementing strong institutional
relationships providing a good basis
for our future funding needs.
Balance sheet risk
Balance sheet risk is the
risk that, where Funding
Circle has put its balance
sheet to use in funding
either Term Loans or lines
of credit, investment
positions reduce in value
or cannot be exited at
an economically viable
price; the risk that Funding
Circle liabilities cannot be
met when they fall due
or can only be met at an
uneconomic price. This
risk is also associated with
interest rate fluctuations,
particularly in the context
of levered investments.
Balance sheet risk applies
to all products offered,
the potential challenges
faced in managing
investment positions and
meeting obligations under
favourable conditions.
We carefully manage this risk by:
l setting clear guardrails for Funding Circle
balance sheet exposures and following
a set of agreed investment principles to
guide capital allocation;
l maintaining a prudent level of liquidity to
cover unexpected outflows to ensure that
we are able to meet financial commitments
for an extended period, including under
stress scenarios;
l regularly monitoring investment performance
and assessing headroom against the trigger
hurdles agreed with senior lenders;
l considering a broad range of management
information and key performance indicators
at the senior management level; and
l leveraging a dedicated and experienced
Balance Sheet Management team.
Our overall approach to having a
robust balance sheet and prudent
management of liquidity remains
unchanged.
Legacy SME loans on our balance sheet
continue to perform strongly as they
amortise down.
FlexiPay remains funded from our own
cash, leveraged with senior financing
from CitiBank. During the year we added
a Cashback credit card product to the
FlexiPay suite, which is also funded
through the same levered vehicle. The
credit performance of these products is
in line with our expectations. We have
sufficient disposable cash to cover our
liquidity needs and any credit downside
risk, including when tested against
stressed liquidity scenarios, and to fund
our medium-term plan going forwards.
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Funding Circle Holdings plc | Annual Report and Accounts 2024 57
Principal risks and uncertainties continued
Credit risk
Credit risk is the risk of financial loss to an investor including Funding Circle itself when lending from its balance
sheet should any borrower fail to fulfil their contractual repayment obligations. Credit risk management is the
sum of activities necessary to deliver a risk profile at portfolio level in line with Funding Circle management’s
expectations, in terms of net credit loss rate, risk-adjusted rate of return and its volatility through economic cycles.
Risk appetite
Whether or not Funding Circle owns any credit risk, credit risk of loans will be managed with the utmost care and
attention to deliver credit performance and returns in line with expectations.
Key risks Management of risk Change in risk in the year
Credit risk
Borrower acquisition
Credit performance and
returns of new loans can
deviate from expectations
due to several factors:
changes in credit
quality of incoming
applications, calibration
of risk models or strategy
parameters, and control
gaps in processing loan
applications.
Portfolio risk
management
Credit performance
and returns of existing
portfolio can deviate
from expectations
due to several factors:
deterioration of credit
environment, increased
competition driving
higher prepayment rates,
effectiveness of portfolio
monitoring, collections
and recoveries.
Funding Circle’s aim is for well-balanced loan
portfolios that generate positive returns for
investors through the economic cycle.
We are actively managing credit risk by:
l formulating credit risk policies (covering
credit assessment and risk grading, portfolio
monitoring and reporting, collections and
recoveries) and ensuring adherence to
these policies;
l recruiting, training and managing expert
risk professionals with the adequate skills,
objectives and capacity;
l establishing the formal mandates and
authorisation structure for setting risk
parameters and approving loans;
l performing independent quality control of
credit decisions;
l limiting concentration risk to counterparties
and industries;
l actively monitoring the performance of the
loan portfolios and the market trends that
could affect performance;
l implementing adequate procedures and
controls for model risk (including the
independent validation and monitoring of
credit scoring models);
l performing annual stress tests with regards to
government programmes, tightly controlling
adherence to eligibility criteria;
l having adequately staffed and well trained
C&R department;
l ensuring forbearance tools and policies
are fully integrated in customer life
cycle management;
l constantly monitoring our portfolio
for credit insights that feed into the
underwriting policies/models and
decisioning infrastructure;
l regular pricing reviews to ensure adequate
risk-adjusted returns for our investors in a
more volatile interest rate environment; and
l active management of credit limits
and unused credit limits in the case of
open-ended products.
Whilst our portfolios are showing
resilience and generally performing
well, we do take into account the
economic environment as a potentially
significant challenge to our borrowers
and are adopting a prudent approach
to credit risk management. We are
continuously monitoring our portfolios
of existing lending and use the most
recent data to adjust our risk appetite
and underwriting policies.
Funding Circle is entering 2025 in
a strong position from a credit risk
standpoint, capitalising on our data
and experience since our inception.
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Funding Circle Holdings plc | Annual Report and Accounts 202458
Regulatory, reputation and conduct risk
Regulatory, reputation and conduct risk is defined as the risk of engaging in activities that detract from Funding
Circle’s goal of being a trusted and reputable company with products, services and processes designed for
customer success and delivered in a way that will not cause customer detriment or regulatory censure.
Risk appetite
Funding Circle will not engage in activities that detract from its goal of being a trusted and reputable financial services
company with products, services and processes designed for customer success and delivered in a way that will not
cause customer detriment or regulatory censure.
Key risks Management of risk Change in risk in the year
Regulatory risk
The risk that Funding
Circle’s ability to
effectively manage its
regulatory relationships
is compromised or
diminished, that the
Group’s governance and
controls framework is
not satisfactory given
business growth, or
that there is business
interruption by reason
of non-compliance
with regulation or the
introduction of business-
impacting regulation.
l We maintain vigilance around policy shifts,
and proactively engage with industry bodies
and policy-makers, highlighting our platforms’
features, benefits, and impact;
l We continue to implement and maintain
business practices and controls focused
on regulatory risk. These include controls
designed to comply with the Senior
Managers and Certification Regime and the
Consumer Duty;
l We continue to focus on governance and
controls and train all employees in such
matters relevant to their role;
l For ESG-related risks, including DEI, social
impact and climate change, we continue to
work with service providers to assist with the
integration of TCFD recommendations and
our net zero ambitions; and
l GenAI and emerging technologies feature
in Funding Circle’s data strategy as an
opportunity to enhance productivity,
innovation, and customer experience.
We recognise that the adoption of these
technologies creates potential risks to ethical
business practices and compliance with
certain legal and regulatory regimes. In 2024,
we established a GenAI steering committee
with representation from Funding Circle’s
Executive team focusing on oversight of the
successful adoption of GenAI in a responsible
way. Based on our current scale and use,
we consider this an emerging rather than
primary risk.
The Retail Investor product’s
trajectory remains downward from
a risk perspective, impacted by
balance reduction efforts. Low
residual performing balances are
anticipated to fully amortise by July
2025. The Consumer Duty came into
force for closed products on 31 July
2024, and we have reviewed against
expectations and taken the appropriate
actions to deliver good outcomes for
retail customers.
The use of personal guarantees in
commercial lending was a focus of
industry groups, as well as the regulator.
The FCA undertook an exercise to
identify potential harm where the
lending falls within the regulatory
perimeter, and we are encouraged to
see that the regulator did not identify
instances of poor practice. While our
lending activity is either unregulated
or exempt from regulation, we believe
it is important that lenders take notice
of the possibility of harm. To that end,
we became a supporter of the UK
Finance commercial finance industry
commitments to personal guarantees.
In October 2024, we saw the decision
by the Court of Appeal in a landmark
case on lender liability where
commission is paid to a broker in motor
finance arrangements. The potential
impact of the decision is widespread
and, while the case was focused on
consumer lending in the motor finance
industry, has created uncertainty across
the commercial lending industries.
We are closely monitoring the
developments and the outcome of the
appeal to the Supreme Court.
Increased regulation looms for ESG
risks, including mandatory disclosures
and labelling. We continue to proactively
monitor this area, and comply with all
current obligations.
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Funding Circle Holdings plc | Annual Report and Accounts 2024 59
Principal risks and uncertainties continued
Regulatory, reputation and conduct risk continued
Risk appetite continued
Key risks Management of risk Change in risk in the year
Reputation risk
Operational or
performance failures
could lead to negative
publicity that could
adversely affect our
brand, business, results,
operations, financial
condition or prospects.
We continue to implement and maintain
business practices and controls focused
on reputation management, including:
l ensuring risk and compliance considerations
for new or iterated products and initiatives;
l engaging fully with regulators when required,
and external advisers in relation to any new
or iterated products and initiatives that might
impact customer outcomes;
l undertaking specific projects to address
identified risk topics and issues, including
retrospective reviews, internal audit reviews
and monitoring and testing programmes; and
l updating and refining our approach to issue
and risk identification and management.
Continued investment in FlexiPay and in
newer products, including the Cashback
credit card, presents potential risks
as a higher number of customer
touchpoints leads to more potential
for customer dissatisfaction. These
factors are closely monitored to ensure
smooth operations and optimal product
performance.
Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems
or from external events.
Risk appetite
Funding Circle will operate well managed processes with reliable performance and effective controls preventing
significant and non-anticipated operational risk losses.
Key risks Management of risk Change in risk in the year
Client money risk
Failure of Funding Circle
to adequately protect and
segregate client money
may lead to financial loss,
reputational damage and
regulatory censure.
Funding Circle holds funds for retail and
institutional investors in segregated client
money bank accounts in line with the Financial
Conduct Authority’s client money (‘‘CASS’’)
regulations. We continue to manage the
risk through:
l daily payments and reconciliation controls;
l a monthly CASS governance sub-committee
focused on providing oversight and challenge
regarding the effectiveness of client money
controls, making decisions in relation to
client money and reviewing management
information and regulatory returns, as well as
reviewing risks and mitigating controls when
introducing new product cash flows into the
client money framework;
l oversight from the Funding Circle
Limited Board;
l annual external CASS audit providing
assurance on the Firm’s compliance with
the FCA’s “CASS” rules; and
l With the runoff of retail investor funds, the
risk profile has reduced, becoming primarily
B2B rather than consumer-focused.
In 2024, we have maintained a robust
control environment in relation
to payment creation, payment
authorisation, and monthly reporting
and have increased efficiency and
accuracy across the reconciliation
review process through adoption of a
specialised third-party client money
reconciliation tool.
Controls implemented in the 2023
for the late payment money flow are
embedded in the control environment,
and we continue to comply with the
regulatory requirements in relation to
holding and treatment of client money
and perform internal and external client
money reconciliations daily.
Proactive contact continued to be
made with our retail investors to
create awareness of funds available to
withdraw in their legacy portfolios, and
we saw the balance held continue to
reduce throughout 2024.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202460
Key risks Management of risk Change in risk in the year
Financial crime
Risk of regulatory
breach, financial loss
or reputational damage
arising from a failure to
adequately manage or
prevent money laundering,
terrorist financing, bribery
and corruption, or to
comply with sanctions
regulations.
l We comply with the laws and regulations
designed to counter money laundering,
terrorist financing, corruption and bribery is
fundamental to Funding Circle’s operations;
l The Board has adopted policies to
address financial crimes that have been
implemented through formal standards and
procedures; and
l We have a dedicated Financial Crime
Operations team within the first line of
defence that is advised, challenged and
monitored by the second-line Financial
Crime Compliance team.
The growth of the FlexiPay product
has added complexity and risks related
to money laundering and fraud as
the product scales. We continue to
undertake rigorous fraud, anti-money
laundering and Know Your Customer
checks as part of our processes;
however, further improvement and
iteration will be required as the
product matures.
Process risk
Failure to originate and
service loans in line
with Funding Circle
internal policies, investor
guidelines and third party
loan guarantees (e.g. BBB)
may result in Funding
Circle repurchasing loans
from investors.
The risk of operational
incident could impact
the ability to originate
new loans or the
ability to service loans
through collections from
borrowers and return of
money to investors.
We actively manage process risk by:
l continuing to automate key controls;
l performing robust first-line quality assurance
and secondary checks on manual processes;
l monitoring and testing of key controls;
l reviewing key risk indicators as part of the
Business Unit Operational Risk Committee;
l reporting, reviewing and resolving
operational errors;
l performing independent quality control
checks and ensuring highlighted issues
are resolved;
l implementing adequate policies and
procedures;
l providing training and education on risk
culture and risk management; and
l performing supplier due diligence and
undertaking ongoing performance
monitoring of key suppliers.
Building upon the effectiveness of
our established first-line of defence
controls, we sustained a stable process
risk profile over the past year.
In addition, we carry out independent
quality checks to ensure that all loans
originated are compliant with loan
eligibility requirements.
In October 2024 an application for
summary judgement, which related to
two loans originated on the Funding Circle
platform and now held by a third party
debt buyer, was dismissed. The questions
relate solely to who has the right to bring
legal proceedings. We have taken legal
advice and are confident that the claimant,
being the third party debt buyer, will be
successful at trial.
The growth of Funding Circle’s
FlexiPay product may lead to increased
operational and third-party risks due to
its reliance for processing transactions.
To ensure the effectiveness of our internal
controls, we perform both internal and
external assurance activities. Our external
assurance process which included an ISAE
3402 Control Report yielded satisfactory
results. In FY 2024, an internal Risk &
Control Self-Assessment was conducted.
The overall risk profile remained within
appetite. A few areas have been identified
for further control enhancement, we are
actively working to address these areas
and ensure continued alignment with our
risk appetite.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 61
Technology risk
Technology Risk refers to the potential negative consequences that can arise from the use or implementation
of technology, including hardware, software, and data management systems. Technology risks can arise from
a variety of sources, including hardware failures, software bugs, cyber attacks, data breaches, and user errors.
In response to evolving threats and the rise of GenAI, Technology risk has been designated a “Principal Risk”,
ensuring stringent oversight and proactive mitigation. We have made significant strides in enhancing our security
and data maturity posture. We are committed to continuous improvement and will continue to mature our security
and data practices.
Risk appetite
Funding Circle will manage its technology, data, and security risks with effective controls, preventing significant and
non-anticipated loss of confidentiality, integrity and availability of systems and data.
Key risks Management of risk Change in risk in the year
Technology risk
Failure of the technology
platform could have a
material adverse impact
on Funding Circle’s
business, results of
operations, financial
condition or prospects.
l Technology remains central to Funding
Circle’s operations. Recognising the rise of
GenAI and the evolving nature of threats, the
Risk Committee upgraded technology risk
to a standalone principal risk. This change
enhances oversight of technology and data
risks now and into the future; and
l We continue to make significant investments
in our technology platform to ensure
it is resilient and scalable to support
business growth.
We have improved our technology
automation, alerting and incident
response capability to maintain a stable
platform to enable business growth,
scalable products and services.
Technology risk and technical resilience
continue to improve with more
robust testing capabilities in place to
support changes before production
implementation. Nevertheless, we
remain committed to explore additional
opportunities to further strengthen
our approach.
Information security
Failure to protect the
confidential information
of Funding Circle’s
borrowers, investors
and IT systems may
lead to financial loss,
reputational damage and
regulatory censure.
l Information security is a priority for Funding
Circle as a technology-driven company;
l As such we maintain in-depth defence with
a multi-layered control infrastructure; and
l Information security is appropriately
managed, based on materiality, and is
escalated to the TRC.
In 2024, we continued to see
improvements in our information
security infrastructure with a strong
focus by the Board.
We have increased our overall security
maturity and continue to adapt our
information security controls as the
threat landscape continues to evolve.
Data risk
Failure in our ability
to acquire, use, secure
and transform our data
assets could result in
adverse material impacts
across Funding Circle.
l Our data risk management framework is
aligned to the Group’s ERMF; and
l Data risks are appropriately managed,
based on materiality, and are escalated
to the TRC.
We continue to mature and embed
our data governance framework and
organisational structure to manage
data risk including the implementation
of new tools to maintain the standards
of documentation, clarity and integrity
of our data.
Protecting our customer and employee
data, in particular personally identifiable
information, is a high priority, and we
take appropriate measures to prevent
losses or breaches.
Principal risks and uncertainties continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202462
Viability statement
In accordance with the UK Corporate Governance Code
(the “Code”), the Directors have assessed the future prospects
and viability of the Group for a period significantly longer
than 12 months from the approval of the financial statements.
Assessment of prospects
The Directors have determined that a three-year period
to 31 December 2027 constitutes an appropriate period
over which to perform the assessment as:
l it is within the time period which the Group’s medium-
term planning process covers (up to five years);
l it represents a period over which there is a reasonable
degree of confidence in the reliability and accuracy of
forecasts; and
l periods beyond this point in a high-growth business
like Funding Circle are significantly harder to
predict accurately.
The Group’s overall strategy and business model, as
set out on pages 10 to 11, and 8 to 9, are fundamental in
driving the growth of the business and therefore its future
prospects. The key factors that are likely to affect the
future prospects of the Group, aside from macroeconomic
factors, include the ability to:
l develop and introduce new credit products;
l grow awareness of the Funding Circle brand in order to
attract more businesses to our platforms;
l retain, diversify and increase funding from a variety of
investors in order to meet future borrower demand; and
l continue to invest in data analytics and technology
leading to innovation, expanded datasets, enhanced
credit models, better customer experience and a
greater conversion rate of applicants.
Funding Circle’s future prospects are assessed through
the Group’s strategic planning process. The strategic
planning process involves a detailed review of the
medium-term plan by the CEO and CFO. This is done
in conjunction with the Executive Committee (“ExCo”),
consisting of functional leaders, together with a review
and discussion by the Board.
The strategic plan starts with the Group’s 2025 annual
budget which is subject to re-forecasting periodically
through the year. The budget is extended into the second
and third year of the plan using the Group’s various
drivers and expected growth rates experienced across
the Group.
Progress against the financial budget and forecasts is
then reviewed each month by the ExCo and reported to,
and challenged by, the Board.
Key assumptions
The key assumptions underpinning the strategic plan
(before severe but plausible scenarios) include:
l there is sufficient investor funding in place to support
projected growth in originations;
l levels of marketing spend, the number of applications,
conversion rates, average loan sizes and mix of product
channels which drive originations and loans under
management (“LuM”);
l levels of repayments, prepayments, defaults and
recoveries which drive movements in LuM;
l expected yields on loans originated and service fee
charges which drive fee income;
l interest income receipts and interest expenses
related to our investment vehicles which drive net
investment income;
l costs across Business Units with specific focus on
fixed costs and those that fluctuate with income such
as marketing costs;
l headcount consideration across functions and
departments given it is the Group’s largest cost;
l an assumption of continued investment in the Group’s
IT infrastructure and its product set but with the
expectation of no fundamental breakdown in the IT
infrastructure or major data loss;
l review in the context of indicative market share;
l there is no improvement of deterioration to the
current macro environment conditions over the
medium term; and
l we have not assumed further government stimulus
packages over the medium term.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 63
Assessment of viability
The output of the medium-term plan reflects the Directors’
best assessment of the future prospects of the Group over
the next three years.
As part of this assessment, the Directors have considered
and carried out a robust assessment of the principal risks
as set out on pages 55 to 62. They have also considered
the potential impact of the risks on the viability of the
Group with specific focus on shorter-term liquidity
needs and its availability, including liquidity currently tied
up in investment products. The Group currently holds
£151 million of unrestricted cash together with £54 million
equity invested in loans.
The financial plan was subject to scenario analysis to
assess those risks and quantify the financial impact
on the Group. The Group also operates liquidity and
capital guardrails that it monitors which are of particular
importance in the shorter term.
The scenario that represented the most severe but
plausible scenario was modelled as described below. This
sensitivity took into account the likely mitigating actions
to the operations. The scenario is hypothetical and
severe but designed to stress the business model and the
viability of the Group.
Severe but plausible scenario
Under a severe downturn it is expected that:
l there would be a short-term period in year one where
there would be significantly reduced transaction fees
earned, driven by increased inflation and interest rates,
alongside a large operational risk event impacting
the Group;
l following a further severe global downturn there would
be a significant increase in the number of borrowers
defaulting impacting LuM and our invested capital
cash flows;
l the returns for investors would be negatively affected
by the widening of discount rates and deterioration of
loan performance resulting in a withdrawal of funding;
l this in turn would reduce the level of originations unless
higher incentives were offered to investors to continue
funding; and
l over the medium term originations are subdued
with LuM and servicing fees consequently
negatively affected.
A further subset of risks, including the reduction in
trust from both borrowers and investors, has also been
considered within this scenario. We considered whether
environmental stress would materially impact the Group
but consider the existing stresses above would be more
material to the near to medium term.
The mitigating actions that would be taken by
management include a reduction in the overall marketing
and salary spend through hiring freezes, a tightening
of the credit models to improve the levels of return for
investors and increased costs of borrowing for SMEs. Our
medium-term plan assumes we continue to be the sole
equity funder of FlexiPay.
In a stressed scenario, a further management action
is that we would curtail the growth of FlexiPay and
this would reduce the level of investment required by
Funding Circle.
Links to principal risks and uncertainties
l Strategic risk
l Credit risk
l Liquidity risk
Going concern
In addition to the broad viability of the Group, the
Directors have assessed the Group’s going concern
presumption over the 15-month period to 30 June 2026.
The shorter-term projections within the Group’s strategic
plan are also used to assess the Group’s ability to operate
as a going concern. As at 31 December 2024, the Group
had net assets of £217 million, together with unrestricted
cash of £151 million and £54 million of invested capital,
some of which could be monetised if liquidity needs
arise. At all times during the assessment, and after stress
scenarios are modelled, the Group retains sufficient
financial resources.
The stress testing confirmed that the Group’s forecast
net cash position remained positive and that none of the
scenarios would threaten the going concern presumption
over the assessment period or the Group’s regulatory
capital requirements.
In all cases including the severe but plausible scenario
above, with appropriate management actions, the
scenarios were controllable to mitigate the impact on
the Group’s liquidity for the broader assessment of the
Group’s going concern.
The Group has limited regulatory capital requirements to
maintain sufficient unrestricted cash. At all times through
the forecast period, and after stress scenarios, the Group
remains within the required levels.
Based on this assessment, the Directors have a
reasonable expectation that the Group will be able
to continue in operation and meet its liabilities and
obligations as they fall due over the period to 30 June
2026 as well as for at least the next 12-month period from
the date of this Annual Report. See also page 128 of the
financial statements related to going concern.
Viability statement continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 202464
Corporate
governance
66 Chair’s introduction
67 Governance at a glance
68 Board of Directors
70 Corporate governance report
78 Report of the Nomination Committee
82 Report of the Audit and Risk Committee
88 Report of the ESG Committee
90 Directors’ remuneration report
101 Annual report on remuneration
112 Report of the Directors
115 Statement of Directors’ responsibilities in
respect of the financial statements
CORPORATE GOVERNANCE
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 65
Code principles
Please see below for details regarding the
application of the principles of the Code.
Board leadership and company purpose (A-E)
Risk management – pages 51 to 62
Our people and engagement – pages 20 to 23, page 70
Engaging our stakeholders – pages 40 to 43, page 70
Division of responsibilities (F-I)
Corporate governance report – pages 70 to 77
Composition, succession and evaluations (J-L)
Report of the Nomination Committee – pages 78 to 81
Directors’ biographies – pages 68 to 69
Board effectiveness review – page 76
Audit, risk and internal control (M-O)
Corporate governance report – pages 70 to 77
Report of the Audit and Risk Committee – pages 82 to 87
Risk management – pages 51 to 62
Viability Statement – pages 63 to 64
Remuneration (P-R)
Directors’ Remunerations Report – pages 90 to 100
Chair’s introduction
Governance
Confirmation of how we have complied with the 2018
Code for the year under review is set out on page 75.
From FY 2025, the updated 2024 Code will apply to the
Company (excluding provision 29 which will apply from
FY 2026), and work is underway to ensure that we are
prepared for these changes.
I hope you find the Corporate Governance Report
informative. The Board will be available at the Annual
General Meeting to respond to any questions you may have.
Andrew Learoyd
Chair
6 March 2025
As a Board, we are committed to
maintaining a strong and resilient
corporate governance foundation
that ensures Funding Circle is a
successful, sustainable business
that benefits all our stakeholders
over the long term.”
I am delighted to introduce Funding Circle’s Corporate
Governance Report for the financial year ended 31 December
2024, which will be my final report before handing over the
Chair role to Ken Stannard at the end of the 2025 AGM.
As a Board, we are committed to maintaining a strong and
resilient corporate governance foundation that ensures
Funding Circle is a successful, sustainable business
that benefits all our stakeholders over the long term.
Board activities
2024 was a pivotal year of change for the Group. Key
areas of the Board’s focus included Board and senior
management succession planning, another Remuneration
Policy review, Group strategy, Committee governance
enhancements, and simplification of the Funding Circle
business structure (as discussed further in the Chief
Executive Officer’s Statement on pages 5 to 7). We
cover these updates within the respective delegated
Committees’ reports later in this report.
Board succession
As noted further in the Nomination Committee Report,
the Board’s composition was reviewed this year, taking
into account a range of issues including its size, the
tenure of the Directors, its diversity, its independence and
the range of skills and experience required to support the
Company in this next stage of its strategic development.
This is still a work in progress and the Board will continue
to work on increasing its independence to comply with
provision 11 of the UK Corporate Governance Code.
Andrew Learoyd
Chair
Funding Circle Holdings plc | Annual Report and Accounts 202466
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Governance at a glance
Eric Daniels retired from
the Board on 15 May 2024
at the AGM
Male
Female
Board gender balance
(as at 31 December 2024)
White
Asian/Asian British
Board ethnicity
(as at 31 December 2024)
Executive Director
Independent Non-Executive Director
Non-Independent Non-Executive Director
Board independence
(excluding Chair, as at 31 December 2024)
Board tenure
(as at 31 December 2024)
0–3 years
3–6 years
6+ years
Samir Desai CBE resigned from
the Board on 25 October 2024
Oliver White resigned as CFO
on 31 December 2024
Matthew King resigned
from the Board on
31 December 2024
Ken Stannard appointed
as Non-Executive Director
and Chair Designate on
1 January 2025
Tony Nicol appointed as CFO
on 1 January 2025
Andrew Learoyd to step down
as Chair at May 2025 AGM
Ken Stannard to be appointed
Chair post-May 2025 AGM
Board changes
during 2024 and
looking into 2025
Rolling three-year female
representation on the Board
30.0% 30.0%
37.5%
12.5%
50.0%
37.5%
37.5%
2
62.5%
2
3
87.5%
12.5%
2022 2023 2024
Board skills
(as at 1 January 2025)
Marketing/brand
ESG
Current executive leadership
Remuneration/human resources
Lending/credit
Corporate finance/equity capital management
Risk management
Financial services
Technology/innovation
Governance
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2024 67
Board of Directors
Board Committees
AR
Audit and Risk Committee
R
Remuneration
Committee
N
Nomination Committee
E
ESG Committee
D
Market Disclosure
Committee
Committee Chair
1
4
7
2
5
8
3
6
9
Leading our business
from the front
Incoming
FY25
Changes to the Board between
31 December 2024 and the date
of this Annual Report
Oliver White and Matthew King resigned from the
Board on 31 December 2024 so we have not
included their biographies in this report.
Tony Nicol was appointed as CFO and Ken Stannard
was appointed as Non-Executive Director and Chair
Designate, both with effect from 1 January 2025.
Incoming
FY25
Funding Circle Holdings plc | Annual Report and Accounts 202468
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
1
Andrew Learoyd
N
R
E
D
Chair of the Board
Term of office: Appointed to the Board as
a Non-Executive Director in February 2010
and became Chair of the Board in May 2016.
Independent: On appointment.
Skills and experience: Andrew spent
23 years working in investment banking as
a research analyst, in corporate finance, in
equity capital markets and finally as Chief
Operating Officer of the Equities Division
in Europe of Goldman Sachs. He retired
as a Managing Director of Goldman Sachs
in 2006. Andrew has been involved as an
angel investor, Non-Executive Director and
consultant to several start-up businesses.
Andrew was previously a Non-Executive
Director of Threshold Sports Limited until
the end of 2023.
External appointments: Andrew is also a
Director of WLG Learning Ltd which provides
educational services for children with
special learning disabilities.
2
Lisa Jacobs
D
Chief Executive Officer
Term of office: Lisa was appointed to
the Board as Chief Executive Officer on
1 January 2022.
Independent: No.
Skills and experience: Lisa joined Funding
Circle in 2012 and was previously UK
Managing Director and Chief Strategy
Officer. Prior to Funding Circle, Lisa
worked as a Management Consultant, both
independently and for the Boston Consulting
Group, where she had a financial services
focus. She has had roles in NGOs in Tanzania
and India.
External appointments: None.
3
Tony Nicol
D
Chief Financial Officer
Term of office: Tony was appointed to
the Board as Chief Financial Officer on
1 January 2025.
Independent: No.
Skills and experience: Tony joined Funding
Circle in 2018 as Director of Finance and
was part of the team leading the IPO. Prior
to Funding Circle, he was Group Financial
Controller at IG Group Holdings plc, where
he was responsible for all financial reporting
including budgeting and forecasting. Before
then, Tony worked at PwC as an Assurance
Director auditing and advising listed and
private businesses in a number of sectors.
Tony is an FCA of the ICAEW and holds a
BSc in Mathematics from the University
of Bristol.
External appointments: None.
4
Geeta Gopalan
AR
N
D
Senior Independent Director
Term of office: Geeta was appointed to
the Board as a Non-Executive Director
in November 2018. She became Chair of
the Audit and Risk Committee (previously
the Audit Committee) in November 2018.
Geeta was appointed as Senior Independent
Director in May 2021.
Independent: Yes.
Skills and experience: Geeta has over
25 years of experience of financial services
and retail banking, particularly payments
and digital innovation. Geeta was formerly
Executive Chair of Monitise Europe. Among
the many roles in her career, Geeta was
Director of Payment Services with HBOS
plc and previously Managing Director, UK
Retail Bank and Business Development Head
EME at Citigroup. Geeta was previously
a Non-Executive Director at Dechra
Pharmaceuticals until January 2024. Geeta
is also a chartered accountant.
External appointments: Geeta serves as a
Non-Executive Director of NatWest Group plc,
Auto Trader Group plc and Intrum AB (where
she is Chair of the Risk Committee). Geeta is
also a Trustee for the Old Vic Theatre.
5
Hendrik Nelis
Non-Executive Director
Term of office: Hendrik was appointed to
the Board as a Non-Executive Director in
September 2013.
Independent: No.
Skills and experience: Hendrik joined
Accel in 2004 and focuses on software,
fintech and consumer internet companies.
He led Accel’s investments in KAYAK
(NASDAQ: KYAK, acquired by Priceline),
Showroomprive (EPA: SRP), Funding Circle
(LON: FCH), Celonis, CHECK24, Instana,
Miro and Zepz.
Hendrik started his career in Silicon Valley
as an engineer at Hewlett-Packard before
founding a venture-backed software
company. He is from the Netherlands and
graduated from Harvard Business School
and Delft University of Technology.
External appointments: Hendrik serves as
Manager, Partner Director and/or Member
at a number of Accel entities, as well as a
Director or supervisory board member of
several other companies.
6
Neil Rimer
E
Non-Executive Director
Term of office: Neil was appointed to
the Board as a Non-Executive Director in
March 2011.
Independent: No.
Skills and experience: Neil is a Co-Founder
and Partner of Index Ventures. Before
starting Index Ventures, he spent four
years with Montgomery Securities in San
Francisco. Neil was previously a Director of
Photobox Holdco Limited, Supercell Oy and
The Climate Corporation.
External appointments: Neil is currently
a Director on various boards of companies
based in the UK, Europe, the Cayman Islands
and the US including Raisin GmbH, Nexthink
SA, , Sofia Holdings Limited, Taxfix GmbH
and Typeform S.L. He is also the Co-Chair of
Human Rights Watch.
7
Helen Beck
R
N
AR
E
Non-Executive Director
Term of office: Helen was appointed to
the Board as a Non-Executive Director in
June 2021.
Independent: Yes.
Skills and experience: Helen has over
25 years of experience in financial services,
particularly in remuneration design,
regulation and human resources. Helen was
formerly a Partner at Deloitte and, among
her previous roles in her career, Helen was
Global Head of Reward at Standard Bank
and Head of McLagan Europe (part of Aon)
and held roles in human resources at Fidelity
International. Helen was also previously a
Non-Executive Director of Irwin Mitchell.
External appointments: Helen serves as
Non-Executive Director of Picton Property
Income Limited (where she is Chair of
the Remuneration Committee) and as an
independent adviser of Charles II Realisation
LLP. Helen is an independent adviser for the
Wellcome Foundation’s Remuneration Sub-
Committee, is a Governor of the University
of Bedfordshire and independent member of
the Remuneration Committee for The British
Olympic Association.
8
Ken Stannard
N
R
Non-Executive Director and Chair
Designate
Term of office: Ken was appointed to the
Board as a Non-Executive Director and Chair
Designate in January 2025.
Independent: Yes.
Skills and experience: Ken brings 30 years’
experience in credit, lending and payments,
having held senior executive roles at Lloyds
Banking Group, Capital One and American
Express, and most recently as CEO of Cabot
Credit Management. Prior to his executive
roles, he was a partner at Oliver Wyman LLC.
Ken has an MBA from INSEAD and an MA
in Engineering Science from the University
of Oxford.
External appointments: Ken is currently
Chair of Castle Trust Capital Plc, Castle Trust
Holdings Limited and Viewture Limited. He
is currently also a Non-Executive Director of
Verastar Ltd. and Chair of its Remuneration
Committee and Lead Director of Cepal
Hellas Financial Services S.A.
9
Lucy Vernall
D
Company Secretary,
Chief Legal Officer
Term of office: Lucy was appointed
Company Secretary in July 2014.
Independent: Not applicable.
Skills and experience: Lucy is responsible
for the Legal, Compliance, ESG and Comms
functions of the business, in addition to
being Company Secretary. Prior to joining
Funding Circle in 2014, Lucy was one of
the founder members of Kemp Little LLP, a
technology focused City law firm. She was
Managing Partner of the firm from 2009
until 2011, when she became Wonga’s first
General Counsel.
External appointments: Lucy serves on the
board of the charities Bardhan Research
and Education Trust of Rotherham and The
Emerson Trust.
Funding Circle Holdings plc | Annual Report and Accounts 2024 69
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Corporate governance report
Funding Circle backs small businesses with the finance
they need to win and this purpose is underpinned by
several values including “Make it Happen” and “Live the
Adventure” which ask Circlers to embrace the founding
entrepreneurial spirit with which Funding Circle was
established. The Board embraces the Company values
as part of its decision-making process which is always
in the long-term sustainable interests of the Company
to generate value for shareholders and the wider
society. More information on the Company’s mission,
values and strategy is set out in the Strategic Report on
pages 1 to 64.
Measuring performance against strategic objectives
A review of performance against the Company’s
strategy, objectives, business plans and budget is
considered at Board meetings. Maintaining oversight
of the Company’s operations, ensuring competent and
prudent management, sound planning, an adequate
system of control, and adequate accounting in addition to
reviewing any significant risks faced by the Company and
establishing and maintaining risk management systems in
co-ordination with the Audit and Risk Committee, ensures
the Company fulfils its business objectives.
The Board is comfortable that sufficient resources are
in place for the Company to meet its objectives and
measure performance against them. As the Company
grows and seeks to achieve its medium-term plan,
the Board continues to support the ExCo with the
implementation of objectives and key results across
the whole business.
Our culture and employee engagement
We consider our employees and culture fundamental
to the success of our business. The Board monitors
the Group’s culture to ensure it is aligned with the
Company’s purpose, values and strategy. Helen Beck is
our dedicated Non-Executive Director for the workforce
providing a vital connection between the Board and
our Circlers. In 2024, Helen held an employee focus
group with various Circlers to gain diverse views across
various departments and she fed these views back to
the Board for discussion. In addition, the Board receives
regular updates from the Chief People Officer on Circler
initiatives and culture updates, including results from
employee surveys. Further information on how we engage
with our employees can be found on pages 20 to 23
and page 41.
As part of the Board’s responsibility to monitor and
oversee the Company’s culture, the Board discussed
and agreed that Helen Beck and the Chief People
Officer would set out a proposed schedule of further
opportunities for direct engagement between the Board
and employees during 2025.
Our workforce policies and practices are regularly
reviewed by the Board and Committees and the Board
is satisfied that they are consistent with the Company’s
values and support its long-term sustainable success.
In addition, as part of our “Be Open” value, we want
to ensure we foster an environment where Circlers
are encouraged and feel safe to freely raise issues
of concern. We have a dedicated whistleblowing
process which provides various channels for Circlers
to communicate and report issues of concern, including
anonymously. Our Audit and Risk Committee receives
regular whistleblowing updates. Further information can
be found in the Report of the Audit and Risk Committee
on pages 82 to 87.
Shareholder engagement
The Board is responsible for ensuring effective
engagement with, and encouraging participation from,
various stakeholders, including shareholders. Information
on how the Company has engaged with shareholders and
other stakeholders can be found in the “Engaging our
Stakeholders” section on pages 40 to 43.
Our Investor Relations team supports the Board with
continuous engagement with shareholders. In addition,
the Board receives copies of analysts’ and brokers’
reports on the Company along with a monthly Investor
Analytics Report which details key shareholders,
shareholder history, top buyers and sellers, market
analysis and share price performance to aid familiarity
with details of shareholdings.
The Company Secretarial function engages with
shareholders, providing support and information on
governance matters as required, whilst the Company’s
registrar also provides a range of shareholder services.
The Board has considered the feedback received from
the shareholder consultation held in early 2025 in relation
to the Company’s new Remuneration Policy and has taken
it into consideration when drafting the disclosures in this
Report. Details on our engagement with shareholders
who had significantly voted against certain resolutions in
the 2024 AGM can be found on page 114.
Board leadership
and Company purpose
Funding Circle’s purpose is to help small businesses get
the funding they need to win. When small businesses
succeed, they create jobs, support local communities
and drive the economy forward.
Funding Circle Holdings plc | Annual Report and Accounts 202470
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Board activities
The Board meets formally at least six times during the
year, with meetings planned around key events in the
corporate calendar, including the half-year and full-year
results and the AGM and an annual dedicated Strategy
Day. The Board also receives monthly management
financial reports and CEO updates in between meetings.
The Chair and Non-Executive Directors have regular
discussions without Executive Directors present. Ad hoc
meetings may be called as and when appropriate, as was
the case in 2024.
Standing items provide an anchor to the strategy and
provide the Board with a consistent view of progress
during the year, whilst sessions on priority topics
allow for deeper insight. A summary of the Board’s key
activities during 2024 is set out below. In addition, some
examples of key decisions taken by the Board in 2024,
in the context of its section 172 (1) duties, are set out
on pages 72 to 73. Agendas and accompanying papers
are distributed to the Board and Committee members
well in advance of each Board or Committee meeting.
These include reports from Executive Directors, other
members of senior management and external advisers,
as appropriate. All Directors have direct access to senior
management should they require additional information
on any of the items to be discussed.
The table below sets out attendance at the eight Board
meetings held in 2024. The attendance for the Committee
meetings is detailed in each of the Committee reports.
Director No. of meetings Attendance
Andrew Learoyd 8/8 100%
Lisa Jacobs 8/8 100%
Oliver White (resigned on
31 December 2024) 8/8 100%
Geeta Gopalan 8/8 100%
Hendrik Nelis 8/8 100%
Neil Rimer 8/8 100%
Helen Beck 8/8 100%
Matthew King (resigned on
31 December 2024) 8/8 100%
Samir Desai CBE (resigned on
25 October 2024) 7/7 100%
Eric Daniels (resigned on
15 May 2024)
3/3 100%
Key topics discussed by the Board
l Group’s financial results throughout the year
(incl. half-year reforecast)
l KPIs and milestones review
l Annual budget approval and quarterly forecasts review
l Capital allocation deep dive and approval of share buybacks
and capital reduction
l Risk and macro deep dive and approval of ERMF
l Committee updates
l Appointment of new Chair and CFO
l Internal evaluations of the Board and Committees
l Approval of Whistleblowing Policy
l Approval of risk management framework for
climate- related risks
l Approval of sale of US business
l Approval of cost efficiency actions and focus on go forward
profitability of UK business
l Customers and market deep dive
l Approval of strategy for FY 2025 and medium-term plan
l Technology and FlexiPay deep dives
l Review and approval of product propositions for Term
Loans, FlexiPay and Cashback credit card
l Employee engagement and culture updates
l Diversity and inclusion update
l Shareholder engagement updates
l Approval of Board Diversity Policy
l Review Workforce Engagement Non-Executive Director’s
report on employee focus group feedback
Governance, risk
and compliance
Culture and
engagement
Financial
performance
Strategy
Key
Funding Circle Holdings plc | Annual Report and Accounts 2024 71
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Communities
Government
and regulators
Shareholders
Institutional
Investors
BorrowersCirclers
Board activities continued
Board decision making and section 172(1) duties
Funding Circle has a wide and varied group of internal and external stakeholders which the Board keeps in mind
during all discussions. In addition, our Investor Relations team supports the Board with continuous engagement with
shareholders. Further information on how we have engaged with all our stakeholders can be found on page 40 to 43.
The Directors have full regard to their duties set out under section 172 of the Companies Act 2006 when making
decisions. Our section 172 Statement can be found in the Strategic Report on page 41. The following table summarises
how the Board and the wider Group have had regard to the duties under section 172(1) when considering specific
matters during the year.
Principal decision
Stakeholders
considered Board’s decision-making process
Approval of sale
of US business
and focus on
go forward
profitability of UK
business
Borrowers
Institutional
Investors
Shareholders
Circlers
Government
and regulators
Communities
The Board carefully considered the strategic direction of the Group following
the challenging macro economic environment in 2023. At the end of 2023,
Funding Circle’s US business was awarded an SBA issuer license (subject
to final SBA approval). While this reflected the progress made in the US and
offered attractive long-term growth, the Board recognised that it would require
a significant amount of cash and a different approach in terms of capital and
other resource requirements to grow the SBA proposition. The Board therefore
took the decision to simplify the business and focus on go forward profitability
of the UK business, believing that this would deliver greater shareholder value
with improved profitability and cash generation.
After due consideration and discussions over a number of months, in March
2024, the Board announced its intention to sell the US business and that it was
in early-stage discussions with interested parties. In addition to accelerating
profitability, this would also enable management to focus on the UK business
and delivering new products and an excellent customer experience to its
growing UK customer base. The Board appointed a Board Sub-Committee to
oversee the transaction and, following a thorough process involving several
interested parties, the Board agreed to sell the US business to iBusiness
Funding, LLC, a leading provider of lending solutions for banks and lenders
of all sizes with a specialisation in SBA lending. The transaction completed
on 1 July 2024. US impacted employees were carefully considered during the
sale process and Funding Circle worked with iBusiness Funding to ensure
that there were roles for as many individuals as possible post-acquisition
(including certain UK-based employees who transferred under the Transfer
of Undertakings (Protection of Employment) Regulations 2006).
Streamlining of
UK business and
cost efficiency
actions
Shareholders
Circlers
In May 2024, as part of the Group’s long-term strategic plan to promote
sustainable growth and to ensure a simpler, leaner and better positioned
UK-focused operation, the Board reviewed and approved management’s
recommendation of certain cost efficiency actions. This included a reduction
in employee headcount by c.120 and other changes to strengthen cost
management and efficiency across the business.
Funding Circle prides itself on its strong culture so this was a difficult decision,
but a necessary one to create a leaner, profitable business and reduce
leadership and management layers following the change to a UK-only business.
The wellbeing of Funding Circle’s employees has always been a material
consideration for the Board and the approach to the reduction of roles was
discussed at length, with a focus on a sympathetic and compliant process
and support for those impacted. This included offering enhanced redundancy
payments, payments in lieu of working notice periods where possible and
extended private health cover.
Corporate governance report continued
Funding Circle Holdings plc | Annual Report and Accounts 202472
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Principal decision
Stakeholders
considered Board’s decision-making process
Initiation of two
share buyback
programmes
and a capital
reduction process
Shareholders
Circlers
Government
and regulators
As part of the Group’s overall objective to provide sustainable long-term
stakeholder value, the Board regularly considers its capital allocation strategy
along with its budget and financial planning strategy. At the time of the full-year
results in March 2024, the Company had significant cash available in excess of
c.£200 million and available distributable reserves in excess of £30 million. The
Board also considered the share price to materially undervalue Funding Circle’s
business. After careful consideration, and having taken advice as to the options
available for a capital redistribution, in March 2024, the Board approved a share
buyback and cancellation programme of up to £25 million which was further
extended by up to a further £25 million in September 2024.
In addition, in October 2024, the Board approved the initiation of a capital
reduction process which completed in December 2024. The Board considered
this to be in the best interests of the Company and its shareholders (including
Circlers who are also shareholders through employee share schemes) as this
would increase distributable reserves by £294 million.
Appointment of
Chief Financial
Officer and new
Non-Executive
Chair
Borrowers
Institutional
Investors
Shareholders
Circlers
Government
and regulators
The Company disclosed in its 2023 Annual Report that it was commencing a
search for a new Non-Executive Chair and that there would be other changes
to the Non-Executive Board composition as some Directors were coming to the
end of their tenures. It also announced in May that Oliver White had informed
the Board of his intention to stand down from his role. As part of the Board’s
decision-making process in relation to succession planning for the CFO and
Chair roles, the Board considered all stakeholders that would be impacted by
the outcomes of these appointments. For example, in addition to the underlying
skills, experience and capability required in the role, it was important that these
leadership appointments would add and reinforce the strong culture embedded
within Funding Circle. This was one of the considerations in appointing Tony
Nicol into the role – having been with Funding Circle for six years.
Additionally, finding a new Chair with a complementary skill set to the existing
Board, including card and credit experience, was important to the Board to
help drive its strategic decision making and enhance our borrowers’ end-to-
end experience. This was one of the reasons Ken Stannard was chosen by the
Board as the successor to Andrew Learoyd.
Approval of
launch of
Cashback credit
card
Borrowers
Institutional
Investors
Circlers
Shareholders
The Board approved the launch of FlexiPay in H2 2021 to further enable the
Group’s vision of supporting small businesses as they borrow, pay later and
spend to grow and manage their businesses. By the beginning of H2 2024,
FlexiPay had grown significantly. In response to customer feedback that they
wanted a business credit card providing benefits and rewards for everyday
business spending, in July 2024, the Board approved management’s proposal
to launch the Cashback credit card product. Having carefully considered the
evolution of the FlexiPay product, the Board considering that the proposed
product would complement FlexiPay in helping to solve customers’ cash flow
requirements and attract SMEs not currently looking to immediately borrow,
thereby enabling Funding Circle to properly start serving the spend use case.
The Board approved the proposal to enter the market with a leading cashback
proposition.
Adoption of risk
management
framework for
climate-related
risks
Government
and regulators
Communities
In 2024, the Board adopted a new climate risk management framework which
set safeguard thresholds for climate risk appetite and for physical and transition
risks. The framework was debated at the ARC and approved in November
2024, thereby integrating climate-related risks into the Group’s broader risk
management processes and underpinning its ongoing processes to identify
and assess climate-related risks.
Funding Circle Holdings plc | Annual Report and Accounts 2024 73
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Corporate governance report continued
The responsibilities for the Market Disclosure Committee,
which is chaired by the Company Secretary and
comprises the Chair of the Board, the Chair of the Audit
and Risk Committee, the CEO, the CFO and the CRO,
include overseeing the disclosure of information by the
Company to meet its obligations under the Market Abuse
Regulation, the FCA’s UK Listing Rules (“UKLR”) and the
Disclosure and Transparency Rules (“DTR”).
The ExCo provides leadership in the day-to-day
management of the business and implements the
strategy approved by the Board. The ExCo is supported
by a number of management committees which provide
consistent reporting on key areas of the business.
There is a flow of information both ways between the
management committees and the ExCo and the Board
of Directors and its Committees. Further details on the
management risk committees are available in the Risk
management section on page 53.
Board roles and responsibilities
There is a clear division of responsibilities between
the leadership of the Board and that of the Executive
Directors and the responsibilities of the Chair, CEO,
and Senior Independent Director are set out in writing,
reviewed and approved by the Board annually.
Audit
and Risk
Committee
Board
Market
Disclosure
Committee
Remuneration
Committee
ESG
Committee
Nomination
Committee
Chief Executive Officer
Executive Committee (“ExCo”)
Executive Governance Committee and Management Implementation Committees
(see risk governance structure on page 53)
Corporate governance framework
Division of
responsibilities
The Board has adopted a formal schedule of matters reserved for its approval and delegated other specific
responsibilities to the following five Board Committees: Audit and Risk, Remuneration, Nomination, ESG and Market
Disclosure. Each Board Committee has written Terms of Reference which define the role and responsibilities of the
respective Committee and these are reviewed annually, along with the schedule of matters reserved for the Board.
Further details can be found here: corporate.fundingcircle.com/who-we-are/corporate-governance/board-committees.
More information about the role and activities of each of the Board Committees, with the exception of the Market
Disclosure Committee, can also be found in the Committee reports.
The responsibilities
of these roles can be
found on our website
Funding Circle Holdings plc | Annual Report and Accounts 202474
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Composition,
succession and
evaluations
Board succession
As noted under Governance at a Glance on page 67,
there have been a number of changes to the Board during
2024 and up to the date of this report. One of the Board’s
2024 priorities was to refresh its composition to ensure
it had the appropriate skills, experience and knowledge
to support the Company’s execution of its more
simplified business strategy. The Board has established
a Nomination Committee to which it has delegated
responsibility for reviewing the leadership needs of the
business, including Board composition, considering
succession plans for both the Board and ExCo, selecting
and appointing new Directors, having oversight of Board
induction processes and considering the results of the
Board effectiveness reviews.
At the 2024 AGM, Eric Daniels retired from the Board after
an almost eight-year term. Samir Desai CBE also retired
from the Board in October 2024 after 14 years, firstly
as an Executive Director and subsequently as a Non-
Executive Director during his term. In December 2024,
Oliver White resigned as CFO and Executive Director after
a four-year term. Matthew King resigned from the Board
of both Funding Circle Holdings plc and Funding Circle
Ltd on 31 December 2024.
More information on the work of the Nomination
Committee can be found on pages 78 to 81.
Appointments
There were no new Director appointments during
2024. Two new appointments were announced with
effect from 1 January 2025: Tony Nicol, CFO, and Ken
Stannard, independent Non-Executive Director and
Chair Designate. More details on how the Nomination
Committee led these appointment processes are noted
in its Committee Report on pages 78 to 81.
Board composition
The Nomination Committee reviews the structure, size
and composition of the Board to maintain and develop the
robust succession plan for the Board and ExCo. For more
details on the Board’s composition, see Governance at a
glance on page 67.
Board skills
The Nomination Committee uses a skills and experience
matrix to regularly review the expertise of the Board
and its Committees, taking into account the skills and
experience, length of service and time commitment.
The Board’s skills matrix can be found on page 67.
UK Corporate Governance Code (the “Code”)
compliance
As a listed company, the Company applies the
principles and provisions of the Code which can
be found, in full, at www.frc.org.uk. This is the last
year we are reporting against the 2018 Code and
next year, we will report against the 2024 Code.
As part of this Corporate Governance Report,
we have laid out how the Board applies each of
the principles of the Code at Funding Circle. The
Board takes seriously the need for high standards
of governance and aims to implement a robust
corporate governance framework that works for
the Company, enabling it to achieve long-term
sustainable success and its wider objectives. With
this in mind, the Company was compliant with all
the provisions of the Code, except for provisions
11 and 19.
Provision 11 requires that at least half the
Board, excluding the Chair, should be Non-
Executive Directors whom the Board considers
to be independent. During 2024, the Board
was not compliant with this provision as there
were three Non-Independent Directors on the
Board, two of which were large shareholder
representative Directors in addition to the CEO
and CFO also being on the Board. With Eric
Daniels and Samir Desai CBE having resigned
from the Board during 2024, only three of the
eight Board members (excluding the Chair) were
considered to be independent by the end of the
year. One of the Board’s priorities in 2025 will
be to continue to refresh its composition and
increase independence. Please see the Report of
the Nomination Committee on pages 78 to 81 for
additional details.
Provision 19 provides that the Chair should not
remain in post beyond nine years from the date
of their first appointment to the Board. Andrew
Learoyd has served on the Board for more than
nine years. However, as previously announced,
a succession plan has been put in place with Ken
Stannard’s recent appointment on 1 January 2025
as Non-Executive Director and Chair Designate,
with a view to Ken being appointed as Board Chair
upon his election at the 2025 AGM. Further detail
on the Chair’s succession planning process can be
found in the Report of the Nomination Committee
on page 80.
Funding Circle Holdings plc | Annual Report and Accounts 2024 75
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Corporate governance report continued
Board effectiveness review
The Board takes its continuous improvement and development very seriously and, at the end of 2024, conducted a
detailed internal effectiveness review of the performance of the Board, Chair and individual Directors. Topics included
leadership and purpose, composition and division of responsibility, independence, Board meeting progress, Board
development and support, risks and controls oversight, and culture and stakeholder engagement oversight. The
evaluation process is outlined below:
Scope and planning
The Chair and Company
Secretary met to determine the
proposed scope and approach
of the questionnaire to be
circulated for completion.
Obtaining feedback
Tailored questionnaire was
agreed and circulated by online
software to all Directors and
the Company Secretary to
gain feedback on the Board’s
effectiveness.
Analysing and reporting
The results of the questionnaire
were analysed with key themes
summarised in a final report
presented to the Board for
discussion. Actions were
agreed to take forward.
Outcomes
The evaluation concluded that the Board, Chair and Directors continue to be effective. Some areas noted for
improvement, which the Board is committed to addressing in 2025, included:
l continuing to review Board succession plans and performance; and
l reviewing and enhancing processes for Board oversight of people and culture, including mechanisms for
employee engagement.
Progress against actions identified in 2023 effectiveness review
Set out below is the progress during 2024 against actions identified through the 2023 Board effectiveness review:
Action for 2024 Progress
Reviewing the Board agenda programme to ensure the
appropriate deep dive topics are scheduled with the
right frequency.
The Chair circulated the 2024 Board annual planner to
all Directors for feedback on additional deep dive topics.
The Company Secretary then incorporated these topics
into the Board’s annual planner and meeting agendas.
Ensuring all Board members have access to all Board
Committee meetings and materials even if they are not
members of those Committees.
All Non-Executive Directors are now invited to all
Committee meetings and have access to all Committee
materials regardless of whether they are a member of
that Committee.
Encouraging further active shareholder engagement by
management and the Chair.
Management actively engages and offers direct meetings
with shareholders and prospective shareholders at
all half-year and full-year results periods and to gain
feedback on relevant matters. In addition, the Board Chair
and Remuneration Committee Chair, via the Company
Secretary, regularly offers to meet with shareholders to
discuss governance matters such as the Remuneration
Policy review and AGM voting results.
Improving the tracking and reporting on a range of
agreed KPIs and milestones by better building this into
management’s quarterly reporting to the Board.
Quarterly milestone trackers were added to management’s
reporting to the Board and discussed at each meeting.
External evaluation
The Board discussed the value of an externally facilitated evaluation at length including the recommendation in provision
21 of the 2018 Code and the value of an external evaluation from the perspective of stakeholders. The Board decided that
it was not appropriate at this time due to the significant change to the Board’s composition during the year and as the
internal evaluation was rigorous with full engagement and candid responses from Board members. Areas of improvement
were identified which the Board was fully committed to working on in 2025.
Funding Circle Holdings plc | Annual Report and Accounts 202476
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
The Board has delegated to the ARC responsibility
for overseeing the financial and corporate reporting
and internal financial controls of the Company and
its subsidiaries. This includes reviewing the content
of the Annual Report and Accounts and advising the
Board on whether, taken as a whole, it is fair, balanced
and understandable. Details of this process and the
focus of the review and of the ARC’s role, activities
and relationship with the external auditors are on
pages 82 to 87 of the Report of the ARC.
Audit
The Board has formal and transparent procedures in
place to ensure the independence and effectiveness
of the internal and external audit functions, as required
by the Code. An effectiveness review of both the internal
and external audit functions was completed during
the year which included an evaluation of professional
integrity and independence. Further details of the
evaluations can be found in the Report of the ARC on
pages 86 to 87.
The Board delegates responsibility for ensuring the
integrity of the financial and narrative statements to the
ARC. Further detail can be found on pages 82 to 87.
Responsibility for preparing the Annual Report and
Accounts
The Board is responsible for maintaining adequate
accounting records and seeks to ensure compliance
with statutory and regulatory obligations. An explanation
from the Directors about their responsibility for preparing
the financial statements is on page 115 in the Statement
of Directors’ Responsibilities. The Company’s external
auditors explain their responsibilities on pages 121 to 122.
Streamlining governance
With effect from 1 January 2024, the Board approved,
with the recommendation of the Nomination Committee,
the creation of a combined ARC, replacing the old Audit
and Risk & Compliance Committees, exhibiting how
the Board continuously considers the efficacy of its
Committees and its overall governance framework.
Risk management and internal control systems
In accordance with the Code, the Board is required to
monitor the Group’s risk management and internal control
systems on an ongoing basis and carry out a review of
their effectiveness. To discharge this responsibility, the
Board has established frameworks for risk management
and internal control using a “Three Lines of Defence”
model as outlined in the Group’s ERMF and reserves for
itself the setting of the Group’s risk appetite.
Whilst the Board retains ultimate responsibility for the
Group’s systems of internal control and risk management,
it has delegated in-depth monitoring of the establishment
and operation of prudent and effective controls in order
to assess and manage risks associated with the Group’s
operations to the ARC. The ARC also monitors compliance
with the ERMF. Members of the ExCo are responsible
for the application of the ERMF, for implementing and
monitoring the operation of the systems of internal
control and for providing assurances on this to the Board
and its relevant Committees. For further details on the
ERMF and our approach to risk management, please
see page 54.
The Internal Audit function provides an independent and
objective assessment to the ARC on the robustness of
the ERMF and the appropriateness and effectiveness of
internal controls. The ARC provides regular updates to
the Board on the Committee’s review of the Group’s risk
management and internal control systems as discussed
in its Committee meetings, further details of which are
outlined in the Report of the ARC on page 87.
During the year, the Board, supported by the ARC, carried
out a robust assessment of the emerging and principal
risks and uncertainties facing the Group, including
any that would threaten our business model, future
performance, solvency or liquidity. There is an ongoing
process for identifying, evaluating and managing the
principal risks faced by the Company as described in
more detail in the Risk section. The systems have been
in place for the year under review and up to the date of
approval of this Report and they are regularly reviewed
by the ARC.
Audit, risk and
internal control
Funding Circle Holdings plc | Annual Report and Accounts 2024 77
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Members and attendance
Member Meetings Attendance
Andrew Learoyd (Chair) 7/7 100%
Geeta Gopalan 7/7 100%
Helen Beck 7/7 100%
The Committee’s role and key
responsibilities are defined in its
Terms of Reference which can
be found on our website
Andrew Learoyd
Chair
On behalf of the Board, I am pleased to present the
Committee’s Report for the year ended 31 December 2024.
With three Non-Executive Directors (including our Founder,
Samir Desai CBE) and our CFO retiring and new CFO and
Chair recruitment processes being undertaken this year, the
Committee has been very busy with refreshing the Board.
More detail on these changes is provided within this Report.
The Committee met seven times in 2024 which enabled
us to cover all our duties and responsibilities. In this report,
we have provided information on the activities of the
Committee in 2024 as well as the Committee’s work on
Board composition, succession planning, diversity and
Committee effectiveness. Where we have diverted from the
UK Corporate Governance Code 2018, we have provided
a clear explanation as to why this is the best approach for
Funding Circle at this time.
Skills and experience
The Committee maintains a skills and experience matrix
which helps us review the current skills and experience
of the Board and identify any gaps that may need filling.
The skills and experience of the Directors on the Board
were evaluated as part of the annual effectiveness review
and our succession plan for the Board will take into
account the appropriate skills and expertise to match the
Company’s new strategic direction. Details of the Board’s
skills are outlined on page 67.
Board diversity
The Committee is mindful of the importance of ensuring
the Board’s and Committees’ diversity in the broadest
sense. With this in mind, the Board considers the
guidance published by the Parker Review on ethnic
diversity in the boardroom, the FTSE Women Leaders
Review (formerly the Hampton-Alexander Review) on
gender diversity in the boardroom and the requirements
of the Code in relation to composition and succession of
the Board. In February 2024, the Board adopted a Board
Diversity Policy, which outlines our approach to diversity
and inclusion with respect to the Board, the Board’s
Committees, the ExCo and their direct reports, a copy
of which can be found on our website.
2024 Committee activity
l An overwhelming majority of the Committee’s
work during the year related to the extensive
search and recruitment processes for Chair
and NED succession planning (which included
significant additional ad hoc meetings), as well
as leading a rigorous recruitment process for a
CFO replacement.
l Reviewed Committee and Board performance
results and approval of new Board
Diversity Policy.
l Reviewed Director conflicts and NED time
commitment annual review and recommended
Directors to stand for re-election at the AGM.
The Committee’s focus for 2025
l Drive forward the process of continued
succession planning for the Board.
Report of the Nomination Committee
2024 was a significant
year of change to the
Board’s composition.”
Funding Circle Holdings plc | Annual Report and Accounts 202478
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Leadership diversity
DEI is a priority at Funding Circle, which extends across
the Company at all levels. DEI is a key component of our
ESG framework, overseen by our ESG Committee which
works closely with the Committee to support and oversee
the implementation of diversity goals across the Group
including at Board level.
Group diversity statistics can be found in the Strategic
Report on page 20. We are pleased to say that
representation of women in roles held at the ExCo level
along with their direct reports is 43%. The Committee
recognises that there is still work to be done to improve
diversity within the Group and the ESG Committee has
discussed the work being done to improve diversity
across the Group. This extends to our approach and
process to drive diverse recruitment, which includes
diverse candidate and hiring panels, alongside
ensuring DEI remains a core focus for our internal talent
management strategies. Initiatives include a female
empowerment programme, emerging and senior leader
development programmes, and reverse mentoring.
The Company also regularly reviews and is proud to offer
a range of family friendly and flexible working policies
and practices (such as adoption leave, care leave, and
support for parents returning to work).
Board appointments
We announced the appointment of Tony Nicol as successor
to Oliver White, Executive Director and CFO, and the
appointment of Ken Stannard, as Independent Non-
Executive Director and Chair Designate, both effective
from 1 January 2025. The process for the CFO appointment
was led by the Committee. As the Board Chair leads the
Committee, the process for his successor was led by a
Sub-Committee chaired by Geeta Gopalan, our Senior
Independent Director, comprising of Helen Beck, another
Committee member, and the CEO, with additional support
provided by the Chief People Officer and the Company
Secretary. The rest of the Board, including the Board Chair,
provided feedback throughout the process when requested
by the Sub-Committee. Further details on the process for
the appointments are outlined on page 80.
The following comprises our reporting against the FCA’s UK Listing Rules targets and requirements on diversity
and inclusion on company Boards and Executive management. Whilst the Board recognises it does not currently meet
the minimum 40% female representation on the Board, it does highlight that this is offset by two female directors in
senior positions, being CEO and SID roles, which is above the FCA’s requirement. The Board will continue to take into
consideration all diversity requirements in its board succession planning.
Gender representation in the Board and senior management – 31 December 2024
Number of
Board members
Percentage
of the Board
Progress
from
2023
Number of senior
positions on the
Board (CEO,
CFO, SID and
Chair)
Progress
from
2023
Number
in ExCo
Percentage
of ExCo
Progress
from
2023
Men 5 62.5% 2 6 75%
Women 3 37.5% 2 2 25%
Ethnicity representation in the Board and senior management – 31 December 2024
Number of
Board members
Percentage
of the Board
Progress
from
2023
1
Number of senior
positions on the
Board (CEO,
CFO, SID and
Chair)
Progress
from
2023
Number
in ExCo
Percentage
of ExCo
Progress
from
2023
White British
or other White
(including minority-
White groups)
7 87.5% 3 6 75%
Asian/Asian British 1 12.5% 1 — —
Other ethnic group — — — 2 25%
1. The reduction in ethnic representation on the Board is due to Samir Desai CBE resigning as Non-Executive Director in October 2024.
Key
Improving No change Deteriorating
Funding Circle Holdings plc | Annual Report and Accounts 2024 79
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Report of the Nomination Committee continued
Chair Designate appointment process
Stage 1
The Committee reviewed at length the Board’s composition, skills, experience and diversity and agreed on what would be required
by a new Chair to complement both the existing and near-term Board composition. A Sub-Committee was appointed.
Stage 2
The Sub-Committee reviewed and approved an outline brief and role specification and appointed Heidrick & Struggles to identify
suitable candidates from a diverse pool of individuals in line with the Board Diversity Policy. The Sub-Committee, taking input from
the wider Committee and other key stakeholders (including the CEO), determined a short list of candidates for outreach.
Stage 3
The short-listed candidates met with the respective Sub-Committee, with the preferred candidates going on to meet the remaining
members of the Board.
Stage 4
The Sub-Committee agreed the preferred candidate based on the range of skills, experience and knowledge that complemented
those of the existing Board members and recommended the same to the Board.
Stage 5
The Board considered the candidates on their merits and approved the appointment of Ken Stannard as a Non-Executive Director and Chair
Designate with effect from 1 January 2025.
1. Heidrick & Struggles is an independent executive search and global leadership advisory business with no other connection to the Company or any individual
Director. Heidrick & Struggles is accredited by the Enhanced Voluntary Code of Conduct for Executive Firms for its support to FTSE 350 Boards in increasing
gender diversity. It is also a partner with organisations like the Paradigm for Parity
®
coalition and the 30% Club’s Future Female Directors programme to help
close the corporate leadership gender gap and promote gender parity across all levels of organisations. Specific guidance was given to Heidrick & Struggles to
ensure diversity within the candidate long and short lists whilst identifying candidates who had the relevant skills and experience required on the Board.
CFO appointment process
Stage 1
The Committee reviewed and approved an outline brief and role specification for the CFO role. The Committee also reviewed the
existing ExCo succession plan reviewed by the Board which identified Tony Nicol as a potential successor to Oliver White as CFO.
Stage 2
The Committee appointed Heidrick & Struggles to carry out an external benchmarking exercise and identified external candidates
from a diverse pool of individuals in order to compare against internal candidate options.
Stage 3
The internal candidate went through a thorough interview process with the members of the Committee and the CEO.
Stage 4
The Committee agreed that the internal candidate was the preferred candidate for the position, based on his range of skills,
experience, knowledge and strong culture fit for the Executive role, already being a long-standing senior leader in the organisation
who had built strong stakeholder relationships within the Company and the Board, and recommended his appointment to the Board.
Stage 5
The Board considered the candidate on his merits and approved the appointment of Tony Nicol as a Executive Director and CFO with
effect from 1 January 2025.
Board appointments continued
Funding Circle Holdings plc | Annual Report and Accounts 202480
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Board induction process
Director induction programmes to the Board are
facilitated by the Company Secretarial team and overseen
by the Committee. All new Directors are provided with full
access to our secure resource centre within our secure
Board software, which provides induction materials such
as Group policies, structure charts, Terms of Reference,
strategy material, investor relations coverage, and past
Board and Committee meeting papers and minutes.
For Ken Stannard’s induction, in addition to the above,
Ken had meetings with members of the ExCo, key
external corporate advisers, heads of key Group
functions, and the external auditors. Ken also attended an
introductory breakfast meeting with the Group’s Senior
Leadership team. Ken also met with some shareholders
upon request prior to the 2025 AGM.
As Tony Nicol was already on the Senior Leadership team
prior to being appointed as CFO, he had already built
strong relationships with the ExCo, Senior Leadership
team, external advisers and the external auditors. Due
to Tony’s existing investor relations remit, he was also
familiar with major shareholders. As this was Tony’s first
Board-level Executive role with a listed Company, he was
provided with tailored training in relation to Directors’
duties (e.g. s.172) and the Code. Tony has also previously
completed Deloitte’s CFO programme.
Board and Committee effectiveness
The Committee reviewed the 2024 Board effectiveness
review results and discussed feedback that related
to the Committee’s remit. More detail on the Board’s
effectiveness review is on page 76.
Progress on actions from 2023 Committee
effectiveness review
Feedback from the 2023 effectiveness review noted
that the Committee needed to focus more on Board
succession planning and in particular the Chair
succession planning and this was actioned in the year
with seven meetings taking place during 2024.
2024 Committee effectiveness review
The Company Secretarial team facilitated an
effectiveness review of the Committee at the end of
2024. A comprehensive questionnaire was distributed
to all the Committee members. All members of the
Committee, the Chief People Officer and the Company
Secretary responded to the questionnaire and engaged
with the evaluation process.
Overall, scores were good across all elements of the
questionnaire of the Committee’s effectiveness. There
was consistent commentary amongst all members noting
that Board and ExCo succession planning should remain
a key priority for 2025.
Re-election
I will not be standing for re-election at the 2025 AGM as I
am resigning as Board Chair at the AGM. The Committee
has recommended to the Board that the other remaining
Directors stand for election or re-election at the
forthcoming AGM.
Senior management succession
The Committee’s responsibilities include making
recommendations to the Board for orderly succession
for appointments to senior management and keeping
the Executive leadership needs of the Company and
its Group under review, with a view to ensuring they
continue to compete effectively in the market.
Board succession, composition and the year ahead
There have been several changes to our Board since
the Annual General Meeting in 2024 which are noted in
more detail within the Corporate Governance Report.
Whilst the Board is not currently majority independent,
the Committee has discussed in depth the composition
of the Board in respect of independence and tenure and
in respect of aligning the Board’s composition with the
Company’s needs which will remain a key focus for the
Committee during 2025.
Andrew Learoyd
Chair of the Nomination Committee
6 March 2025
Funding Circle Holdings plc | Annual Report and Accounts 2024 81
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Report of the Audit and Risk Committee
Members and attendance
Member Meetings Attendance
Geeta Gopalan (Chair) 5/5 100%
Matthew King 5/5 100%
Helen Beck 5/5 100%
Eric Daniels
1
(resigned on 15 May 2024) 1/2 50%
1. Eric Daniels only attended one meeting during the year as he resigned
at the AGM in May 2024 and he missed one other Committee meeting
due to a meeting schedule conflict that was unavoidable.
The Committee’s role and key
responsibilities are defined in its
Terms of Reference which can be
found on our website
Geeta Gopalan
Chair of the Audit and
Risk Committee
l Receiving updates on emerging risks and principal
risks including strategic, funding and balance sheet,
credit, operational, regulatory and reputational, and
technology risks (including GenAI).
l Receiving updates and reviewing and approving the
climate risk management framework.
l Applying scrutiny to information security and technology
risk and receiving updates on their mitigation plans.
l Reviewing risk assessments associated with new
products in FlexiPay and Term Loans, including the
launch of the Cashback credit card.
l Approving amendments to the Group risk appetite
and Enterprise Risk Management Framework which
included the elevation of technology risk as a principal
risk (moving it from a level 1 risk under operational risk).
2024 key activities
Audit
l Reviewing the integrity of the half-year and full-year
financial statements, ensuring they were fair, balanced
and understandable, considering significant accounting
judgements, estimates and disclosures, especially
in relation to the sale of the US business, the impact
of the macro economic environment and the Group’s
ability to continue as a going concern, together with its
viability disclosures.
l Challenging, monitoring and evaluating the
effectiveness of both financial and non-financial
controls in the Group.
l Completing in-depth evaluations on the effectiveness
of the Internal Audit team, external auditors and the
Committee itself.
l Reviewing and enhancing the Group’s whistleblowing
processes to include a third party anonymous
reporting line.
l Appointing the new Director of Internal Audit.
In 2024, we streamlined the Board’s
audit and risk oversight to support a
more holistic view of the effectiveness
of the Group’s risk and internal
controls environment.”
On behalf of the Board, I am pleased to present the
inaugural Report of the newly combined Audit and Risk
Committee for the year ended 31 December 2024. In
2024, we streamlined the Board’s audit and risk oversight
to support a more holistic view of the effectiveness of the
Group’s risk and internal controls environment.
2024 key activities
Risk
l Overseeing our approach to loan originations and
agreeing to changes in credit strategy to enable
fast and effective change in an increasingly volatile
environment. Portfolios have been generally resilient
and within target despite the challenging environment.
l Receiving regular updates and closely monitoring the
external environment to look ahead at indicators of
major change and assessing risk in relation to inflation
and rising interest rates, and their impacts on SME
credit standing.
Funding Circle Holdings plc | Annual Report and Accounts 202482
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
2025 key priorities
Risk
l Continue to review the Group’s key and emerging risks,
especially technology and cyber risks, paying close
attention to the macro environment and fraud risk.
l Greater focus on people and culture risk.
l As the Group continues to embrace new products and
increased automation, the Committee will monitor the
associated risks, both prior to and post-implementation,
as they scale as well as the execution risk as the
business moves from a focus on one product to a
number of different products.
l Continue to review the management of balance sheet
exposures and the credit risk position in relation to our
financial objectives under different outlook scenarios.
l Continue to review progress on the climate risk
management framework.
l Oversee GenAI initiatives from an internal controls and
risk perspective.
2025 key priorities
Audit
l Continue to assess accounting judgements and estimates,
particularly in relation to a provision for expected credit
losses on FlexiPay lines of credit, the evolution and
improvement of the Group’s credit provision models,
and new product launches as they mature and grow
in volume.
l Continue to review the Group’s internal financial
controls and internal control systems to ensure they
continue to develop in line with the Group’s business
with a particular focus on the end-to-end processes
and the ongoing development of the controls of new
products and new features.
l Oversight of the implementation of the updated 2024
Code for audit and risk requirements.
Committee composition, skills and experience
The membership of the Committee complies with
provision 24 of the Code, requiring a minimum
membership of two Independent Non-Executive
Directors not including the Chair of the Board.
All members of the Committee have relevant financial
experience across banking and financial services,
demonstrating competency relevant to the sector
in which Funding Circle operates, including the
Committee Chair who is a chartered accountant.
The Committee meets privately to discuss matters with
the external and internal auditors, who regularly attend
all meetings, without management present.
Significant matters considered in relation to the financial statements
The Committee assessed the quality and appropriateness of, and adherence to, the Group’s accounting policies and
principles. It reviewed whether the accounting estimates and judgements made by management were appropriate.
The significant matters and accounting judgements considered by the Committee during the year are set out below.
Reporting issue Committee action
Going concern and viability
The period over which the Directors have
determined the viability assessment is three years.
Going concern is assessed annually based
on detailed cash flow forecasts for the next
15 months including a severe but plausible
downside scenario.
Inflationary pressures have eased but remained
prominent during the year, with the impact of
the UK government budget and increased global
instability also weighing on SMEs. These factors
have been considered in the above assessments.
The Committee reviewed reports from management that set out
its view on both the shorter-term going concern and longer-term
viability of the Group. These included:
l reviewing the Group’s principal risks as set out on pages 55 to 62;
l assessing and reviewing the adherence to the risk appetite
set by the Committee to track the Group’s capital, liquidity and
exposures of its funding products;
l reviewing the Group’s short- and medium-term plan, cash,
capital and liquidity;
l reviewing the outcomes of stress testing after applying a severe
but plausible scenario aligned to the principal risks; and
l reviewing the risk, going concern and viability disclosures for
clarity on scenarios, uncertainties, sensitivities and management
actions considering macro economic risks in particular.
Having challenged and considered the outcomes of management’s
assessment, the Committee recommended the Viability Statement
to the Board for approval, concluded the Group remains a going
concern and considered that related disclosures were sufficiently
clear and transparent.
Funding Circle Holdings plc | Annual Report and Accounts 2024 83
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Reporting issue Committee action
Sale of US business and disclosure as a
discontinued operation
The Group sold its US business on 1 July 2024 to
iBusiness Funding, LLC for consideration of £32.6
million. A gain on sale at the Group level of £9.8
million along with £8.7 million reclassification
of foreign currency translation reserve. At the
Parent Company level a gain of £25.9 million,
was recognised when the US business was
deconsolidated.
The Committee received and reviewed reports and draft
disclosures from management related to:
l the proposed disclosure of the US business as a discontinued
operation and re-presentation of the comparative statement
of comprehensive income and related notes on this basis;
l the treatment of the US business as a disposal group at the
half-year reporting at 30 June 2024, and presentation of the
balance sheet and related notes on this basis; and
l the calculation and treatment of the gain on disposal inclusive
of recycling of the foreign currency translation reserve.
Having reviewed the disclosures and treatment the Committee
concluded that the application was correct and the disclosure
was clear and transparent in both the Group and standalone
entity accounts.
Expected credit loss impairment of FlexiPay
The Group holds FlexiPay lines of credit on its
balance sheet. These lines of credit are held at
amortised cost net of IFRS 9 expected credit
loss impairment allowance. As the business has
grown and the product features have developed,
there is more historic data available and more
complexity for use in estimating the allowance.
The allowance is sensitive to assumptions related
to the probability of default derived from macro
economic assumptions.
The Committee received and reviewed the assumptions and
methodologies used to determine the expected credit loss
together with the level of sensitivity to those assumptions and
considered whether these appropriately reflected risks in the
portfolio and development of the product in the year.
The Committee also considered the views of the external auditors
on the methodology and the assumptions, including comparing
the results to the external auditors’ independent estimation of
the allowance. The Committee considered the disclosures within
the Annual Report and after due challenge concluded that the
valuations were reasonable and the disclosures were appropriate.
Deferred tax recognition
The UK business is forecast to be in a taxable
profit position for the year ended 31 December
2025, and consideration was given as to whether
a deferred tax asset should be recognised as at 31
December 2024.
It was concluded that a deferred tax asset should
not be recognised as there was not sufficient
certainty regarding the probability of sustained
future taxable profits and disclosure was made
within the critical accounting judgements note.
The Committee reviewed a paper from management which set
out both positive and negative evidence related to the decision
to recognise a deferred tax asset or not. The Committee:
l considered the Group’s position in the context of ESMA
guidance on whether there is sufficient compelling evidence
to consider whether it is probable there will be future taxable
profits; and
l considered if not recognising a deferred tax asset now, what
evidence would be considered compelling in future that might
result in the recognition of a deferred tax asset at a later date.
It was determined that the decision to not recognise a deferred tax
asset at 31 December 2024 was sound, and that indicators that
may lead to a different outcome in future may include the delivery
of sustained taxable profit over a period of time and ongoing
market expectation of taxable profits.
The disclosure within the critical accounting judgements note
was reviewed and considered to be clear and transparent.
Exceptional items
The Group has a defined accounting policy for the
treatment and presentation of non-recurring and
material items as exceptional. These exceptional
items are also presented in a columnar fashion
on the consolidated statement of comprehensive
income in order to increase transparency and
understanding for readers.
The cost efficiency programme undertaken by
the UK totalling £2.6 million, related impairment of
intangible assets of £0.3 million and the gain on
sale of the US business of £9.8 million have been
disclosed as exceptional items.
The Committee received papers from management setting
out the analysis of the exceptional items and the rationale for
their inclusion.
The Committee received the views of the external auditors on
the items that management had included within these costs.
It noted that the disclosure as exceptional was consistent with
the Group’s accounting policy and with prior year presentations,
and concluded that the amounts and this presentation were
appropriate.
Report of the Audit and Risk Committee continued
Significant matters considered in relation to the financial statements continued
Funding Circle Holdings plc | Annual Report and Accounts 202484
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Reporting issue Committee action
Fair, balanced and understandable reporting and
alternative performance measures (“APMs”)
The Board is required to report as to whether the
contents of the 2024 Annual Report and Accounts,
when taken as a whole, are fair, balanced and
understandable. The Group uses APMs in its
reporting of adjusted EBITDA for the Group. These
measures are used to provide insight into the
underlying performance of the business. They also
provide a close approximation to cash generation
which is key to the business. These measures are
defined within the segmental information note on
pages 144 and 193.
At the request of the Board, the Committee has assessed the
information contained within the Annual Report. This assessment
included discussions with management on the underlying
financial processes, and confirmation from the management
team of its review of the Annual Report being fair, balanced and
understandable. The Committee also discussed the contents of
the Annual Report with the external auditors.
In addition, the Committee also considered the use of various
APMs and other measures used by the Group and agreed that
these supported the understanding of the financial performance of
the Group and facilitated a better understanding of the business.
The Committee was satisfied that there were sufficient disclosures
of the same with the appropriate balance and reconciliation
between these and statutory measures in the accounts.
Having considered all of the available information including
previously published information about the business and press
releases through the year the Committee has concluded that, in its
judgement, the 2024 Annual Report and Accounts, when taken as
a whole, is fair, balanced and understandable.
Risk management and internal controls
With effect from 1 January 2024, we combined the Audit
Committee and the Risk & Compliance Committee into
one Committee and reviewed the annual cycle of work
to allow the Committee to carry out its role of monitoring
and reviewing risk for the Group, including the nature
and extent of principal and emerging risks against an
uncertain macro environment. The Committee is also
responsible for monitoring the Group’s compliance with
the ERMF, which is detailed further on page 54 of the
Strategic Report.
In addition to formal meetings, the Committee also
received regular reports and updates on overall credit
performance.
The Committee is responsible for supporting the
Board in its robust assessment of the principal and
emerging risks of the Group. The CRO reports at each
risk meeting on the top of mind principal and emerging
risks. In addition, ExCo members liaise swiftly with
the ARC when identifying an emerging risk requiring
immediate attention. The Committee considers these
and other risks that may impact the Group’s strategy and
operations and assesses its aggregated risk profile. For
in-depth information on the Group’s approach to risk and
identification of principal and emerging risks for 2024,
please refer to the Strategic Report on pages 55 to 62.
Review of effectiveness of internal controls and risk
management systems
During the year, to bring greater transparency to
the assurance the Committee receives and to gain
greater comfort over the Group’s management of risks,
monitoring of internal controls and the accuracy of
reporting, the Committee reviewed:
l the Risk Taxonomy and the cartography of risk owners;
l an annual risk and controls assessment prepared by the
enterprise risk management team;
l business line risk assessments directly from the MDs and
the CTO to foster a strong culture of risk management and
clear tone from the top across the first line;
l the assessment of the internal controls system, and
monitoring of management actions arising from the
assessment, and focus on residual risks requiring
further mitigation;
l the audit plan and actions taken following audit
recommendations;
l annually, the financial crime risk assessments, including
fraud risk and AML/CTF risk;
l whistleblowing reports and confirmation of testing;
l specific risk mitigation actions in relation to information
security risk and data risk;
l UK credit environment and adequacy of our approach
to credit assessment in all its dimensions (credit
validation, pricing, ongoing loan management); and
l the performance of all our credit portfolios including
analysis of historical trends and forecast of expected
future performance.
During the year, there was also an ad hoc deep dive
on credit risk held between the Committee Chair and
the business CRO and monthly communications were
distributed by the CRO to the Committee about the most
recent credit performance.
Additionally, throughout the year, the Committee has
monitored and reviewed the adequacy and effectiveness
of the Group’s internal controls, by receiving, discussing,
and challenging regular reports from management,
internal audit and external audit on matters in relation to
control effectiveness, monitoring and testing.
Based on its activities, the Committee confirmed to the
Board its assessment that the Group’s internal controls
and risk management systems were sufficiently robust
and operating effectively.
Funding Circle Holdings plc | Annual Report and Accounts 2024 85
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
External audit
Auditor independence
External auditors: PwC
Length of tenure: 10 years (appointed in 2015)
Lead audit partner: Heather Varley
Lead audit partner tenure: 1 year
Total audit fees payable to
auditors in the year: £925,615
The Committee monitors the objectivity, independence
and effectiveness of the external auditors. The Company
is mindful of the provisions of the Code, best practice,
the Competition and Market Authority Audit Order 2014
and audit legislation in particular with regard to audit firm
rotation and the provision of non-audit services.
The Committee operates a policy for the tender of
external audit services. This policy provides that, in
accordance with applicable law and regulation, the
Company will re-tender the external audit at least every
ten years since IPO and will change the external auditors
at least every 20 years. PwC was first appointed in 2015
so, in 2023, the Committee conducted a competitive
tender of external audit services for FY 2024 and,
following a rigorous process, PwC was successful.
The auditors’ partner was rotated during 2024 from
Nick Morrison to Heather Varley. The Committee met
with PwC during the year to assess the potential new
audit engagement partner and the Committee endorsed
Heather Varley as being a suitable replacement for Nick
Morrison as new audit partner.
The Committee regularly reviews the objectivity and
independence of the external auditors and has concluded
this is safeguarded by:
l obtaining assurances from the external auditors that
adequate policies and procedures exist within their firm
to ensure that the firm and employees are independent
of the Group by reason of family, finance, employment,
investment and business relationship (other than in the
normal course of business);
l enforcing a policy of reviewing all cases where it is
proposed that a former employee of the external
auditors be employed by the Group in a senior
management position or at Board level;
l monitoring the external auditors’ compliance with
applicable UK ethical guidance on the rotation of audit
partners; and
l approving non-audit services prior to being undertaken
by the external auditors.
The engagement of the external audit firm to provide
non-audit services to the Group can impact on the
independence assessment and the Company has,
therefore, adopted a policy which requires Committee
approval for non-audit services. This policy is in line with
the FRC’s Revised Ethical Standard 2019 and gives the
Chair of the Committee delegated authority from the
Committee to approve individual non-audit services items
of up to £50,000 per service.
All fees paid to PwC for non-audit services have been
approved (in accordance with the non-audit services
policy), with a summary of all non-audit services being
provided at each Committee meeting.
External audit fees: Non-audit and audit-related
services
Description
2024
£000
2023
£000
Interim review of half-year
results announcement 141.7 137.7
CASS reporting 143.2 140.4
ISAE 3402 controls assurance 127.5 134.4
Other 1.4 1.4
Total 413.8 413.9
The Committee concluded that it was in the best interests
of the Group to purchase these services from PwC on
the basis that it was independent and was considered
to be the right provider for the services required (or, in
some cases, they were required to be performed by the
external auditors).
PwC are prohibited from providing certain non-
audit services to safeguard auditor objectivity and
independence, including, but not limited to, internal audit
work, valuations work and tax-related work.
PwC has confirmed to the Committee that it remained
independent during the year.
Audit performance and effectiveness
The quality, performance and effectiveness of the
external auditors is reviewed annually by the Committee
through an effectiveness questionnaire distributed to
management and Committee members for completion.
This covers: the quality of robust challenge provided by
the audit team; an evaluation of the knowledge and skills
of the external audit team; the accessibility of the lead
audit partner; independence and objectivity; openness,
integrity and professionalism; the quality of reporting;
the audit plan; communication between external auditors
and the Committee; and the audit team’s robustness
and constructive challenge during its engagement with
management. In FY 2024, PwC continued to receive
positive feedback.
The external auditors challenged management over the
various scenarios that they had modelled, the level of
stress testing in the models and the impact that this
would have on the ability of the Group to continue as a
going concern. There was also robust challenge around
the methodology and assumptions utilised in the FlexiPay
lines of credit expected credit loss impairment allowance,
the fair value of loans on balance sheet and the
assessment of indicators of impairment and consideration
of impairment risk related to the Parent Company
investment in subsidiaries.
Report of the Audit and Risk Committee continued
Funding Circle Holdings plc | Annual Report and Accounts 202486
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Internal Audit
The Committee receives updates on the work of the
Internal Audit team at each meeting, including a periodic
assessment of the Group’s risk and control framework.
The Committee considered, challenged, approved,
and monitored the Internal Audit plan. Throughout
the year, the plan was regularly assessed to ensure
it remained focused on the Group’s key risks and
priorities. All proposed audit plan adjustments were
considered, challenged, and approved by the Committee.
Areas assessed by the Internal Audit team during
2024 included:
l technology strategy setup and outcomes;
l recoveries distribution in multiple defaulted loans;
l GGS readiness assessment;
l client money payment platform, operations
and controls;
l FlexiPay billing and card transactions (report
finalised in 2025);
l Marketplace conduct and lending partnerships (report
finalised in 2025);
l enterprise data governance; and
l cyber security strategy and risk management approach.
Following business restructuring and internal promotion,
Protim Banerjee was appointed as the new Director
of Internal Audit with effect from 1 July 2024. This
appointment was announced following a rigorous
recruitment process with candidates which included
several interviews with the Committee Chair and other
members of the Committee and ExCo.
The Internal Audit plan for 2025 was approved by the
Committee in November 2024 and aligns to areas of
highest inherent risk and strategic, operational and
regulatory priority, including:
l FlexiPay – third party management and reliance on
specific suppliers;
l financial crime and underwriting approach across
multiple products;
l FlexiPay – credit exposure monitoring and
management;
l technology performance;
l FY 2025 new Term Loans products;
l marketing effectiveness (carry over from the FY 2024
IA plan); and
l enterprise-wide product development methodology
(carry over from the FY 2024 IA plan).
The team also continued to validate ongoing open
issues e.g. business resilience, end user computing and
collection, recoveries and litigation processes.
Internal Audit effectiveness review
An effectiveness review was conducted by the
Committee to evaluate the performance of the Internal
Audit team. The outcomes of the evaluation overall
were good with high scores demonstrating that the
Internal Audit team remained independent, objective
and effective, with sufficient resources available to
provide the necessary assurance across the Group.
There were a small number of areas suggested for further
enhancement that will be appropriately progressed
during 2025.
Whistleblowing
The Company takes whistleblowing very seriously and
wants all employees to feel able to raise concerns when
they arise. This is emphasised in the Code of Conduct for
all employees which is reviewed annually. The Committee
reviewed the adequacy and security of the Group’s
whistleblowing arrangements, which included regular
whistleblowing updates, and it also provided reports to
the Board where appropriate.
As part of the Committee’s commitment to ensuring
the whistleblowing process and handling of potential
incidents are of the highest standards, the Committee
reviewed a recommendation by management to introduce
a third party anonymous reporting option for employees
under the Group’s Whistleblowing Policy. This additional
line of reporting, together with the rest of the Group’s
whistleblowing processes, was communicated to
employees in both the Company’s news bulletin and at
a bi-weekly All Hands meeting. There were no incidents
reported in 2024.
Committee effectiveness
During the year, a review was undertaken of the
effectiveness of the Audit and Risk Committee. Overall,
the results of the evaluation were positive. Feedback
on the first annual meeting cycle of the new combined
Committee was positive and members generally felt that
the oversight of the effectiveness of the Group’s risk and
internal controls was more aligned and that a framework
of prudent and effective controls was in place which
enabled risk to be assessed and managed appropriately.
The Committee agreed that its composition should be
reviewed in 2025 considering the recent Board changes
and that the agenda would have more focus on emerging
and strategic risks.
Subsidiary audit and risk governance
The Group’s main operating subsidiary, Funding Circle
Ltd (“FCL”), maintained its own Audit and Risk Committee
during 2024, which was chaired by the Chair of the
FCL Board, Matthew King, until his departure from the
Board on 31 December 2024. With the changes in the
business in 2024 and reflecting on the fact that the
main regulated activity by FCL is now a closed product,
the decision has been taken that FCL would no longer
have a separate Audit and Risk Committee and that
FCL matters relating to audit and risk would instead be
covered by this Committee. The regulated FCL Board will
continue to meet as a separate Board, with the Chair of the
Funding Circle Holdings Board as a member, and with a
newly agreed schedule of matters reserved for decisions
including approval of the CASS audit and the FCL Annual
Report and Accounts.
Geeta Gopalan
Chair of the Audit and Risk Committee
6 March 2025
Funding Circle Holdings plc | Annual Report and Accounts 2024 87
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
On behalf of the Board, I am pleased to present
the ESG Committee’s report for the year ended
31 December 2024.
The Committee met twice this year, in accordance with
its updated Terms of Reference. In addition to formal
meetings, the Committee also received quarterly reports
on progress of ESG activities. The Committee was
pleased that the majority of the 2024 ESG framework
goals were completed to its satisfaction, and is
comfortable with the level of ambition set for 2025.
In 2024, the Company made good progress in delivering
against its ESG objectives, taking into consideration
changes in the business, including the sale of the US
operations. We carried out benchmarking of our activities
and reviewed our ambition statements for each of our key
pillars – environmental, social impact, DEI and governance
– to ensure they remain in line with our vision and broader
sustainability developments.
For more detailed information on the Group’s ESG
activities and goals, and TCFD and Climate disclosures,
please see the Environment, Social and Governance
section of our Strategic Report from page 24 and the
Climate and Environment section from page 28.
Report of the ESG Committee
Members and attendance
Member Meetings Attendance
Andrew Learoyd (Chair) 2/2 100%
Matthew King 2/2 100%
Neil Rimer 1/2 50%
Helen Beck 2/2 100%
The Committee’s role
and key responsibilities
are defined in its Terms
of Reference which can
be found on our website
Andrew Learoyd
Chair of the ESG Committee
In 2024, the Company made
good progress in delivering
against its ESG objectives.”
Funding Circle Holdings plc | Annual Report and Accounts 202488
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Diversity, equity and inclusion
On DEI and social impact, the Committee continued to
be impressed with the sustained level of engagement of
the various employee “Circler groups”. This was brought
to life in particular at the CircleIN event in October of
last year, spotlighting the vibrant culture and values at
Funding Circle.
In 2024, we were pleased to see relatively stable
engagement and continued strong inclusion and
belonging results across our key DEI metrics. While we
were disappointed to see a drop in our “recommend”
score, we recognise it has been a significant year of
organisational change for Circlers, who throughout have
demonstrated their continued resilience and commitment
to our business. In particular, we were delighted and
proud to see Circlers recognised externally for their
contributions to the DEI agenda.
In 2025, we will report a higher gender pay gap ratio
compared to our lowest ever reported in 2024. The
Committee continues to focus on diversity at senior
levels of the Company and continues to challenge senior
management to identify where improvements can be
made to demonstrate progress at these levels.
Social impact
The Company is a participant of the United Nations
Global Compact, and in 2024 we published our Human
Rights Statement as planned.
We were pleased to renew our partnerships with Hatch
to support underserved social entrepreneurs, and with
Thrive Mental Wellbeing to support the mental health
of SME owners and their employees in the UK. It was
encouraging to see sustained Circler volunteering, with
171 impact days used in 2024 across a number of great
social and environmental causes.
Climate and the environment
The Company successfully completed independent
third party verification (ISO 14064-1) of its 2023 GHG
emissions data for all activities under its operational
control for the first time. During the year we evolved
our interim net zero targets, reflecting a deepening of
our transition planning efforts, as well as the sale of our
US business.
We were pleased to renew our support for Earthwatch’s
Tiny Forest UK-wide initiative, contributing to the
wellbeing of ecologically deprived areas.
We appreciate the potential challenges and opportunities
that a transition to a lower-carbon future brings for the
Company, its customers and other stakeholders. We
continued to engage on these topics through industry
forums and we look forward to continued progress, and
understanding of our financed emissions data.
Governance and risk management
The Committee is pleased with the progress made
against our roadmap this year. We developed and
approved our Climate Risk Management Framework,
and our disclosures are consistent with the TCFD
recommendations.
Matthew King continued his role as sponsor for climate-
related activities in 2024. Following his resignation
from the Board, we will continue to consider ways of
maintaining Board-level expertise on ESG topics. Helen
Beck continued with her role as Workforce Engagement
Non-Executive Director and engaged with Circlers across
the Group during the year through an employee focus
group. This provided an open forum to gain Circler insight
on the Group’s culture, recent changes to the Group’s
strategic direction and other issues of importance to
Circlers, which Helen then fed back to the Board.
2024 Committee effectiveness review
The Committee completed an internal effectiveness
review for 2024. Overall, the results of the evaluation
were positive. The questionnaire addressed the
composition and set-up of the Committee, the frequency
of meetings, the timeliness and quality of the papers, the
work of the Committee and whether it receives enough
information to feel confident about its oversight role.
Key activities in 2025
In 2025 we will continue to make progress against
our DEI goals to support a diverse and inclusive
organisational culture. We will focus on progressing our
net zero targets, while investing in BVCM activities that
contribute to environmental and societal benefits. As
sustainability regulation evolves, we will work towards
preparing for IFRS S1 and S2, and understanding how our
efforts align to transition planning guidance. Our detailed
goals and roadmap for 2025 are outlined in the ESG
section on page 25.
Andrew Learoyd
Chair of the ESG Committee
6 March 2025
Funding Circle Holdings plc | Annual Report and Accounts 2024 89
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Directors’ remuneration report
Members and attendance
Member Meetings Attendance
Helen Beck (Chair) 6/6 100%
Andrew Learoyd 6/6 100%
Matthew King 6/6 100%
The Committee’s role and key
responsibilities are defined in its
Terms of Reference which can be
found on our website
Helen Beck
Chair of the
Remuneration Committee
the agreed targets was therefore 85.4% of maximum.
The Committee considers this an appropriate reflection
of the overall performance delivered for stakeholders,
and no discretion was applied.
The 2022 restricted share awards granted to Lisa Jacobs
and Oliver White were a fixed number of shares (determined
at the beginning of the Policy period, in 2021) and represented
78% and 58% of salary respectively, a reduction of
approximately 42% on the typical Policy levels (being
133% of salary for the CEO and 100% of salary for the
CFO). The Committee assessed performance over the
vesting period and determined that the awards will vest
in full on 24 March 2025. Further information is set out
on page 105.
During the year, the CEO and CFO were granted restricted
share awards at the level of 115% and 85% of salary,
respectively. As indicated in last year’s report, the Committee
granted these awards below the respective Policy maxima
(133% and 100% of salary) in consideration of business
performance and share price at the time of award.
CFO transition
As announced in May 2024, Oliver White stood down
from his role as CFO at the end of the year, following a
successful transition period. The Committee determined
that Oliver would be treated as a good leaver, and as
such his unvested Restricted Share awards will be
time-prorated and vest on their original vesting dates,
subject to the relevant underpins. Oliver remained
eligible for a 2024 bonus having been in office for the
full financial year. The bonus outcome is as described
above and will be paid fully in cash in line with our policy.
He will not receive any other payments linked to his exit.
Further information is set out on page 108.
Tony Nicol, previously our Director of Finance and
Investor Relations, succeeded Oliver White as Chief
Financial Officer on 1 January 2025.
Remuneration Policy review
Following strategic decisions made in 2024 to focus
on a simple, leaner, and profitable UK business the
Committee determined it was appropriate to propose a
new Remuneration Policy for approval at the 2025 AGM.
The new Policy is designed to support our evolving
business strategy and new medium-term plan, will place
a strong emphasis on performance-related awards, and
will be focused on delivering against our financial goals
as a sustainable, profitable, growth business. To achieve
this, a performance share plan (the “FC PSP”) will replace
restricted shares, the current long-term incentive. Under
the proposed Policy, around 70% of the CEO’s total
remuneration will be performance-based (compared to
around 20% under the current policy). We believe this
creates greater alignment between Executive Directors
and shareholders, and incentivises the ongoing creation
of long-term value, building on progress made in 2024.
We conducted a detailed consultation with our largest
shareholders, covering over 80% of our issued share
capital, and we were grateful for all of the feedback
received which helped shape the final Policy design,
including the approach to salary increases, selection
of appropriate performance measures and overall
On behalf of the Board, I am pleased to present the
Directors’ Remuneration Report for the year ended
31 December 2024.
2024 was a significant year for Funding Circle. Good
progress was made against each of our strategic pillars
as the business successfully exceeded our financial
and strategic goals, with profit ahead of expectations
for the year (see pages 44 to 50 for more information
on business performance). The team demonstrated
resilience and focus, executing on multiple strategic
goals effectively, creating a simple UK-focused business
to serve our customers. This was achieved during a
year where Funding Circle completed the sale of the
US business, recognising a £10 million gain on the sale.
Executive Director Remuneration for 2024
For the 2024 annual bonus, the weighting on financial
targets was 70% (split equally between Group Revenue
and Group PBT) and the remaining 30% was on strategic/
non-financial metrics. As described in more detail on
pages 103 to 104, the outcome for Group Revenue was
above target and for Group PBT (before exceptionals)
was near the maximum. The Committee assessed the
strategic/non-financial goals to have been exceeded.
The overall outcome of the bonus assessment against
CORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 202490
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
remuneration structure. Under the new Policy, Executive
Directors will remain eligible for an annual bonus, with
maximum opportunities of 150% of salary for the CEO and
100% of salary for the CFO. For the FC PSP, the maximum
award size under the Policy will be 350% of salary, with
typical awards being 350% and 250% of salary for the
CEO and CFO respectively. The Committee considered
the overall quantum for Executive Directors holistically,
taking into consideration the stretching nature of our
ambitious strategy, the need to retain and incentivise
high calibre individuals, alongside relevant market data
for companies of a similar size (those at the top of the
FTSE SmallCap – see page 93 for more details). Executive
Directors will only receive the maximum vesting outcomes
under the FC PSP for achieving exceptional performance.
The proposed Remuneration Policy is designed to provide
Executive Directors with a total remuneration package
which is market competitive but more heavily weighted
towards being long-term, share-based and subject to
stretching performance targets, which we believe reflects
our culture and philosophy, and our desire to incentivise
long-term sustainable growth.
To ensure further alignment with shareholders the CEO
shareholding guidelines will be increased to 250% of
salary, for both in-post and post-exit purposes. For the
annual bonus up to 40% of any bonus earned will be
deferred into shares for three years. However, in line
with developing market practice, this may be decreased
by the Committee if the Executive Directors have met
their shareholding requirement at the time of the bonus
payment, subject to Committee retaining the capacity
to exercise malus and clawback provisions. A level of
deferral will always apply to Executive Director annual
bonus outcomes (e.g. 20%).
No other changes to the Policy are proposed, which
remains well aligned to key principles of best practice.
The full Remuneration Policy, which is set out on pages
94 to 100 of this report, will be submitted for shareholder
approval at the 2025 AGM.
Executive Director remuneration arrangements for 2025
The Committee believes the CEO salary should be
increased to £475k, to appropriately reflect the CEO’s
skills, experience and value brought to the business, and
the importance of ensuring a competitive salary. Such
a salary level would remain low against companies of
a similar size. However, as outlined above, through the
incentive opportunities available under the new Policy,
target total remuneration would be market competitive,
but weighted towards the achievement of the stretching
performance-based elements of the package.
Following shareholder consultation, considerations on
the wider Circler salary increase and our culture, as
well as input from the CEO herself, this increase will be
phased over two years. With effect from 1 March 2025,
Lisa Jacobs will receive a salary increase to £450k, with
a further increase to £475k from 1 March 2026. The CFO
was appointed on 1 January 2025 on a salary of £350k,
and will not receive a further increase this year.
The 2025 annual bonus will be based 70% on financial
measures, which will continue to reflect revenue and
profit goals, and 30% on key strategic/non-financial
objectives. Bonus opportunities will be in line with the
new Remuneration Policy as described above. In respect
of the 2025 FC PCP, we intend to grant the CEO 350% of
salary and the CFO 250% of salary, in line with the normal
awards in the new Policy. Vesting of the award will be
subject to an assessment of performance conditions,
based 60% on relative Total Shareholder Returns (rTSR)
against the FTSE 250 excluding Investment Trusts,
and 40% on stretching Profit Before Tax (PBT) targets.
The targets are disclosed on page 95. In line with good
practice, and as requested by shareholders, for awards
in future years, we will keep the measures under review,
including reviewing whether other measures (e.g. return
on tangible equity, RoTE), would be appropriate to
include. As always, the Committee will consider overall
performance in determining any vesting of awards
(including share price appreciation).
Remuneration arrangements for Circlers
In a significant year for the business, I wish to thank all
our Circlers for their dedication and commitment over
the course of 2024. The Group annual bonus for 2024
is being awarded at c.118% of target in aggregate, with
payment being based on similar financial measures as the
Executive Directors.
In 2024, we continued our Share Incentive Plan, where
for Circlers buying “Partnership” shares in Funding
Circle they would receive two “Matching” shares for
every “Partnership” share purchased. We also paid a
bonus of up to £1,000 for junior Circlers in December
and continued to keep pace with the “Real Living Wage”
increasing the salary of any Circlers whose salary was
below the threshold in 2024.
For 2025, the Executive Committee members will be
included in the FC PSP and will be subject to the same
performance measures, targets, and vesting periods as
the Executive Directors. This ensures that the most senior
Circlers are aligned on driving the performance of the
business over the long term.
Conclusion
On behalf of the Remuneration Committee, I would like
to thank the other Committee members and the Circlers
who have supported the Committee this year. I would also
like to thank our shareholders for their continued support,
including those who engaged in our Remuneration Policy
reviews during 2024 and 2025. We were delighted with
the support received from shareholders at the 2024
AGM and we hope to continue to receive your support
at our 2025 AGM, where I will be available to respond to
any questions on this report or in relation to any of the
Committee’s activities.
Helen Beck
Chair of the Remuneration Committee
6 March 2025
Funding Circle Holdings plc | Annual Report and Accounts 2024 91
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Directors’ remuneration report continued
At a glance: Remuneration outcome for 2024
The charts below show the potential 2024 remuneration opportunity and actual achievement.
Lisa Jacobs, CEO Oliver White, CFO
Minimum Minimum
On-target On-target
Maximum Maximum
2024 actual 2024 actual
2023 actual 2023 actual
445 443
1,204 1,011
1,485 1,221
1,407 1,164
701 844
£0k £250k £500k £750k £1,000k £1,500k £0k £250k £500k £750k £1,000k £1,500k
Salary Benefits Pension Bonus Restricted shares
2024 annual bonus outturn
The chart below shows the outcome of the 2024 annual bonus. A summary of overall business performance is on
pages 44 to 50.
Performance measure Weighting
Threshold
0% payout
Target
50% payout
Maximum
100% payout
Outcome
(% of maximum)
Group Revenue 35%
Actual £160.1m
67.4%
£131m £152.6m £174.1m
Group Profit
Before Tax
35%
Actual £3.4m
91.0%
-£9.7m -£2.5m £4.7m
Strategic/non-financial
(including FlexiPay)
30%
Performance of strategic/non-financial objectives exceeded
expectations, and with significant strategic value delivered in
2024. See pages 103 to 104 for further details.
100%
Outcome
(% of salary)
Total (CEO) 85.4% 113.6%
Total (CFO) 85.4% 85.4%
Payments for 2024 cover a time period of 5 years
Element
Maximum opportunity
for 2024
Awarded
for 2024 2024 2025 2026 2027 2028
Salary n/a CEO: £424k
1
CFO: £420k
Salary,
benefits and
pension paid
in cash or
contributions
Pension 5% of salary 5% of salary
Benefits In line with
other Circlers
In line with
other Circlers
Annual bonus CEO: 133% of salary
CFO: 100% of salary
113.6% of salary
85.4% of salary
60%
paid in cash
100%
paid in cash
40% deferred into shares for 3 years
Restricted
shares
(granted
16 May 2024)
CEO: 133% of salary
CFO: 100% of salary
115% of salary
85% of salary
2
3-year vesting period (underpins tested
following completion of vesting period)
Post-vesting holding period
of 2 years
1. The CEO waived a proposed increase to £434k in 2024. 2. Oliver White’s 2024 restricted share award will be prorated for time in role.
Shareholding guidelines for Executive Directors as at 31 December 2024
700%
600%
500%
400%
300%
200%
100%
0%
Total
CEO (Lisa Jacobs) CFO (Oliver White)
331.7%
198.8%
Guideline
Shareholding
(% of salary)
Unvested awards Unvested awards (not subject to performance)
Vested but unexercised Beneficially owned shares
Shareholding as a % of salary is based on the three-month average
share price to 31 December 2024 of 133.3p. Unvested awards
subject to performance conditions are not taken into account in
the assessment of the shareholding until such time as they vest.
Funding Circle Holdings plc | Annual Report and Accounts 202492
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Element of
Remuneration Policy Current Policy Proposed changes in Policy and rationale Implementation in 2025
Salary
l Reviewed annually in March.
l Salaries take account of the
external market and the overall
employee context.
l No prescribed maximum salary level
or salary increases.
Proposed changes:
l No changes.
As of 1 March 2025, Executive
Director salaries are as follows:
l £450,000 for the CEO.
l £350,000 for the CFO on
appointment on 1 January 2025.
Benefits &
pension
l Executive Directors receive the
same benefits as other UK Circlers
which currently include, but are not
limited to, life assurance and private
medical insurance.
l Maximum contribution is in line
with contribution to other Circlers
in the Group, which is currently 5%
of salary. Individuals are entitled
to receive some or all of their
pension allowance as cash in lieu
of pension contribution.
Benefits offered to Executive
Directors will be in line with those
available to other employees in
the Group.
Executive Directors will receive
5% of salary in a combination of
contributions into their pension and
cash in lieu of pension contributions.
Annual bonus
l A maximum opportunity in respect
of any financial year of:
l CEO: 133% of salary.
l Other Executive Directors:
100% of salary.
l 40% of any bonus earned will be
deferred into Funding Circle shares
and will cliff vest after 3 years.
Proposed changes:
l Increased opportunity for the CEO to
further increase performance-based
variable pay.
l Up to 40% of any bonus earned
will be deferred into Funding Circle
shares which will cliff vest after 3
years. The level is dependent on the
shareholding of individual Executive
Directors. A level of deferral will
always apply (e.g. 20%).
Maximum opportunities of:
l 150% of salary for the CEO.
l 100% of salary for the CFO.
70% of bonus based on financial
measures, 30% strategic/
non-financial.
FC PSP
(replacing the
Restricted
Shares awards)
n/a Proposed changes:
l Introduction of the FC PSP. Grants
of up to 350% of salary, with typical
award sizes of 350% of salary for the
CEO and 250% for the CFO.
l Awards will vest after 3-years subject
to the achievement of performance
metrics. A post-vesting holding period
of 2 years will apply.
Maximum opportunities of:
l 350% of salary for the CEO.
l 250% of salary for the CFO.
Will vest 60% on Relative TSR and
40% on PBT.
Market positioning: Executive Director Remuneration
The Committee reviewed the proposed total remuneration for the Executive Directors against other listed companies
of a similar size. At the end of 2024, Funding Circle’s market capitalisation was positioned near the top of the FTSE
SmallCap. The total remuneration package, which is less fixed, and more long-term, performance-linked, than companies
of a similar size, is below the upper quartile of the top half of the FTSE SmallCap, however due to the higher leverage
will provide above upper quartile pay for achieving exceptional performance (data was also referenced against the
bottom of the FTSE 250 to ensure consistency). This weighting towards performance and the long-term aligns with
the Company’s remuneration philosophy as well as our strategic direction.
At a glance: Revised policy overview and implementation for 2025
Alignment
with Circlers
Fixed pay Variable pay
Salary Benefits Pension
Annual
bonus
Restricted
shares FC PSP
Executive
Directors
Executive
Committee
Senior
management
Mid-level
Circlers
Junior
Circlers
CEO CFO
Salary
Target total
remuneration Salary
Target total
remuneration
FTSE
SmallCap
Top Half
Upper
quartile
£583k £1,711k £402k £1,054k
Median
£518k £1,386k £350k £888k
Lower
quartile
£484k £1,193k £320k £778k
Funding
Circle
Current
(2024
Policy)
£424k £1,292k
£350k
£893k
Proposed
£450k £1,599k £984k
Funding Circle Holdings plc | Annual Report and Accounts 2024 93
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Directors’ remuneration report continued
Remuneration Policy
The Remuneration Policy, as set out in this section, applies to the roles
of Chair, Executive Director and Non-Executive Director. If approved by
shareholders in a binding vote at the 2025 AGM, the Remuneration Policy
will apply for a maximum of three years from the AGM.
The key changes to the Policy are the implementation of performance share plan and removal of restricted shares,
alongside increased variable short and long term opportunities, to drive performance based outcomes for Executive
Director reward. The other changes to the Policy include deferrals for short-term opportunities will now be subject
to Committee assessment of current Executive Director shareholdings, and the CEO shareholding requirement is
increased to 250% in-post and post-exit.
As part of the policy review, shareholders representing over 80% of issued share capital were consulted and helped
shape final Policy design.
Executive Directors’ remuneration
Element of
remuneration Key features
Purpose and link to
strategy Maximum opportunity Performance measures
Salary
Normally reviewed
annually in March.
Salaries take account of
the external market and the
overall employee context.
Supports the
attraction and
retention of the
best talent.
No prescribed maximum salary
level or salary increases.
Account will be taken of increases
applied to employees as a
whole when determining salary
increases.
Committee retains the discretion
to award higher increases where it
considers it appropriate, such as,
but not limited to:
l where an Executive Director
has had a change in scope or
responsibility;
l an Executive Director’s
development or performance
in role (e.g. to align a newly
appointed Executive Director’s
salary with the market over
time);
l where there is a significant
change in the size and/or
complexity of the Company; and
l where salary is considered to fall
behind the market competitive
range for similar roles.
n/a
Benefits
Executive Directors’ benefits
currently include, but are not
limited to, life assurance and
private medical insurance.
The Committee may
determine that Executive
Directors should receive
additional benefits if
appropriate, taking into
account typical market
practice and practice
throughout the Group.
Market competitive
(and cost effective)
benefits provide
reassurance and
risk mitigation and
support retention
of talent.
The value of benefits is not capped
as it is determined by the cost to
the Company, which may vary.
Benefits offered to Executive
Directors are broadly in line with
those available to other employees
in the Group.
n/a
Pension
Executive Directors are
entitled to receive employer
contributions to the
Funding Circle Ltd defined
contribution pension plan.
Individuals are entitled to
receive some or all of their
pension allowance as cash in
lieu of pension contribution.
To provide
retirement benefits
for Executive
Directors.
Maximum contribution in line with
contribution to other employees in
the Group, which is currently 5%
of salary.
n/a
Funding Circle Holdings plc | Annual Report and Accounts 202494
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Element of
remuneration Key features
Purpose and link to
strategy Maximum opportunity Performance measures
All-employee
plans
Executive Directors are
eligible to participate in
HMRC tax-efficient plans that
are available to all employees.
Funding Circle currently
operates a Share
Incentive Plan.
To encourage
share ownership
and alignment with
shareholders.
Participation levels are in line with
HMRC limits.
n/a
Annual bonus
Awards are based on
performance (typically
measured over a financial
year) against key
performance measures.
Up to 40% of any bonus
earned will normally be
deferred into shares for three
years. The level is dependent
on the shareholding
of individual Executive
Directors. A level of deferral
will always apply (e.g. 20%).
The Executive Directors
may, at the discretion of
the Committee, receive
dividend equivalents on the
deferred shares.
Malus and clawback
provisions apply (see below).
To motivate
and reward the
achievement of
the Group’s annual
financial and
strategic targets.
A maximum opportunity in respect
of any financial year of:
l CEO: 150% of salary.
l Other Executive Directors: 100%
of salary.
Measures and targets will
normally be set annually by the
Committee and will be in line
with Funding Circle’s strategy.
A mix of both financial and non-
financial measures will typically
be used, with at least 60% of
the annual bonus normally
based on financial measures.
The target annual bonus is
normally 50% of maximum
opportunity. Typically, 0%
will be payable for threshold
performance.
The Committee has discretion
to amend the payout should
any formulaic outcome not
reflect the Committee’s
assessment of overall business
performance, the performance
of the individual, or the
experience of shareholders or
other stakeholders over the
performance period.
FC
Performance
Share Plan
(PSP)
Executive Directors are
granted FC PSP awards with
a three-year performance
and vesting period.
Following the end of the
vesting period, any vested
awards will be subject to a
two-year holding period.
Awards may be granted in
the form of conditional share
awards or nil-cost options.
The Executive Directors
may, at the discretion of the
Committee, receive dividend
equivalents on vested shares.
The awards are subject
to malus and clawback
provisions (see below).
Align Executive
Directors with
shareholders’
interests, and
incentivises
execution of Funding
Circle’s long-
term strategy.
The maximum award level granted
in respect of a financial year is
350% of salary.
Awards will typically be 350%
of salary for the CEO and 250%
of salary for other Executive
Directors.
Prior to each grant, the Committee
will consider the size of grant to
be awarded taking into account
the share price at the time of grant
as well as other factors such as
appropriate market data.
The vesting of the FC PSP
awards will be subject to
performance conditions.
Performance is measured over
three years against measures
set by the Committee for
each award.
The PSP is based on
quantitative measures, with
the majority normally based on
financial measures, aligned to
strategy and shareholder value.
The performance measures for
awards to be granted in 2025
are as follows:
l Relative total shareholder
return (TSR) – 60%
l Adjusted Profit Before Tax
(PBT) – 40%
Different performance
measures and/or weightings
may be used for awards in
future years.
The level of vesting for
threshold performance
will be no higher than 25%
of maximum.
At the end of the three-year
vesting period, the Committee,
in its absolute discretion, will
determine the overall vesting
level of the award to ensure
that outcomes accurately
reflect the Committee’s
assessment of overall business
performance, the performance
of the individual, performance
against key strategic,
governance or ESG metrics, or
the experience of shareholders
(e.g. share price appreciation)
or other stakeholders over the
vesting period.
Funding Circle Holdings plc | Annual Report and Accounts 2024 95
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Directors’ remuneration report continued
Element of
remuneration Key features
Purpose and link to
strategy Maximum opportunity Performance measures
In-post
shareholding
requirement
Executive Directors are
expected to build and
maintain a holding of shares
in the Company.
Supports our
ownership mentality
focus, promotes
stewardship
and helps align
management with
shareholders
Minimum shareholding
requirement, to be satisfied
within five years of appointment
of no less than 250% of salary
for the CEO and 200% of salary
for other Executive Directors. If
any Executive Director does not
meet the requirement, subject to
consideration by the Committee of
the factors at the time, they will be
expected to retain all of the net of
tax number of shares vesting under
any of the Company’s discretionary
share incentive arrangements until
the requirement is met.
n/a
Post-exit
shareholding
requirement
Executive Directors
are expected to retain
a proportion of their
shareholding for a two year
period after they have left
Funding Circle.
To reinforce long-
term alignment of
Executive Directors’
interests with those
of shareholders
post cessation of
employment.
Minimum post-exit shareholding
requirement of “guideline shares”
equal to 250% of salary for the
CEO and 200% of salary for other
Executive Directors or the actual
shareholding on departure, if
lower. “Guideline shares” do not
include shares which the Executive
Director held at IPO, purchased
in the market directly or acquired
pursuant to the exercise of
pre-IPO awards
n/a
Performance measures and targets selection
Performance measures
The measures used in the annual bonus plan will be selected annually to reflect the Group’s key financial and strategic
objectives for the year. The FC PSP will be subject to performance measures that will be measured over three years.
These measures will be selected annually to reflect the Group’s key long-term strategy and overall goals, and alignment
with value creation for shareholders. Measures are kept under review and are subject to change in line with business
strategy.
Performance targets
In setting performance targets, the Committee considers a range of factors including internal and external forecasts,
prior year performance, degree of stretch against the performance targets in the business plan, and market conditions.
Targets are set to be stretching, yet achievable to ensure Executive Directors are motivated, with maximum targets set
at a level reflecting exceptional performance.
Malus and clawback policy
Malus and clawback provisions apply to annual bonus awards, deferred bonus awards and FC PSP Share awards over
the following time periods:
Malus Clawback
Annual bonus
To such time as payment is made. Up to two years following payment.
Deferred bonus awards
To such time as the award vests. No clawback provisions apply (as malus provisions
apply for three years from the grant date).
FC PSP
To such time as the award vests. Up to two years following vesting.
Malus and clawback may apply in the following circumstances:
l a material misstatement of the audited accounts of a member of the Group;
l an error in assessing a performance measure or underpin, or an error in the information or assumptions on which
awards were granted, vest or released;
l a material failure of risk management in any member of the Group or a relevant Business Unit;
l serious reputational damage to any member of the Group or a relevant Business Unit; or
l serious misconduct or material error on the part of the participant.
Remuneration Policy continued
Executive Directors’ remuneration continued
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STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Discretions reserved in administering incentive awards
The Committee will administer the annual bonus, deferred bonus awards, FC PSP awards and Share Incentive Plan
awards in accordance with the relevant plan rules and the above Remuneration Policy table. The Committee retains
certain discretions, consistent with market practice, in relation to the administration of the awards including:
l the determination of performance measures, underpins and targets and resultant vesting and pay-out levels;
l the ability to amend or substitute a performance measure or target if one or more events occur which cause the
Committee to reasonably consider that an amended or substituted performance measure or target would be more
appropriate and would not be materially less difficult to satisfy than originally intended;
l the determination of the treatment of individuals who leave employment, based on the relevant plan rules, and the
treatment of the awards on exceptional events, such as a change of control of the Company; and
l the ability to make adjustments to deferred bonus awards, Restricted Share awards, Share Incentive Plan awards and
FC PSP awards in certain circumstances (e.g. rights issues or corporate restructurings).
Minimum
Minimum
474
371
1,599
984
2,724
1,596
3,511
2,034
£4,000k
£3,500k
£3,000k
£2,500k
£2,000k
£1,500k
£1,000k
£500
0
£4,000k
£3,500k
£3,000k
£2,500k
£2,000k
£1,500k
£1,000k
£500
0
Target
Target
Maximum
Maximum
Maximum +
50% share
price increase
Maximum +
50% share
price increase
CEO (Lisa Jacobs) CFO (Tony Nicol)
100%
100%
30%
21%
49%
17%
25%
58%
14%
19%
67%
38%
18%
44%
23%
22%
55%
18%
17%
65%
Illustrations of the application of the Remuneration Policy in 2025
Fixed Annual Bonus FC PSP Total
Illustration assumptions
Element of pay Minimum Target Maximum
Maximum + 50% share
price appreciation
Fixed remuneration:
l Base salary – effective as at 1 March 2025
l Benefits – in line with the value of 2024 benefits disclosed in the single figure table (which includes the previous
CFO’s value for the new CFO)
l Pension – 5% of salary
Annual bonus No payout 50% of maximum
(target payout)
Maximum payout
FC PSP No vesting Assumes threshold
performance with 25%
of the award vesting.
Assumes 100% of
award vests.
Maximum value vesting
multiplied by 1.5x.
Legacy arrangements
The Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising
any discretions available to it in connection with such payments) notwithstanding that they are not in line with the Policy set out
above where the terms of the payment were agreed (i) before the 2025 Policy came into effect provided that the terms of the
payment were consistent with any shareholder-approved Directors’ Remuneration Policy in force at the time they were agreed
or (ii) at a time when the relevant individual was not a Director of the Company or other person to whom this policy applies and,
in the opinion of the Committee, the payment was not in consideration for the individual becoming a Director of the Company
or other such person. For these purposes “payments” includes the Committee satisfying awards of variable remuneration and,
in relation to an award over shares, the terms of the payment are “agreed” at the time the award is granted.
The Committee reserves the right to make minor amendments to the Policy, for regulatory, exchange control, tax or
administrative purposes or to take account of a change in legislation, without seeking shareholder approval.
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STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Directors’ remuneration report continued
Remuneration Policy continued
Executive Directors’ service contracts
The Executive Directors’ service contracts are on a rolling basis and are terminable by either the Company or the
individual on 12 months’ notice for the CEO and six months’ notice for the CFO. Notice periods for Executive Directors
will not exceed 12 months from either party.
Date of service agreement
Lisa Jacobs, CEO 1 January 2022
Tony Nicol, CFO 1 January 2025
Payments for loss of office
The principles on which the determination of payments for loss of office will be approached are set out below.
Policy
Payment in
lieu of notice
The Committee has discretion to make a payment in lieu of notice based on salary for the unexpired period of notice. The
Company may make such payment in monthly instalments, and it may be subject to mitigation.
Annual bonus
This will be at the discretion of the Committee on an individual basis and the decision as to whether or not to pay a
bonus in full or in part will be dependent on a number of factors, including the circumstances of the Executive Director’s
departure and their contribution to the business during the performance period in question.
Any bonus earned will normally be pro-rated for time in service during the performance period and will, subject to
performance, be paid at the usual time (although the Committee retains discretion to pay the bonus earlier in appropriate
circumstances) and in the normal manner. Any bonus earned for the year of departure and, if relevant, for the prior year
may be paid wholly in cash at the discretion of the Committee.
Deferred
bonus award
The extent to which any unvested awards will vest will be determined in accordance with the Deferred Bonus Plan rules.
If an Executive Director leaves for any reason (other than being dismissed for cause) during the deferral period
then unvested awards will continue and vest at the normal vesting date. In exceptional circumstances (including if a
participant dies), the Committee may decide that the Executive Director’s unvested award will vest and be released early
at the date of cessation of employment, in which case the Committee has discretion to apply time pro rating in limited
circumstances.
FC PSP
The extent to which any unvested awards will vest will be determined in accordance with the share plan rules.
Unvested awards will normally lapse on cessation of employment. However, unless a participant is dismissed for cause,
the Committee has discretion to determine that the unvested awards will continue and remain capable of vesting at the
normal vesting date, subject to the performance measures being met. To the extent that the awards vest, a two-year
holding period would then normally apply. In exceptional circumstances (including if a participant dies), the Committee
may decide that the Executive Director’s awards will vest and be released early at the date of cessation of employment or
at some other time (e.g. at the vesting date).
In either case, vesting will depend on the extent to which the performance conditions have been satisfied and will be
subject to a pro rata reduction for time served during the vesting period (although the Committee has discretion to
disapply time pro rating if the circumstances warrant it).
Change
of control
Deferred bonus awards and FC PSP will vest early in the event of a takeover, merger or other relevant corporate event.
Deferred bonus awards will typically vest in full.
As regards FC PSP awards, vesting will depend on the extent to which the performance conditions have been satisfied,
with the Committee taking into account relevant factors at the time, and will be subject to a pro rata reduction for time
served during the vesting period (although the Committee has discretion to disapply time pro rating if the circumstances
warrant it).
Alternatively, the Committee may permit deferred bonus awards and FC PSP awards to be exchanged for equivalent
awards of shares in a different company (including the acquiring company).
Other
payments
Executive Directors will be entitled to payment for accrued holiday.
Awards under the Share Incentive Plan may be released in the event of cessation of employment or change of control in
accordance with the plan rules.
The Committee reserves the right to make any other payments in connection with a Directors’ cessation of office or
employment where such payments are made in good faith in discharge of an existing legal obligation (or by way of
damages for breach of such an obligation) or by way of settlement or compromise of any claim arising in connection
with the termination of a Director’s office or employment. Any such payments may include but are not limited to paying
any fees for outplacement assistance and for the Directors’ legal and/or professional advice fees in connection with his
cessation of office or employment. Incidental expenses may also be payable where appropriate.
Recruitment policy
The Company’s recruitment remuneration policy aims to give the Committee sufficient flexibility to secure the
appointment of high calibre executives to strengthen the management team and secure the skill sets necessary
to deliver the Group’s strategic aims.
When hiring a new Executive Director, the Committee will typically align the remuneration package with the Remuneration
Policy as set out above. The Committee may include other elements of pay which it considers appropriate, however, this
discretion is capped and is subject to the principles and the limits referred to below. The key terms and rationale for any
such element would be disclosed in the Directors’ Remuneration Report for the relevant year.
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Policy
Salary
Salary will be set at a level appropriate to the role and the experience of the Executive Director being appointed.
This may include a provision for future increases up to a market rate, in line with increased experience and
responsibilities, subject to good performance, where it is considered appropriate.
Buy-out awards
It may be necessary to make additional awards in connection with the recruitment to buy-out remuneration terms
forfeited by the individual on leaving a previous employer if it considers the cost can be justified and it is in the
best interests of the Company. Buy-out awards are not subject to a formal cap. The Committee will seek to make
buy-outs subject to what are, in its opinion, comparable requirements in terms of service and performance.
Where considered appropriate, buy-out awards will be liable to forfeiture or recovery provisions on early departure.
Maximum level
of variable
remuneration
The maximum level of variable remuneration which may be granted (excluding buy-out awards) will be 150% of
salary for the annual bonus and 350% of salary for FC PSP awards, in line with the limits in the Policy Table above.
Other elements of
remuneration
Other elements may be included in the following circumstances:
l An interim appointment being made to fill an Executive Director role on a short-term basis.
l If exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive function on
a short-term basis.
l If an Executive Director is recruited at a time in the year when it would be inappropriate to provide an annual
bonus or Restricted Share award for that year, subject to the limit on variable remuneration set out above, the
quantum in respect of the period employed during the year may be transferred to the subsequent year.
l If the Executive Director is required to relocate, reasonable relocation, travel and subsistence payments may be
provided (either via one-off or ongoing payments or benefits).
For an internal appointment, any legacy arrangements will either continue on their original terms or be adjusted to
reflect the new appointment, as appropriate.
Any share awards referred to in this section will be granted as far as possible under the Company’s existing share
plans. If necessary, and subject to the variable remuneration limits referred to above, awards may be granted outside
of these plans as permitted under the Listing Rules which allow for the grant of awards to facilitate, in unusual
circumstances, the recruitment of an Executive Director.
Fees payable to a newly appointed Chair or Non-Executive Director will be in line with the fee policy in place at the time
of appointment.
Policy on external appointments
Executive Directors may hold external directorships and retain any fees for such directorships if the Board determines
that such appointments do not cause any conflict of interest.
Non-Executive Directors’ remuneration
Key features Purpose and link to strategy
The fees paid to the Chair are determined by the Remuneration Committee. The
fees for the Non-Executive Directors are determined by the Board as a whole.
The Chair and the Non-Executive Directors are paid annual fees and do not
participate in any of the Company’s incentive arrangements or receive any
pension provision or other benefits.
Additional fees are payable for additional Board duties, including acting as Senior
Independent Director and for chairing Committees. Additional fees may be paid
in the exceptional event that Non-Executive Directors are required to commit
substantial additional time above that normally expected for the role.
The Chair and/or Non-Executive Directors may receive part of their fee(s) in
company shares.
The Non-Executive Directors are not entitled to any compensation on termination
of their appointment.
The Non-Executive Directors are entitled to reimbursement of reasonable
expenses (including any associated tax liabilities).
Overall fees paid to the Chair and Non-Executive Directors will remain within the
limits set by the Company’s Articles of Association.
Fees are set at a level to reflect
the amount of time and level of
involvement required in order to
carry out their duties as members
of the Board and its Committees
and to attract and retain Non-
Executive Directors of the highest
calibre with relevant commercial
and other experience.
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Directors’ remuneration report continued
Remuneration Policy continued
Non-Executive Directors’ remuneration continued
As an early-stage private company, which did not pay Directors’ fees, the Company historically granted options to
certain Non-Executive Directors under the Company’s pre-IPO share option plan. Although the options granted will
continue to be held by those Non-Executive Directors going forward, no further options have or will be granted to
Non-Executive Directors post-IPO under any of the Company’s share option plans. The options held by the relevant
Non-Executive Directors are all vested.
Remuneration Policy for Circlers
The Committee receives regular updates on overall pay and conditions in the Group, and pay and employment
conditions generally in the Group are taken into account when setting Executive Directors’ remuneration.
The approach to annual salary reviews is consistent across the Group, with consideration given to the level of
experience, responsibility, individual performance and salary levels in comparable companies.
All Circlers are eligible for either the Group annual bonus plan or another bonus arrangement. Opportunities vary by
organisational level and function. From inception, a key element of the remuneration philosophy has been to support
share ownership across the business. This has historically been achieved through making equity incentives available
to Circlers to encourage them to behave as owners – taking decisions that balance long-term value creation with
achieving shorter-term strategic priorities. The remuneration policy for Circlers is reviewed annually to ensure it’s
aligned with our strategy, valued by Circlers, and provides value for money.
The key elements to the incentive arrangements are:
l The Executive Committee members currently participate in a restricted share plan which is similar in nature to
the plan that the Executive Directors are currently eligible for. If the proposed Remuneration Policy is approved at
the 2025 AGM, the Executive Committee members will participate in the FC PSP, to ensure an increased focus on
performance and alignment with Executive Directors. The same performance conditions will apply to the Executive
Committee as the Executive Directors and will be measured over three years and vest after three years.
l Other senior management and senior specialist roles participate in a restricted share plan with grant size increasing
with seniority. Equity awarded to these Circlers is subject to continued employment for the two years following the
grant date but is not otherwise normally subject to performance conditions.
l The leadership team, managers and specialists participate in a Group annual bonus plan which has similar financial
measures as the Executive Directors’ annual bonus.
l All Circlers, including Executive Directors, are eligible to participate in our Share Incentive Plan where, for every
“Partnership share” that is purchased, two “Matching shares” are awarded.
l Junior Circlers are eligible to receive a cash bonus each year, the size of which depends on their length of service
and affordability.
Our workforce engagement Director, Helen Beck, frequently holds workforce engagement sessions with Circlers. While
Circlers were not directly consulted in the development of the Directors’ Remuneration Policy, a range of topics are
discussed in workforce engagement sessions including those of remuneration, reward and recognition.
Alignment between Executive and Circlers’ remuneration
The Executive Directors’ Policy was designed to align Circler and Executive pay. The main differences between how
Executive Directors and Circlers are remunerated are the participation in the FC PSP, longer time periods (vesting,
holding and deferral) and tougher performance criteria. The annual performance measures that apply to senior
management and specialist roles are the same as those used by Executive Directors.
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Annual report on remuneration
This part of the report sets out how the current Remuneration Policy
has been applied in 2024 and how the Committee intends to apply the
proposed Remuneration Policy in 2025. This part of the report will be
subject to an advisory shareholder vote at the 2025 AGM.
Role of the Committee
The Committee’s primary role is to determine the remuneration of the Directors and Executive Committee, and the
Remuneration Policy for the Executive Directors, as well as monitoring and reviewing its ongoing appropriateness
and relevance. In doing so, the Committee ensures that the Remuneration Policy is aligned with the Company’s key
remuneration principles as well as taking into account external guidance, such as the UK Corporate Governance Code.
For information regarding the Committee’s role and key responsibilities, please see the Terms of Reference on our
website at corporate.fundingcircle.com/who-we-are/corporate-governance/board-committees.
Committee composition
None of the members who have served on the Committee during the year had any personal interest in the matters
decided by the Committee and they are all considered to be independent by the Company. The Company Secretary
acted as Secretary to the Committee.
Committee members Number of meetings attended
Helen Beck, Chair 6/6
Andrew Learoyd 6/6
Matthew King 6/6
The Executive Directors, Chief People Officer, other members of the senior management team and our external
remuneration consultants, Alvarez & Marsal, were invited to Committee meetings where it was deemed appropriate.
No individuals were involved in decisions relating to their own remuneration.
2024 Committee workstreams
l determined the payout of the Executive Directors’ 2023 annual bonus;
l approved the payout of the 2023 annual bonus for Circlers;
l approved the design of the 2024 annual bonus for Circlers and the equity plans;
l set the 2024 annual bonus targets for Executive Directors;
l set the 2024 Restricted Share Plan underpins and approved the grants for Executive Directors;
l reviewed other variable pay plans in the Group;
l approved reward decisions relating to members of the Executive Committee and reviewed Circler compensation; and
l conducted a comprehensive review of the Remuneration Policy, which included consultation with our shareholders,
in preparation for its renewal at the 2025 AGM.
2025 Committee priorities
l approve the remuneration arrangements for the Executive Committee, including their equity grants and 2024
bonus outcomes;
l approve the design of the 2025 annual bonus for Circlers and the equity plans, and review other non-Group incentives;
l set the 2025 annual bonus targets, ensuring they align with Funding Circle’s strategy as well as its ESG priorities;
l set the 2025 FC PSP performance conditions and approve the grants for Executive Directors; and
l continue to monitor remuneration practices across the Company as a whole, keeping abreast of current and evolving
market practice.
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STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Committee effectiveness
The Committee undertook an effectiveness review at the end of 2024, whereby each Committee member and, by
invitation, the Chief People Officer, Company Secretary, and the Head of Reward completed a tailored questionnaire.
The questionnaire covered topics such as the quality of the remuneration support provided to the Committee and the
appropriateness of the remuneration policies and practices implemented in 2024. The positive scores and comments
demonstrated that the Committee is working well.
External advisers
The Committee is satisfied that the advice it has received from its appointed adviser Alvarez & Marsal as remuneration
consultants is independent, and that the engagement partner and team that have provided remuneration advice do
not have connections with the Company that might impair their independence. Alvarez & Marsal was appointed by
the Committee in 2023 following a competitive tender process. Alvarez & Marsal is a member of the Remuneration
Consultants Group and, as such, voluntarily operates under its Code of Conduct in relation to executive remuneration
matters in the UK.
The fee paid to Alvarez & Marsal in 2024 in relation to advice provided to the Committee was £51,900 (excluding VAT),
which was based on time spent. Alvarez & Marsal provide no other services to the Group.
Letters of appointment and service contracts
Director
Commencement date
of current term
Expiry of
current term
Notice period
From Company From Director
Executive Directors
Lisa Jacobs 1 January 2022 n/a Twelve months Twelve months
Tony Nicol 1 January 2025 n/a Six months Six months
Non-Executive Directors
Andrew Learoyd 10 September 2024 30 June 2025 One month One month
Ken Stannard 1 January 2025 1 January 2028 One month One month
Geeta Gopalan 18 September 2024 18 September 2027 One month One month
Hendrik Nelis 5 September 2024 5 September 2027 One month One month
Neil Rimer 5 September 2024 5 September 2027 One month One month
Helen Beck 3 July 2024 3 July 2027 One month One month
The Executive Directors’ service contracts are on a rolling basis. All Non-Executive Directors have letters of
appointment with the Company. The appointments of each of the Non-Executive Directors are for an initial term
of three years, and have been extended for those Non-Executive Directors whose original term has since expired.
The appointment of each Non-Executive Director is subject to annual re-election at the AGM.
Shareholder voting
The Committee’s resolutions in respect of the Remuneration Policy and Annual Report on Remuneration at the 2024
AGM received the following votes from shareholders:
Number of votes
Remuneration Policy
(2024 AGM)
Annual Report on Remuneration
(2024 AGM)
Votes cast in favour 262,845,251 98.7% 265,526,769 99.7%
Votes cast against 3,377,814 1.3% 696,296 0.3%
Votes withheld 42,130 0.0% 42,130 0.0%
Total votes cast (including withheld) 266,265,195 100.0% 266,265,195 100.0%
Annual report on remuneration continued
Funding Circle Holdings plc | Annual Report and Accounts 2024102
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Single total figure of remuneration (audited)
The following tables set out the aggregate emoluments earned by the Directors in the year ended 31 December 2024
and 2023 respectively.
2024
Salary
and fees
£000
Taxable
benefits
1
£000
Pensions
2
£000
Bonus
£000
Long-term
incentives
£000
Total
£000
Total
fixed
£000
Total
variable
£000
Executive Directors
Lisa Jacobs 423 5 21 480 478
3
1,407 449 958
Oliver White 419 7 21 358 359
3
1,164 447 717
Non-Executive Directors
Andrew Learoyd 207 — — — — 207 207 —
Eric Daniels
4
21 — — — — 21 21 —
Geeta Gopalan 80 — — — — 80 80 —
Helen Beck 70 — — — — 70 70 —
Matthew King 70 — — — — 70 70 —
Samir Desai CBE
5
45 — — — — 45 45 —
Hendrik Nelis
6
— — — — — — — —
Neil Rimer
6
— — — — — — — —
2023
Executive Directors
Lisa Jacobs 412 1 20 268 — 701 433 268
Oliver White 408 4 20 200 212
7
844 432 412
Non-Executive Directors
Andrew Learoyd 207 — — — — 207 207 —
Eric Daniels 70 — — — — 70 70 —
Geeta Gopalan 80 — — — — 80 80 —
Helen Beck 70 — — — — 70 70 —
Matthew King 70 — — — — 70 70 —
Samir Desai CBE 55 — — — — 55 55 —
Hendrik Nelis
6
— — — — — — — —
Neil Rimer
6
— — — — — — — —
1. Taxable benefits for Executive Directors principally include private medical cover and life assurance cover and awards made under the Share Incentive Plans
(including matching shares). Taxable benefits for Non-Executive Directors relate to reimbursement of travel to the workplace. The Company ensures that the
Non-Executive Directors are kept whole by settling the expense and any related tax. The figures shown include the cost of the taxable benefit plus the related
tax charge.
2. Executive Directors were eligible for a 5% of base salary pension contribution, £10,000 was paid into each of Lisa Jacobs and Oliver White’s company pension
with the remainder paid as cash in lieu.
3. Shows the value of the vesting of the 2022 Restricted Share award based on a 3-month average share price to 31 December 2024 of 133.3p. This award was
granted on 24 March 2022 was based on a fixed number of shares and was worth 78% of salary for the CEO and 58% of salary for the CFO using a 3-month
average share price of 86.6p at date of grant. The fixed number of shares meant that the value of the award was far less than the initial policy maximums of 133%
of salary for the CEO and 100% of salary for the CFO. The proportion of the vested value which is attributable to share price growth is therefore 35.1% of the
value, or £167k for the CEO and £126k for the CFO. The Remuneration Committee did not exercise discretion in respect of this share price appreciation.
4. Eric Daniels stepped down from the FCH Board on 15 May 2024.
5. Samir Desai CBE stepped down from the FCH Board on 25 October 2024.
6. Hendrik Nelis and Neil Rimer, who are non-independent Non-Executive Directors, have waived their entitlement to a fee.
7. Shows the value of the 2021 Restricted Share award that vested on 19 May 2024 at a share price of 78.8p. This award was granted on 19 May 2021 based on
a share price of 148.5p. The proportion of the vested value which is attributable to share price growth is therefore zero. The Remuneration Committee did
not exercise discretion in respect of this share price depreciation. The 2021 Restricted Share award value disclosed in the 2023 Remuneration Report was an
estimate based on an average three-month share price to 31 December 2023 of 37.5p.
2024 annual bonus (audited)
The maximum opportunities for 2024 were 133% of salary for the CEO and 100% of salary for the CFO. As announced
in last year’s Directors’ Remuneration Report, the weighting of the financial measures would be at least 60% of
the annual bonus measures and the strategic/non-financial measures at most 40%. The Remuneration Committee
determined that the weighting on financial measures would be 70%, split equally between Group Revenue and Group
Profit Before Tax (pre-exceptionals). The remaining 30% on strategic/non-financial was based on delivering key 2024
strategic, stewardship, and sustainability objectives. The measures were set by the Committee and were in line with
Funding Circle’s strategy. Stretching financial targets were set by the Committee at the start of the year, taking into
consideration a number of factors including our 2024 guidance. For the financial measures, an on-target bonus could
be earned for achieving 2024 guidance performance.
Funding Circle Holdings plc | Annual Report and Accounts 2024 103
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annual report on remuneration continued
2024 annual bonus (audited) continued
Structure of the 2024 bonus
Element (weighting %)
Threshold
(0% payout)
Target
(50% payout)
Maximum
(100% payout) Outcome
Implied payout
of element
CEO CFO
Financial
measures (70%)
Group revenue (35%) £131m £152.6m £174.1m £160.1m 67.4%
Group profit before tax (35%)
(pre-exceptionals)
-£9.7m -£2.5m £4.7m £3.4m 91.0%
Strategic/non-financial (30%) See below 100%
Total (% of maximum) 85.4%
Total (% of salary) 113.6% 85.4%
Final outcome (£k) 480 358
In this overall performance context, the outcome of the bonus assessment against the agreed targets was 85.4%
of maximum. The Committee considers this an appropriate reflection of the overall performance delivered for
stakeholders, and therefore no discretion was applied. In line with our Remuneration Policy, 40% of Lisa Jacobs’ bonus
payout will be deferred into shares for three years (subject to continued employment) and Oliver White’s bonus will be
paid in cash.
Strategic/non-financial measures
In 2024 we removed personal performance from the Executive Directors’ strategic/non-financial measures as the
Committee believes that their personal performance is reflected in the overall Company performance.
Category Details on objectives and performance
Strategy
Delivery of key
2024 strategic
objectives
#1 in new products: FlexiPay:
l More than 3x growth in FlexiPay line of credit compared to 2023.
l Built the infrastructure and capability for a credit card product, launching a Cashback credit card in the
second half of the year.
l Over 18k FlexiPay cards issued, and c.12k active accounts.
US disposal:
l Successful divestment of US business at a gain of £10 million and transfer of all US Circlers to the
acquiring party.
Journey to ongoing Group profitability: increased efficiency, cost management, and productivity
improvements:
l Successful streamlining of the business to deliver £15 million annualised savings into 2025, including a
reduction in headcount (~120).
l >3x share price and >£400 million market cap.
Stewardship &
Sustainability
Delivering
business goals in
the right way
Risk & Controls appetite maintained within agreed thresholds:
l Our credit portfolios demonstrated resilience in the face of a deteriorating market, showcasing the
strength of our underwriting and risk management practices.
l Continued to strengthen risk management framework and improve our credit models.
Building culture and increasing engagement:
l Engagement maintained, scoring 64% (v.66% in 2023). This is considered a positive outcome in light of
significant business change in 2024. This included a reduction in the number of UK Circlers through a
redundancy programme, and change to the hybrid working policy (increasing office attendance to at
least 3 days per week).
l Voluntary attrition levels remained low throughout the year at around 18%.
Committed and sustained focus on our ESG agenda and goals:
l In 2024, the Company made good progress in delivering against its ESG objectives, taking into
consideration changes in the business, including the sale of the US operations.
l Carried out benchmarking of our activities and reviewed our ambition statements for each of our key
pillars – Environmental, Social Impact, DEI and Governance – to ensure they remain in line with our
vision and broader sustainability developments.
The Remuneration Committee determined that as performance against strategic/non-financial objectives exceeded
expectations, and with significant strategic value delivered in 2024, that 100% of the strategic/non-financial element
should pay out. This has been a year of considerable progress for Funding Circle.
Funding Circle Holdings plc | Annual Report and Accounts 2024104
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Restricted shares awarded in 2022 vesting in respect of 2024 (audited)
The 2022 restricted share awards granted to Lisa Jacobs and Oliver White were based on a number of shares which
was fixed at the beginning of the 2021 Remuneration Policy. Awards of 358,177 and 269,306 shares were made to the
CEO and CFO on 24 March 2022. This represented 78% and 58% of salary respectively, a reduction of approximately
42% on the Policy levels at that time (being 133% of salary for the CEO and 100% of salary for the CFO).
The restricted share awards were subject to a number of underpins (as opposed to performance conditions). The
financial underpin was based on achieving average Total Income for the Group of £181.3 million over the three-year
period to 31 December 2024. Following the sale of the US business, it was no longer feasible to assess performance
against this underpin in a way which was fair and consistent with the basis of the original calibration. Further, as the
US business was highly capital intensive and required significant capital allocation from the wider Group to achieve
its goals, the Committee determined that a restatement of the underpin was not appropriate nor feasible given the
different investment assumptions that would need to be applied for the wider Group. In this context, the Committee has
considered the underpin based on a broader assessment of overall performance during the period. In this assessment,
the Committee considered a number of key aspects of financial and strategic performance, including:
l profitability being achieved ahead of expectations in 2024 and over the three-year period;
l the successful sale and transition of the US business to the acquiring party;
l successful launch of a new UK-focused multi-product strategy, including a short-term credit SME proposition in
FlexiPay; and
l market acknowledgement and significant change to share price and market capitalisation, having approximately
doubled over the period.
In addition to the financial underpin there were also qualitative underpins to ensure that Executive Directors are not
rewarded where the Committee considers there to have been a failure in performance, including serious breach
of regulation, material reputational damage and gross misconduct. The Committee determined that the qualitative
underpins were achieved.
In determining the final vesting, the Committee also took into consideration the size of the awards, which were reduced
significantly from the Policy level at the time of grant due to the fixed number of shares approach, as described above.
In this context, the Committee determined that awards will vest in full on 24 March 2025. There is a further 2-year post-
vesting holding period that will apply until 24 March 2027.
Restricted Share awards granted during 2024 (audited)
Restricted Share awards were granted to the Executive Directors on 30 March 2024 under our Policy. Details of the
awards are set out below:
Face value at grant
1
Type of award Number of shares £ % of salary Grant date Vesting date Holding period
Lisa Jacobs Nil-cost option 1,006,191 488,003 115% 16 May 2024 16 May 2027 16 May 2027
to 16 May 2029
Oliver White Nil-cost option 736,521 357, 213 85% 16 May 2024 16 May 2027 16 May 2027
to 16 May 2029
1. In line with Funding Circle’s established approach, based on a three-month average share price to the grant date of 48.5p and salaries of £424,350 for Lisa
Jacobs and £420,250 for Oliver White.
We disclosed in the 2023 Directors’ Report on Remuneration that the Committee intended to grant awards at a level
below the Policy maximum of 133% and 100% of salary, for the CEO and CFO respectively in 2024. This was to reflect
investor expectations around safeguarding against the potential for “windfall gains” in scenarios where long-term share
awards are granted following a period of share price decline. In May 2024 we granted awards at the level of 115% and
85% of salary for the CEO and CFO respectively. These awards are subject to an assessment of financial and non-
financial underpins.
Funding Circle Holdings plc | Annual Report and Accounts 2024 105
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annual report on remuneration continued
Restricted Share awards granted during 2024 (audited) continued
Restricted share awards are subject to discretionary underpins that guide the Remuneration Committee when
determining whether any discretion needs to be applied to reduce, including to nil, the final vesting of the restricted
shares. The underpins are both financial as well as non-financial, and are as follows:
l For the financial underpins the Remuneration Committee will assess whether there is a material weakness in
the underlying financial health or sustainability of the business. Factors such as, but not limited to, share price,
Originations, Net Income, profitability, and cash generation would be considered, in the context of the Board’s
expectations and the market environment.
l For the non-financial underpins the Remuneration Committee will assess ESG performance, delivery against strategic
objectives, and personal performance over the vesting period.
l To ensure that Executive Directors are not rewarded where the Committee considers there to have been a failure in
performance, including serious breaches of regulation, material reputational damage or gross misconduct further
reductions will be made.
l Prior to vesting, the Committee retains the flexibility to assess any element of performance it deems appropriate in
order to determine whether a discretionary adjustment is requirement.
Any vested awards will remain subject to a two-year post-vesting holding period.
Directors’ shareholding and share interests (audited)
Table of Directors’ share interests as at 31 December 2024
1
Beneficially
owned shares
2
Vested but
unexercised
awards
Unvested
awards
(not subject to
performance
conditions)
Unvested
awards
(subject to
performance
conditions) Total
Total that count
towards
shareholding
guidelines
(including
unexercised
awards
net of tax)
Executive Directors
Lisa Jacobs 414,658 736,142 473,496 1,722,545 3,346,841 1,055,766
Oliver White 179,441 340,543 502,787 1,275,133 2,297,904 626,406
Non-Executive Directors
Andrew Learoyd 1,789,991 — — — 1,789,991 n/a
Samir Desai CBE 8,388,206 2,150,000 192,570 — 10,730,776 n/a
Eric Daniels — — — — — n/a
Geeta Gopalan 33,216 — — — 33,216 n/a
Helen Beck 9,235 — — — 9,235 n/a
Matthew King 15,400 — — — 15,400 n/a
Hendrik Nelis — — — — — n/a
Neil Rimer — — — — — n/a
1. Samir Desai CBE stepped down from the Board on 25 October 2024. Share interests are listed as of this date.
2. Includes shares owned by connected persons.
Note: Between the year end and the date of this Annual Report and Accounts, there has been no movement in current Directors’ Shareholdings from that
shown above.
The Company’s share ownership requirements are that Executive Directors shall (subject to personal circumstances)
build and maintain a shareholding equivalent to at least 200% of salary over five years from their appointment
(increasing to 250% of salary for the CEO in 2025). At the end of the 2024 financial year, the CEO (who was appointed
to the Board on 1 January 2022), held 1,055,766 shares, equal to 332% of salary (which includes unexercised awards on
a net of tax basis) based on the three-month average share price to 31 December 2024 of 133.3p. The CFO (who was
appointed to the Board on 15 June 2020), held 626,406 shares, equal to 199% of salary (which includes unexercised
awards on a net of tax basis) based on the three month average share price to 31 December 2024 of 133.3p. Unvested
awards subject to performance conditions are not taken into account in the assessment of the shareholding until such
time as they vest.
Funding Circle Holdings plc | Annual Report and Accounts 2024106
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Table of Directors’ vested and unvested share awards (audited)
Award type
1
Date of grant
No. of
awards at
1 January
2024
Awards
granted
in the year
Awards
lapsed
in the year
Awards
vested
in the year
Awards
exercised
in the year
No. of
awards at
31 December
2024
Date of
vesting/end of
performance
period
Exercise
price
Market
price
on
exercise
Executive Directors
Lisa Jacobs
2018 LTIP
29/11/2019 250,000 — — — — 250,000 11/03/2020 £0.00 n/a
18/03/2020 162,500 — — — — 162,500 12/03/2022 £0.00 n/a
26/03/2021 173,642 — — — — 173,642 26/03/2023 £0.00 n/a
Restricted
Shares
24/03/2022 358,177 — — — — 358,177 24/03/2025 £0.00 n/a
30/03/2023 358,177 — — — — 358,177 30/03/2026 £0.00 n/a
16/5/2024 — 1,006,191 — — — 1,006,191 16/5/2027 £0.00 n/a
2021 Deferred
bonus plan
2
30/3/2023 166,110 — — — — 166,110 30/3/2026 £0.00 n/a
26/3/2024 — 303,106 — — — 303,106 26/3/2027 £0.00 n/a
Share
Incentive Plan
03/11/2020 4,646 — — — — 4,646 15/04/2022 £0.00 n/a
05/05/2021 2,341 — — — — 2,341 05/05/2023 £0.00 n/a
20/04/2022 4,814 — — 4,814 — 4,814 20/04/2024 £0.00 n/a
16/06/2022 3,005 — — 3,005 — 3,005 16/06/2024 £0.00 n/a
17/6/2024 — 4,370 — — — 4,370 17/6/2026 £0.00 n/a
Unapproved 09/05/2018 150,000 — — — — 150,000 01/03/2022 £0.44 n/a
Oliver White
Share
Incentive Plan
03/11/2020 4,991 — — — — 4,991 15/04/2022 £0.00 n/a
18/01/2021 3,967 — — — — 3,967 18/01/2023 £0.00 n/a
20/04/2022 4,814 — — 4,814 — 4,814 20/04/2024 £0.00 n/a
16/06/2022 3,005 — — 3,005 — 3,005 16/06/2024 £0.00 n/a
17/6/2024 — 4,372 — — — 4,372 17/6/2026 £0.00 n/a
2020 bonus
buyout
26/03/2021 71,237 — — — — 71,237 26/03/2022 £0.00 n/a
Restricted
Shares
19/05/2021 269,306 — — 269,306 — 269,306 19/05/2024 £0.00 n/a
24/03/2022 269,306 — — — — 269,306 24/03/2025 £0.00 n/a
30/03/2023 269,306 — — — — 269,306 30/3/2026 £0.00 n/a
16/5/2024 — 736,521 736,521 16/5/2027 £0.00 n/a
2021 Deferred
bonus plan
2
21/04/2022 147,533 — — — — 147,533 21/04/2025 £0.00 n/a
30/03/2023 124,895 — — — — 124,895 30/03/2026 £0.00 n/a
26/3/2024 — 225,987 — — — 225,987 26/03/2027 £0.00 n/a
Non-Executive Directors
Andrew Learoyd
18/6/2015 100,000 — — — 100,000 — 18/06/2015 £0.31 £0.41Unapproved
Samir Desai CBE
Unapproved 13/06/2018
2,150,000
— — — — 2,150,000 01/06/2020 £0.00 n/a
2021 Deferred
bonus plan 21/04/2022 192,570 — — — — 192,570 21/04/2025 £0.00 n/a
Eric Daniels
Unapproved 09/09/2016 187,50 0 — — — 187,500 — 01/03/2016 £0.39 £1.25
1. Other than in certain circumstances as set out in the Remuneration Policy on page 98 (e.g. on termination of employment or change of control), vested
unapproved options can be exercised during a period of ten years from the date of grant.
2. 2023 bonus deferrals: 40% of Lisa Jacobs’ bonus (£107.2k) was deferred into nil cost options for three years on 26 March 2024, using a 3-month average share
price of 35.36p. 40% of Oliver White’s bonus (£79.9k) was deferred into nil cost options for three years on 26 March 2024, using a 3-month average share price
of 35.36p.
Funding Circle Holdings plc | Annual Report and Accounts 2024 107
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annual report on remuneration continued
Payments for loss of office (audited)
After nearly 5 years, Oliver White stood down from his role as CFO on 31 Dec 2024, following a successful transition
period. The Committee took into account Oliver’s commitment and significant contribution to the business over the
course of 2024, including the successful sale of the US business, and a reorganisation of the UK business, alongside
the delivery of the key strategic objectives of the business. Oliver will be treated as a good leaver and his unvested
Restricted Share awards will be time-prorated and vest on their original vesting dates, subject to the relevant
underpins. Any unvested deferred bonus share awards will vest in full on their original vesting date. Any unvested
matching shares granted under our all-employee Share Incentive Plan lapsed in full, in line with the plan rules. Oliver
remained eligible for a 2024 bonus having been in office for the full financial year. The bonus outcome is as described
above and it will be paid fully in cash in line with our policy. He will not receive any other payments linked to his exit.
Payments to former Directors (audited)
There were no payments made to former Directors during the year.
Performance graph
The chart below illustrates the Company’s TSR performance compared with that of the FTSE AllShare Index. This index
has been chosen as the Company is a constituent and it is considered the most appropriate benchmark against which
to assess the relative performance of the Company. The chart shows the value of £100 invested in Funding Circle at
the IPO offer price of £4.40 per share on 28 September 2018 compared with the value of £100 invested in the FTSE
AllShare Index on that date to the end of each subsequent financial year.
CEO remuneration table
The table below sets out the CEO’s single figure of total remuneration.
£000 2017 2018 2019 2020 2021 2022 2023 2024
CEO
Samir
Desai CBE
Samir
Desai CBE
Samir
Desai CBE
Samir
Desai CBE
Samir
Desai CBE
Lisa
Jacobs
Lisa
Jacobs
Lisa
Jacobs
CEO total remuneration
1
204 4,081 211 201 629 661 701 1,407
Annual bonus payout (% maximum)
2
n/a n/a n/a n/a 78.4% 45.0% 48.9% 85.4%
Long-term incentives (% maximum)
3
n/a n/a n/a n/a n/a n/a n/a 100%
1. The 2018 figure includes share options that were granted prior to IPO which were subject to continued employment only. In 2021 Samir Desai waived his salary
increase from £210,000 to £400,000.
2. Samir Desai CBE did not participate in any bonus from 2016 to 2020.
3. Samir Desai CBE did not participate in any long-term incentive. Lisa Jacobs’ first long-term incentive opportunity as CEO was the Restricted Share award made
in March 2022 with the first vesting in March 2025.
Relative importance of spend on pay
The table below sets out our relative importance of spend on pay. There have been no dividends paid to date.
Net Income and Profit Before Tax (PBT) have been presented as these are two key performance measures used by the
Directors in assessing Funding Circle’s performance.
2024 2023 % Change
Net income £160.1m £130.1m 23.1%
Profit before tax £3.4m (£9.9m) (134.3%)
People costs £68.1m £65.5m 4.0%
Average number of employees 721 756 (4.6%)
0
20
40
60
80
100
120
31 Dec 2018 31 Dec 2019 31 Dec 2020
Funding Circle plc FTSE AllShare Index
31 Dec 2021 31 Dec 2022 31 Dec 2023
Funding Circle Holdings plc | Annual Report and Accounts 2024108
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Percentage change in Directors’ remuneration compared with employees
The table below sets out the annual percentage change in remuneration from 2019 to 2024 for each individual who was
a Director during 2024, compared to that for an average employee. Data for former Directors during this timeframe can
be found in the relevant Directors’ Remuneration Reports spanning their tenure.
Salary/fees
1
Benefits Annual bonus
2023
to
2024
2022
to
2023
2021
to
2022
2020
to
2021
2019
to
2020
2023
to
2024
2022
to
2023
2021
to
2022
2020
to
2021
2019
to
2020
2023
to
2024
2022
to
2023
2021
to
2022
2020
to
2021
2019
to 2020
Executive Directors
Lisa Jacobs
2
+2.7% +2.9% n/a n/a n/a +3.4% +2.7% n/a n/a n/a +79.3% +12.0% n/a n/a n/a
Samir Desai CBE
(CEO) n/a n/a n/a +5% -5% n/a n/a n/a 33.6%
3
0% n/a n/a n/a n/a n/a
Oliver White
4
+2.5% +2.1% — — n/a +2.1% +1.7% -22% +8.4% n/a +79.0% +11.1% -43.7% n/a n/a
Non-Executive Directors
Andrew Learoyd +0% +0.6% +2.9% +5% -100% -100% n/a n/a n/a n/a n/a n/a n/a n/a n/a
Samir Desai CBE
(NED) -17.7% — n/a n/a n/a — — n/a n/a n/a n/a n/a n/a n/a n/a
Eric Daniels 70.5% +1.2% +6.4% +5% -5% -82.1% -91.9% +21% n/a -100% n/a n/a n/a n/a n/a
Geeta Gopalan — +1.1% +11% +15% -5% — n/a n/a n/a n/a n/a n/a n/a n/a n/a
Helen Beck
5
— +1.2% +6.4% n/a n/a — n/a n/a n/a n.a n/a n/a n/a n/a n/a
Matthew King
6
— +3.7% +39.3% n/a n/a — n/a n/a n/a n/a n/a n/a n/a n/a n/a
Hendrik Nelis
7
n/a n/a n/a n/a n/a — n/a n/a n/a n/a n/a n/a n/a n/a n/a
Neil Rimer
7
n/a n/a n/a n/a n/a — n/a n/a n/a n/a n/a n/a n/a n/a n/a
Average employee
8
+0.9% +3.4% 8.7% -13.3% -1.7% -17.3% +7.3% -4.0% +8.7% +1.8% -9.1% 7.0% +3.3% +17.1% +61.2%
1. The Board and the Executive Committee (then Global Leadership Team) voluntarily reduced their salaries and fees by 20% over the period March to May 2020 in
response to the Covid-19 pandemic. This is the reason for the change in salaries and fees from 2019 to 2021 shown above. No Director received a salary or fee
increase during 2020 or 2021. Samir Desai CBE, as CEO, waived his salary increase for 2021.
2. Lisa Jacobs was appointed to the Board on 1 January 2022.
3. Samir Desai’s CBE benefits did not include a pension contribution or cash in lieu which he waived his right to.
4. Oliver White was appointed to the Board on 15 June 2020.
5. Helen Beck was appointed to the Board on 1 June 2021. For the comparison of 2021 to 2022, Helen’s 2021 fee has been annualised to permit meaningful
comparison. The increase reported in the table above reflects the increase in 2022 in the additional fee payable for chairing the Remuneration Committee.
6. Matthew King was appointed to the Board on 19 May 2021. For the comparison of 2021 to 2022, Matthew’s 2021 fee has been annualised to permit meaningful
comparison. The increase reported in the table above reflects the introduction of an additional fee payable for chairing the Board of Funding Circle Ltd.
7. Hendrik Nelis and Neil Rimer, who are non-independent Non-Executive Directors, have waived their entitlement to a fee.
8. The annual percentage change of the average remuneration of the Company’s employees, calculated on a full-time equivalent basis.
CEO pay ratio
Funding Circle is committed to remunerating its employees fairly and competitively. We calculate our CEO pay ratio
using the prescribed Methodology A, as shown in the table below. Methodology A was selected as this is considered
the most accurate approach and is generally the preferred approach by shareholders and proxy agencies.
Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2024 Option A 34.9 21.9 13.6
2023 Option A 18.1 11.8 7.4
2022 Option A 17.6 11.3 7.0
2021 Option A 18.4 11.6 6.9
2020 Option A 5.8 3.8 2.3
2019 Option A 6.8 3.9 2.5
There has been an increase in the CEO pay ratio for 2024 due to Lisa’s bonus paying out higher in 2024 than in 2023
as well as her first vesting of the 2022 Restricted Share award. The Board has confirmed that the median ratio is
consistent with the Company’s wider policies on employee pay, reward and progression.
Funding Circle Holdings plc | Annual Report and Accounts 2024 109
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annual report on remuneration continued
CEO pay ratio continued
Total pay and benefits used to calculate the ratios
The table below sets out the UK employee percentile pay and benefits used to determine the above pay ratios and the
salary component for each figure.
2024 25th percentile Median 75th percentile
Salary component £33,843 £50,159 £83,187
Total pay and benefits £40,218 £64,183 £103,191
The CEO remuneration is the total single figure remuneration for the relevant years and 2023 and 2024 are disclosed
on page 103. The employee total remuneration has been calculated based on the amount paid or receivable for the
relevant years. The calculations for the UK employees were performed as at the final day of the relevant financial year.
Implementation of the Remuneration Policy for the year ended 31 December 2025
Salary
The Committee believes the CEO salary should be increased to £475k. Following shareholder consultations,
considerations on the wider Circler salary increase and our culture, as well as input from the CEO herself, this increase
will be phased over two years. In 2025 the Committee will increase Lisa Jacob’s salary to £450k, which represents
an increase of 6.0% on her current salary, and 4.5% on the proposed 2024 base salary which she decided to waive.
This new salary is still low relative to the market, however when combined with variable pay opportunities positions
the total remuneration package at a competitive level, but more heavily weighted towards the performance-related
elements. The Committee intends to increase her salary by a further 5.6% on 1 March 2026 to £475,000. Tony Nicol
was appointed CFO on 1 January 2025 on a salary of £350,000. The salary budget for other Circlers in 2025 is 3.5%.
1 March
2024
1 March
2025 % change
Lisa Jacobs £424,350 £450,000 6.0%
Tony Nicol n/a £350,000 n/a
Annual bonus
The maximum opportunity for the CEO is 150% of salary and for the CFO is 100% of salary. In line with 2024, we will
base the annual bonus 70% on financial measures, which will continue to be 35% on revenue and 35% on profit, and
30% on strategic/non-financial measures.
Up to 40% of any bonus earned will be deferred into shares for three years. The deferral applied by the Committee
will reflect whether the Executive Directors have met their shareholding requirement at the time of the bonus payment,
provided that the Committee still has sufficient ability to exercise malus and clawback provisions. A level of deferral
will always apply (e.g. 20%). The Board considers the actual targets for 2025 to be commercially sensitive at this time,
however, we will provide retrospective disclosure of these targets in next year’s report.
FC PSP
In line with the typical opportunities as set out in the proposed Policy, the CEO award will be 350% of salary and the
CFO award will be 250% of salary. The 2024 awards will be granted following shareholder approval of the new Policy at
the AGM in May. The Committee retains discretion to ensure the actual grant, which will be disclosed when awards are
granted and in next year’s report, reflects the latest available information prior to grant.
The vesting of the FC PSP awards will be subject to performance measures. These measures will be relative Total
Shareholder Returns (rTSR) which will be weighted 60% and Adjusted Profit before Tax (PBT) which will be weighted
40%. The Total Shareholder Returns will be measured against the FTSE 250 excluding Investment Trusts, which reflects
our ambition to enter, and progress through, the FTSE 250. The Adjusted PBT targets for 2027 have been set to reflect
the Board’s ambitions for growth as the business delivers on the strategy. The target range represents an appropriate
level of stretch, with maximum vesting requiring significant outperformance. The threshold and maximum performance
targets are summarised below:
Measure Threshold (25% vesting) Maximum (100% vesting)
rTSR vs. the FTSE 250 excluding Investment Trusts Median TSR ranking Upper quartile TSR ranking
Adjusted PBT in 2027 £20 million £60 million
There will be straight-line vesting in between threshold and maximum performance. As always, the Committee will
consider overall performance in determining any vesting of awards (including share price appreciation).
Any vested awards will remain subject to a two-year post-vesting holding period.
Funding Circle Holdings plc | Annual Report and Accounts 2024110
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Benefits and pension contributions
In line with our Policy, the benefits offered to Executive Directors are in line with those available to other employees in
the Group. The Executive Directors, and all UK Circlers, are eligible to receive a pension contribution and/or cash in lieu
of 5% of salary.
Non-Executive Director and Chair fees
Fee 2024 2025
Chair fee £207,000 £220,000
1
Non-Executive Director base fee
2
£55,000 £60,000
Senior Independent Director fee £10,000 £10,000
Remuneration Committee Chair fee £15,000 £15,000
Combined Audit and Risk Committee Chair fee
3
£15,000 £25,000
ESG Committee (or any similar committee appointed by the Board) n/a £5,000
1. Ken Stannard will receive a prorated fee of £220,000 following his appointment as Funding Circle Chair if approved at the 2025 AGM. Up until that date
Ken Stannard will receive a prorated Non-Executive Director base fee. Andrew Learoyd continues to receive £207,000 until he steps down at the 2025 AGM.
2. The Non-Executive Director base fee will be increased to £60,000 in 2025. This is the first increase to base fees since IPO in 2018. Hendrik Nelis and Neil Rimer,
who are non-independent Non-Executive Directors, have waived their entitlement to a fee.
3. The Audit and Risk Committees are currently combined, and the Chair will therefore receive a combined fee of £25,000. If the Audit and Risk Committees were
standalone, the respective Committee Chairs would receive the standard fee of £15,000 each.
How our remuneration is aligned with the principles of the code
Alignment to strategy and culture
l The design of remuneration at Funding Circle is aligned to our values,
culture and strategy.
l The annual bonus is based on financial and strategic performance
promoting collective accountability and helps to align the Executive
Directors’ incentive structure with the wider Group.
l Performance share awards fully align with our remuneration philosophy of
ensuring that senior management are significant share owners, promoting
good stewardship and incentivising Executive Directors to create long term
value as the business continues to mature.
Clarity and simplicity
l Our Policy aligns the Executive Directors’ pay with pay for other Circlers.
l Our Policy is simple to understand for participants and shareholders and
promotes long term stewardship.
Risk
l Our Policy appropriately balances fixed and variable pay as well as short-
and long-term incentives.
l Opportunities are set at a level which rewards performance at the same
time as not unduly encouraging excessive risk taking.
l The annual bonus and performance share awards are subject to malus
and clawback provisions and the Committee has the discretion to adjust
pay outcomes.
Proportionality
l A significant portion of the total remuneration opportunity for Executive
Directors is variable pay. This variable pay is aligned to Company strategy
through the choice of performance measures and the link to share price.
l Our Policy is clear on the threshold, target and maximum levels of pay that
Executives can earn. Notwithstanding that actual outcomes will vary based
on the level of achievement and share price performance.
This report has been prepared in accordance with the Companies Act 2006, Schedule 8 of the Large and Medium-
sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended), the 2018 UK Corporate
Governance Code and the UK Listing Authority’s Listing Rules.
Funding Circle Holdings plc | Annual Report and Accounts 2024 111
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Report of the Directors
for the year ended 31 December 2024
The Directors present their report (the “Directors’ Report”) and the Annual Report and Accounts for the year ended
31 December 2024.
Information required to be part of the Directors’ Report either by statute, by UK Listing Rule 6.6 or by the DTRs can
be found either in this section or elsewhere in this document, as indicated in the table below. All information located
elsewhere in this document is incorporated into this Directors’ Report by reference:
Section of Annual Report Page reference
Information required by UKLR6.6/DTRs
Corporate Governance Statement Corporate Governance Statement (page 75)
Going Concern and Viability Statement Viability statement (pages 63 to 64)
Directors’ interests Remuneration Report (page 106) and Directors’ Report (page 112)
Long-term incentive schemes Remuneration Report (page 95)
Waiver of emoluments Remuneration Report (pages 90 to 111)
Powers for the Company to buyback its shares Directors’ Report (page 113)
Allotment of shares during the year Note 17 to the consolidated financial statements (page 167)
Significant shareholders Directors’ Report (page 114)
Related party agreements Note 25 to the consolidated financial statements (page 175)
Diversity policy Strategic Report (page 22)
Climate-related financial disclosures Environment, social and governance (“ESG”) (pages 24 to 39)
Statutory information
Stakeholder engagement Strategic Report – Engaging our stakeholders (pages 40 to 43). See also
Board decision making and section 172 duties on pages 72 to 73 of the
Corporate Governance Report.
Employee engagement Strategic Report – Engaging our stakeholders (pages 40 to 43) and Our
people (pages 20 to 23). See also Board decision making and section
172 duties on pages 72 to 73 of the Corporate Governance Report.
Policy concerning the employment of disabled
persons
Strategic Report – Our people (page 23)
Financial instruments Note 16 to the financial statements (pages 154 to 167)
Future developments of the business Strategic Report (pages 1 to 64)
Greenhouse gas emissions, energy consumption
and energy efficiency action
Strategic Report – Environment, social and governance (pages 24 to 39)
Significant agreements Directors’ Report (page 112)
Non-financial reporting Strategic Report – see below
Management Report
This Directors’ Report, together with the Strategic Report
on pages 1 to 64, forms the Management Report for the
purposes of DTR 4.1.5R.
Strategic Report
Section 414A of the Companies Act 2006 (the “Act”)
requires the Directors to present a Strategic Report in
the Annual Report and Accounts. The information can be
found on pages 1 to 64.
The Company has chosen, in accordance with section
414C (11) of the Act and as noted in this Directors’ Report,
to include certain matters in its Strategic Report that
would otherwise be disclosed in this Directors’ Report.
Section 414C of the Act requires the Company to include
within its Strategic Report a non-financial sustainability
information statement setting out such information as is
required by section 414CB of the Act. Such information
is set out in the ESG section on pages 24 to 39, the Our
business model section on pages 8 to 9, Our strategy
section on pages 10 to 11, our KPIs on page 11 to 12, and
the Risk management and Going concern and Viability
Statement sections on pages 51 to 64.
Directors and their interests
Biographies of the Directors currently serving on the
Board are set out on page 68 to 69. Our Articles of
Association provide that all our Directors must stand
for re-election by shareholders at each AGM.
Details of Directors’ service contracts are set out in
the Directors’ Remuneration Report on page 102. The
interests of the Directors in the shares of the Company
are also shown on page 106 of that report. In the period
between 1 January 2025 and the date of this report, there
were no additional ordinary shares allotted to Lisa Jacobs
or Tony Nicol under the Company’s Share Incentive Plan.
In line with the requirements of the Act, each Director has
notified the Company of any situation in which they have,
or could have, a direct or indirect interest that conflicts, or
possibly may conflict, with the interests of the Company
(a situational conflict). The Board has formal procedures
to deal with Directors’ conflicts of interest.
Geeta Gopalan is a Director of Intrum AB, which provides
servicing to Funding Circle’s European subsidiaries.
None of the Directors has a material interest in any significant
contract with the Company or any member of its Group.
Funding Circle Holdings plc | Annual Report and Accounts 2024112
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Insurance and indemnities
The Company maintains appropriate insurance to
cover Directors’ and Officers’ liability for itself and its
subsidiaries. In addition, the Company indemnifies
each Director under a separate deed of indemnity.
The Company also indemnifies each Director under its
Articles of Association. Such indemnities are qualifying
indemnities for the purposes of, and permitted under,
section 234 of the Act.
Results and dividends
The Group’s and the Company’s audited financial
statements for the year are set out on pages 124 to 192.
The Directors do not recommend payment of a final
dividend for 2025 (2024: £nil).
Authority to allot or purchase the Company’s shares
The Articles permit the Directors to issue or approve the
purchase by the Company of its own shares, subject to
obtaining shareholders’ prior approval. The authority to
issue or buy back shares will expire at the 2025 AGM,
and it will be proposed at the meeting that the Directors
be granted new authorities to issue and buy back
shares. The Directors currently have authority to approve
the Company’s purchase of up to 54,085,678 of the
Company’s ordinary shares. The Company announced a
share buyback programme on 7 March 2024 to buy up
to £25 million worth of shares and a further programme
for up to £25 million was announced on 16 October 2024.
As at 31 December 2024, the Company made market
purchases of 33,548,734 ordinary shares of nominal
value of £0.001 in the Company, of which 181,370 were
pending cancellation at 31 December 2024, representing
9.29% of the issued share capital and all shares were
cancelled. The total cost of the market purchases was
£33.4 million (excluding stamp duty and broker fees)
with the weighted average purchase price of each share
being £1.16.
The trustee of the Company’s Employee Benefit Trust
made no market purchases of ordinary shares. As at
the date of this report, the trustee holds 2.10% of the
Company’s issued share capital.
Share capital
The Company’s issued share capital comprises
ordinary shares of £0.001, each of which is listed on
the London Stock Exchange. The issued share capital
of the Company as at 31 December 2024 comprises
327,935,779 ordinary shares of £0.001 each. Further
information regarding the Company’s issued share capital
can be found on page 167 of the financial statements.
Rights attaching to shares
All shares have the same rights (including voting and
dividend rights and rights on a return of capital) and
restrictions as set out in the Articles, described below.
Except in relation to dividends and rights on a liquidation
of the Company, the shareholders have no rights to share
in the profits of the Company. The Company’s shares
are not redeemable. However, following any grant of
authority from shareholders, the Company may purchase
or contract to purchase any of the shares on or off
market, subject to the Act and the requirements of the
UK Listing Rules.
Voting rights
All members who hold ordinary shares are entitled to
attend and vote at the AGM. On a show of hands at a
general meeting, every member present in person shall
have one vote and on a poll, every member present in
person or by proxy shall have one vote for every share
of which he or she is the holder. No shareholder holds
ordinary shares carrying special rights relating to the
control of the Company and the Directors are not aware
of any agreements between holders of the Company’s
shares that may result in restrictions on voting rights.
Shares held by the Company’s Employee Benefit Trust rank
pari passu with the shares in issue and have no special
rights. Voting rights and rights of acceptance of any offer
relating to shares held in trust rest with the Trustees and
are not exercisable by employees, although the Trustees
will not automatically exercise such rights arising from
allocated shares unless directed by the Company.
Restrictions on transfer of securities
The Articles do not contain any restrictions on the
transfer of ordinary shares in the Company other than the
usual restrictions applicable where any amount is unpaid
on a share. All issued share capital of the Company at
the date of this report is fully paid. Certain restrictions
are also imposed by laws and regulations (such as insider
dealing and market requirements relating to closed
periods) and requirements of the Disclosure Guidance
and Transparency Rules, as well as the Company’s own
dealing codes, whereby Directors, persons connected
to the Directors and certain employees of the Company
require approval to deal in the Company’s securities.
Change of control
Certain LTIP Awards held by members of the ExCo
(excluding the Executive Directors) contain additional
protections in the event of termination of employment due
to a takeover bid where such termination is deemed to
be connected with the change of control. Save in respect
of these awards, there are no agreements between the
Company and its Directors or employees providing for
compensation for loss of office or employment (whether
through resignation, purported redundancy or otherwise)
because of a takeover bid.
The Group is party to a limited number of funding and
servicing agreements that include change of control
provisions which, in the event of a change of control
undertaken not in compliance with the procedural
requirements of the relevant arrangement, could result in
the termination of further loan origination and termination
of servicing by the Group under the affected arrangement.
In addition, the Group participates in one or more lending
schemes that benefit from a form of government-backed
guarantee and it is expected that, in the event of a change
of control of the Company, the consent of the relevant
loan guarantor would be required to enable the Group’s
continued participation in those schemes.
Funding Circle Holdings plc | Annual Report and Accounts 2024 113
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Significant shareholdings
As at 31 December 2024 and at the date of this report, the Company has been notified pursuant to DTR5.1, or
is otherwise aware via our registrar, of the following significant interests in the issued ordinary share capital of
the Company:
Name of shareholder
Number
of ordinary
shares as at
31 December
2024
Percentage
issued share
capital as at
31 December
2024
Number
of ordinary
shares as at
6 March
2025
Percentage
issued capital
as at
6 March
2025
Index Ventures 58,618,351 17.88 58,618,351 18.07
Aktieselskabet af 2.7.2018 47,067,936 14.36 47,067,936 14.51
Accel London Management 26,906,743 8.21 26,906,743 8.29
Schroder Investment Management 24,963,260 7.60 26,448,592 8.15
DST Managers 16,505,378 5.04 16,505,378 5.09
Capital Group 14,713,073 4.49 14,713,073 4.53
BlackRock 13,995,821 4.27 12,647,423 3.90
Research and development
The Group invests in the research and development
of technology and software products that enable the
Group to achieve its key performance objective of
growing lending to SMEs whilst delivering resilient returns
to investors.
Political donations
There were no political donations made during the year
or the previous year.
External branches
The Company has subsidiaries in the United Kingdom,
Germany, and the Netherlands and has one UK branch
of the Dutch entity and four UK branches of the
German entities.
External auditors
PwC have confirmed their willingness to continue as
external auditors and a resolution to reappoint them
as the Company’s external auditors, and to authorise
the Directors to fix the auditors’ remuneration, will be
proposed at the 2025 AGM.
Statement of disclosure of information to auditors
Each of the persons who is a Director at the date of
approval of this report confirms that:
l so far as the Director is aware, there is no relevant audit
information of which the Company’s external auditors
are unaware; and
l the Director has taken all the steps that they ought to
have taken as a Director in order to make themselves
aware of any relevant audit information and to
establish that the Company’s auditors are aware of
that information.
This confirmation is given and should be interpreted in
accordance with the provisions of section 418 of the Act.
Voting results final update – 2024 AGM
At the Company’s AGM, held on 15 May 2024, 20%
or more votes were cast against Resolutions 17
(general disapplication of pre-emption rights) and 18
(disapplication of pre-emption rights in connection with
an acquisition or specified capital investment). These
were special resolutions requiring a 75% majority, which
did receive sufficient support to be passed, receiving
votes in favour of 78.52% respectively. However, a
significant number of votes (21.48%) were against
both resolutions.
As per provision 4 of the Code, on 14 November 2024,
the Company provided an update on its engagement
with shareholders to better understand the reasons
why the above resolutions were voted against. The
Company understands that these votes reflected, among
other things, the voting policy of certain shareholders
and the potential for dilution especially in the absence
of a specific transaction for which the authority
would be used.
2025 AGM
The Company’s AGM will take place at 12:00 pm on
15 May 2025 at the Company’s offices at 71 Queen
Victoria Street, London EC4V 4AY.
A separate circular, comprising a letter from the Chair
of the Board, Notice of Meeting and explanatory notes
on the resolutions being proposed, has been circulated
to shareholders and is available on our website,
https://corporate.fundingcircle.com/investors/
shareholder-meetings.
Report of the Directors continued
for the year ended 31 December 2024
Funding Circle Holdings plc | Annual Report and Accounts 2024114
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law
the Directors have prepared the Group and Company
financial statements in accordance with UK-adopted
international Accounting Standards.
Under company law, Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Group and Company and of the profit or loss of the Group
for that period. In preparing the financial statements, the
Directors are required to:
l select suitable accounting policies and then apply
them consistently;
l state whether applicable UK-adopted International
Accounting Standards have been followed, subject to
any material departures disclosed and explained in the
financial statements;
l make judgements and accounting estimates that are
reasonable and prudent; and
l prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and Company will continue in business.
The Directors are also responsible for safeguarding the
assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group’s and Company’s transactions and
disclose with reasonable accuracy at any time the
financial position of the Group and Company and
enable them to ensure that the financial statements and
the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance
and integrity of the Company’s website. Legislation
in the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and
Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Group’s and Company’s
position and performance, business model and strategy.
Each of the Directors, whose names and functions are
listed in the Report of the Directors confirm that, to the
best of their knowledge:
l the Group and Company financial statements, which
have been prepared in accordance with UK-adopted
International Accounting Standards, give a true and
fair view of the assets, liabilities and financial position
of the Group and Company, and of the profit of the
Group; and
l the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Group and Company, together with a
description of the principal risks and uncertainties that
they face.
Approved by the Board and signed on its behalf.
Chief Executive Officer
6 March 2025
Funding Circle Holdings plc | Annual Report and Accounts 2024 115
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Financial
statements
117 Independent auditors’ report
124 Consolidated statement of comprehensive
income
125 Consolidated balance sheet
126 Consolidated statement of changes in equity
127 Consolidated statement of cash flows
128 Notes forming part of the consolidated
financial statements
180 Company balance sheet
181 Company statement of changes in equity
182 Company statement of cash flows
183 Notes forming part of the Company financial
statements
193 Alternative performance measures
194 Glossary
197 Shareholder information
198 Company information
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024116
Funding Circle Holdings plc | Annual Report and Accounts 2024 117
Independent auditors’ report
to the members of Funding Circle Holdings plc
Report on the audit of the financial statements
Opinion
In our opinion, Funding Circle Holdings plc’s Group
financial statements and Company financial statements
(the “financial statements”):
l give a true and fair view of the state of the Group’s and
of the Company’s affairs as at 31 December 2024 and
of the Group’s profit and the Group’s and Company’s
cash flows for the year then ended;
l have been properly prepared in accordance with UK-
adopted international accounting standards as applied
in accordance with the provisions of the Companies
Act 2006; and
l have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements, included within
the Annual Report and Accounts (the “Annual Report”),
which comprise: the Consolidated and Company balance
sheet as at 31 December 2024; the Consolidated
statement of comprehensive income, the Consolidated
and Company statement of changes in equity and the
Consolidated and Company statement of cash flows
for the year then ended; and the notes to the financial
statements, comprising material accounting policy
information and other explanatory information.
Our opinion is consistent with our reporting to the Audit
and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities under ISAs (UK) are further
described in the Auditors’ responsibilities for the audit of
the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes
the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare
that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
Other than those disclosed in note 6, we have provided
no non-audit services to the Company or its controlled
undertakings in the period under audit.
Our audit approach
Overview
Audit scope
l The scope of our audit and the nature, timing and
extent of audit procedures performed were determined
by our risk assessment.
l We identified the Term Loans business as a significant
component and as a result it was subject to a full scope
audit. We identified three non-significant components
(FlexiPay business, US business and Parent entity) and
applied judgment in determining the extent of audit
testing to be performed over each. Audit testing over
specific balances has been completed for FlexiPay
based on either size or risk profile and specified audit
procedures were performed over the US business
(up to the point of sale) to address identified risks
of material misstatement. A full scope audit was
performed over the parent entity given the Company
accounts are included within the Annual Report.
Key audit matters
l The allowance for expected credit losses in relation
to FlexiPay lines of credit (Group)
l Carrying value of the investment in FCL (parent)
Materiality
l Overall Group materiality: £1,617,500 (2023:
£1,622,000) based on 1% of total income.
l Overall Company materiality: £3,560,000 (2023:
£3,592,000) based on 1% of total assets.
l Performance materiality: £1,213,125 (2023: £1,216,500)
(Group) and £2,670,000 (2023: £2,694,000)
(Company).
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the
audit of the financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified
by the auditors, including those which had the greatest
effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the
engagement team. These matters, and any comments
we make on the results of our procedures thereon, were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
This is not a complete list of all risks identified by
our audit.
Carrying value of the investment in FCL (parent) is a
new key audit matter this year. Carrying value of the
Company’s investment in the US subsidiary (parent) and
Valuation of SME loans (securitised) and investments in
RLS/CBILs trusts, which were key audit matters last year,
are no longer included because of the sale of the US
business and, in relation to the loans and investments,
continued amortisation of the remaining portfolios
through the year. Otherwise, the key audit matters below
are consistent with last year.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024118
Key audit matter How our audit addressed the key audit matter
The allowance for expected credit losses in
relation to FlexiPay lines of credit (Group)
Refer to Report of the Audit Committee – Key audit
matters considered in relation to the financial
statements; note 1 (material accounting policies);
note 2 (critical accounting judgements and key
sources of estimation uncertainty); and note 16
(financial risk management) of the Group
financial statements.
At 31 December 2024 the gross carrying value of
FlexiPay lines of credit was £110.0 million and the
associated allowance for expected credit losses
was £12.9 million on drawn lines of credit and
£2.7 million on undrawn lines of credit.
The determination of the allowance for expected
credit losses is subjective and judgmental. A model
is used to collectively determine the allowance for
expected credit losses for both the drawn and
undrawn lines of credit. The key assumptions and
inputs into this model are the probability of default,
loss given default and the use of multiple,
probability weighted, macroeconomic scenarios.
As a new product, FlexiPay continues to be a
strategic priority for the business. Given this, along
with continued evolution of the ECL model in the
year, the corresponding provision for expected
credit losses was a focus of our audit.
Together with our credit risk specialists, we performed the following
substantive procedures over the allowance for expected credit losses
on FlexiPay lines of credit:
l we engaged our credit risk specialists to review the methodology
and assumptions applied by management in calculating the
allowance for expected credit losses;
l we independently tested the derivation of key assumptions,
and tested that the model methodology has been implemented
as intended;
l we performed sensitivity analysis to understand and evaluate
the impact of conceptual limitations and key judgments used
in management’s ECL calculation. This included building a
challenger macro-economic default rate model to test the
sensitivity of the ECL to macro scenarios;
l we assessed macro-economic forecasts and weightings used
in the model by benchmarking to independent forecasts,
and evaluating the reasonableness of judgements applied by
management; and
l we tested the accuracy of the historical loan tape used as a key
input into the credit loss model including customer utilisation
and performance.
We also assessed the disclosures in note 2, regarding the critical
accounting judgements and key sources of estimation uncertainty
involved in determining the expected credit loss provision and found
them to be appropriate.
Based on the evidence obtained, we concluded that the methodologies,
modelled assumptions and management judgements in determining the
allowance for expected credit losses for FlexiPay lines of credit to be
appropriate and compliant with the requirements of IFRS 9.
Carrying value of the investment in FCL (Parent)
Refer to Report of the Audit and Risk Committee
– Key audit matters considered in relation to the
financial statements; note 1 (Investment in
subsidiaries); and note 5 (Investments in subsidiary
undertakings) of the Company financial statements.
The Company holds an investment in FCL with a
carrying value of £258.2 million. IAS 36 ‘Impairment
of Assets’ requires that investments should be
assessed for any indicators of impairment at the
end of each reporting period. Management
performed an assessment for indicators of
impairment and concluded that there were none
in relation to the UK business.
Given the carrying value of the investment is
material and its significance to the Company
balance sheet, the level of uncertainty associated
with the future cash flows associated with the
FlexiPay business and the extent of restructuring
that has occurred in the year this has been an area
of focus in our audit.
Our audit procedures comprised the following:
l We understood the methodology used by management to assess
their investment in subsidiaries for impairment indicators.
l We evaluated the indicators considered by management against
IAS36 requirements and substantiated relevant information
within the assessment of indicators.
l Given the significant change in the business in the year, we
performed sensitivity analysis over certain assumptions, in
particular FlexiPay cash flows, using a discounted cash flow model
to assess the impact on the recoverable value.
Based on the above procedures performed, and evidence
obtained, we considered the Directors’ conclusion that there are no
impairment indicators for the investment in FCL to be reasonable.
Independent auditors’ report continued
to the members of Funding Circle Holdings plc
Report on the audit of the financial statements continued
Our audit approach continued
Key audit matters continued
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 119
Report on the audit of the financial statements
continued
Our audit approach continued
How we tailored the audit scope
We tailored the scope of our audit to ensure that we
performed enough work to be able to give an opinion
on the financial statements as a whole, taking into
account the structure of the Group and the Company,
the accounting processes and controls, and the industry
in which they operate.
1) Audit approach to Funding Circle’s operations: We
performed a risk assessment, giving consideration to
relevant external and internal factors, including economic
risks, climate change, relevant accounting and regulatory
developments, and Funding Circle’s strategy. We also
considered our knowledge and experience obtained in
prior year audits. We designed our audit approach for
the products and services that substantially make up
Funding Circle’s continuing business in the UK in Term
Loans and FlexiPay such as platform lending, marketplace
referrals and the origination of, and investment in, SME
loan portfolios and lines of credit and the discontinued
US business.
2) Audit work for in scope components: The risks of
material misstatement can be reduced to an acceptable
level by testing components that are significant due to
their size and those that drive significant risks identified
as part of our risk assessment. We identified the Term
Loans business as a full scope component due to being
significant due to size. We considered FlexiPay as a non-
significant component and material balances have been
included in our scope for the purpose of the Group audit.
We considered the US business as a non-significant
component and performed specified procedures over
certain balances. Whilst the parent entity is considered
non-significant for the consolidated audit, we have
completed a full scope audit given the Company
accounts are included within the Annual Report. We
assigned materiality levels to components reflecting the
size of their operations. One team performed all audit
work on the components. Through the work performed
we concluded that sufficient appropriate audit evidence
had been obtained as a basis for our opinion on the
Group financial statements as a whole.
3) Audit procedures undertaken at a Group level and
on the Company: In planning and executing our audit
no other component teams were used. We ensured
that appropriate work was undertaken for the Group
and Company.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to
understand the extent of the potential impact of climate
risk on the Group’s and Company’s financial statements,
and we remained alert when performing our audit
procedures for any indicators of the impact of climate
risk. Our procedures did not identify any material impact
as a result of climate risk on the Group’s and Company’s
financial statements.
Materiality
The scope of our audit was influenced by our application
of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative
considerations, helped us to determine the scope of
our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line
items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the
financial statements as a whole.
Based on our professional judgement, we determined
materiality for the financial statements as a whole
as follows:
Financial statements – Group Financial statements – Company
Overall materiality £1,617,500 (2023: £1,622,000). £3,560,000 (2023: £3,592,000).
How we determined it 1% of total income 1% of total assets
Rationale for benchmark applied We consider this to be an appropriate
benchmark as total income is a key
performance indicator for Group
performance and a metric used to guide
analysts as well as a measure to
determine executive compensation.
We consider total assets to be an
appropriate benchmark to apply on the basis
that the Company is a non-trading
investment Company that holds investment
in the Group’s subsidiaries.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024120
Independent auditors’ report continued
to the members of Funding Circle Holdings plc
Report on the audit of the financial statements
continued
Our audit approach continued
Materiality continued
For each component in the scope of our Group audit, we
allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across
components was between £1,536,000 and £1,374,000.
Certain components were audited to a local statutory
audit materiality that was also less than our overall
Group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our
testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes. Our
performance materiality was 75% (2023: 75%) of overall
materiality, amounting to £1,213,125 (2023: £1,216,500)
for the Group financial statements and £2,670,000 (2023:
£2,694,000) for the Company financial statements.
In determining the performance materiality, we considered
a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls - and concluded that an amount at the upper end
of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we
would report to them misstatements identified during
our audit above £80,875 (Group audit) (2023: £81,100)
and £178,000 (Company audit) (2023: £179,615) as well
as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s
and the Company’s ability to continue to adopt the going
concern basis of accounting included:
l obtaining and evaluating management’s going
concern assessment;
l performing a risk assessment to identify factors that
could impact the going concern basis of accounting,
including the impact of external risks such as an
uncertain economic environment and climate change;
l understanding and evaluating management’s financial
forecasts and liquidity and regulatory capital over the
going concern period and an evaluation of the stress
testing performed by management;
l substantiation of financial resources available to the
Group and Company as at the balance sheet date
including the unrestricted cash; and
l reading and evaluating the adequacy of the disclosures
made in the financial statements in relation to
going concern.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Group’s and the Company’s
ability to continue as a going concern for a period of at
least twelve months from when the financial statements
are authorised for issue.
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
However, because not all future events or conditions can
be predicted, this conclusion is not a guarantee as to
the Group’s and the Company’s ability to continue as a
going concern.
In relation to the directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the directors’ statement in the financial statements about
whether the directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the
directors with respect to going concern are described
in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information
in the Annual Report other than the financial statements
and our auditors’ report thereon. The directors are
responsible for the other information. Our opinion on the
financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or,
except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement,
we are required to perform procedures to conclude
whether there is a material misstatement of the financial
statements or a material misstatement of the other
information. If, based on the work we have performed,
we conclude that there is a material misstatement of this
other information, we are required to report that fact. We
have nothing to report based on these responsibilities.
With respect to the Strategic report and Report of the
Directors, we also considered whether the disclosures
required by the UK Companies Act 2006 have
been included.
Based on our work undertaken in the course of the
audit, the Companies Act 2006 requires us also to report
certain opinions and matters as described below.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 121
Report on the audit of the financial statements
continued
Reporting on other information continued
Strategic report and Report of the Directors
In our opinion, based on the work undertaken in the
course of the audit, the information given in the Strategic
report and Report of the Directors for the year ended
31 December 2024 is consistent with the financial
statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the
Group and Company and their environment obtained in
the course of the audit, we did not identify any material
misstatements in the Strategic report and Report of the
Directors.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’
statements in relation to going concern, longer-term
viability and that part of the corporate governance
statement relating to the Company’s compliance with
the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities
with respect to the corporate governance statement as
other information are described in the Reporting on other
information section of this report.
Based on the work undertaken as part of our audit,
we have concluded that each of the following elements
of the corporate governance statement is materially
consistent with the financial statements and our
knowledge obtained during the audit, and we have
nothing material to add or draw attention to in relation to:
l The directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
l The disclosures in the Annual Report that describe
those principal risks, what procedures are in place to
identify emerging risks and an explanation of how these
are being managed or mitigated;
l The directors’ statement in the financial statements
about whether they considered it appropriate to
adopt the going concern basis of accounting in
preparing them, and their identification of any
material uncertainties to the Group’s and Company’s
ability to continue to do so over a period of at least
twelve months from the date of approval of the
financial statements;
l The directors’ explanation as to their assessment of
the Group’s and Company’s prospects, the period
this assessment covers and why the period is
appropriate; and
l The directors’ statement as to whether they have a
reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they
fall due over the period of its assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the directors’ statement regarding the
longer-term viability of the Group and Company was
substantially less in scope than an audit and only
consisted of making inquiries and considering the
directors’ process supporting their statement; checking
that the statement is in alignment with the relevant
provisions of the UK Corporate Governance Code;
and considering whether the statement is consistent
with the financial statements and our knowledge and
understanding of the Group and Company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of
our audit, we have concluded that each of the following
elements of the corporate governance statement is
materially consistent with the financial statements and
our knowledge obtained during the audit:
l The directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced
and understandable, and provides the information
necessary for the members to assess the Group’s
and Company’s position, performance, business
model and strategy;
l The section of the Annual Report that describes the
review of effectiveness of risk management and
internal control systems; and
l The section of the Annual Report describing the work
of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility
to report when the directors’ statement relating to the
Company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the
Code specified under the Listing Rules for review by
the auditors.
Responsibilities for the financial statements and
the audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Statement of Directors’
responsibilities in respect of the financial statements,
the directors are responsible for the preparation of the
financial statements in accordance with the applicable
framework and for being satisfied that they give a true
and fair view. The directors are also responsible for such
internal control as they determine is necessary to enable
the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024122
Independent auditors’ report continued
to the members of Funding Circle Holdings plc
Report on the audit of the financial statements
continued
Responsibilities for the financial statements and
the audit continued
Responsibilities of the directors for the financial
statements continued
In preparing the financial statements, the directors are
responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using
the going concern basis of accounting unless the
directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud, is detailed below.
Based on our understanding of the Group and industry,
we identified that the principal risks of non-compliance
with laws and regulations related to the Financial Conduct
Authority (“FCA”), and we considered the extent to
which non-compliance might have a material effect
on the financial statements. We also considered those
laws and regulations that have a direct impact on the
financial statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities
for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined
that the principal risks were related to bias in accounting
estimates and posting of journal entries. Audit procedures
performed by the engagement team included:
l review of correspondence with, and reports
to, the FCA;
l review of a sample of customer complaints to
identify any indicators of breaches in laws and
regulations or fraud;
l enquiries of the Directors, the Chair of the Audit
and Risk Committee, the Head of Internal Audit and
management, as well as the Group’s Chief Legal
Officer and the Group’s Head of Compliance, including
consideration of known or suspected instances of non-
compliance with laws and regulation and fraud;
l review of board meeting minutes and internal audit
reports issued in the period to identify any indicators
of breaches in laws and regulations and fraud that
could require further investigation;
l identifying and testing journal entries, including those
with unusual account combinations impacting total
income; and
l challenging significant assumptions and judgements
made by management in its accounting estimates and
assessing them for bias.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations
that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of
not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations
of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample
is selected.
A further description of our responsibilities for the
audit of the financial statements is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report
is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 123
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report
to you if, in our opinion:
l we have not obtained all the information and
explanations we require for our audit; or
l adequate accounting records have not been kept by
the Company, or returns adequate for our audit have
not been received from branches not visited by us; or
l certain disclosures of directors’ remuneration specified
by law are not made; or
l the Company financial statements and the part of the
Directors’ remuneration report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from
this responsibility.
Appointment
Following the recommendation of the Audit and Risk
Committee, we were appointed by the directors on 4
August 2015 to audit the financial statements for the
year ended 31 December 2015 and subsequent financial
periods. The period of total uninterrupted engagement is
ten years, covering the years ended 31 December 2015 to
31 December 2024.
Other matter
The Company is required by the Financial Conduct
Authority Disclosure Guidance and Transparency Rules to
include these financial statements in an annual financial
report prepared under the structured digital format
required by DTR 4.1.15R - 4.1.18R and filed on the National
Storage Mechanism of the Financial Conduct Authority.
This auditors’ report provides no assurance over whether
the structured digital format annual financial report has
been prepared in accordance with those requirements.
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
6 March 2025
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024124
Consolidated statement of comprehensive income
for the year ended 31 December 2024
| 31 December | |||||
| 2024 | |||||
| Before | 31 December | ||||
| exceptional | Exceptional | 31 December | 2023 | ||
| items | items 1 | 2024 | (re-presented) 2 | ||
| Note | £m | £m | £m | £m | |
Transaction fees | |||||
Servicing fees | |||||
Interest income 3 | |||||
Other fees | |||||
Operating income | |||||
Net investment income | |||||
Total income | |||||
Fair value gains | |||||
Cost of funds | ( | ( | ( | ||
Net income 4 | 5 | ||||
People costs | 4, 6, 7 | ( | ( | ( | ( |
Marketing costs | 6 | ( | ( | ( | |
Depreciation, amortisation and impairment | 4, 5, 6, 10, 11 | ( | ( | ( | ( |
Expected credit loss charge | 6, 16 | ( | ( | ( | |
Other costs | 6 | ( | ( | ( | |
Operating expenses | 6 | ( | ( | ( | ( |
Profit/(loss) before taxation | 5 | ( | ( | ||
Income tax (charge)/credit | 8 | ( | ( | ||
Profit/(loss) for the year from continuing operations | ( | ( | |||
| (Loss)/profit for the year from discontinued operations | 3 | ( | ( | ||
(Loss)/profit for the year | ( | ( | |||
| Other comprehensive expense | |||||
| Items that may be reclassified subsequently to profit and loss: | |||||
| Exchange differences on translation of foreign operations | 3, 19 | ( | ( | ( | ( |
| – discontinued operations | |||||
Total comprehensive (expense)/income for the year | ( | ( | ( | ||
| Total comprehensive income/(expense) attributable to: | |||||
| Owners of the Parent | |||||
Income/(expense) from continuing operations | ( | ( | |||
(Expense)/income from discontinued operations | 3 | ( | ( | ( | |
Total comprehensive (expense)/income attributable to the owners of the Parent | ( | ( | ( | ||
| Earnings per share | |||||
Basic earnings/(loss) per share from continuing operations | 9 | ( | |||
Diluted earnings/(loss) per share from continuing operations | 9 | ( | |||
Basic (loss)/earnings per share from discontinued operations | 3, 9 | ( | ( | ||
Diluted (loss)/earnings per share from discontinued operations | 3, 9 | ( | ( |
1. Exceptional items are detailed in note 4.
2. The comparative consolidated statement of comprehensive income has been re-presented to reflect the results of the US business as a discontinued operation.
See note 3.
3. Interest income recognised on assets held at amortised cost under the effective interest rate method and £7 .7 million (2023: £5. 3 million) on money market
funds held at fair value through profit and loss.
4. Net income is also referred to as “revenue”.
The notes on pages 128 to 179 form part of these financial statements.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 125
| 31 December | |||
| 31 December | 2023 | ||
| 2024 | (re-presented ) 1 | ||
| Note | £m | £m | |
| Non-current assets | |||
Intangible assets | 10 | ||
Property, plant and equipment | 11 | ||
Investment in associates | 29 | ||
Investment in trusts and co-investments | 12, 16 | ||
SME loans held at amortised cost | 12, 16 | ||
Trade and other receivables | 13 | ||
| Current assets | |||
SME loans held at amortised cost | 12, 16 | ||
SME loans held at fair value through profit and loss | 12, 16 | ||
Lines of credit | 12, 16 | ||
Trade and other receivables | 13 | ||
Cash and cash equivalents | 22 | ||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 14 | ||
Bank borrowings | 16, 22 | ||
Short-term provisions and other liabilities | 15 | ||
Lease liabilities | 11, 22 | ||
| Non-current liabilities | |||
Long-term provisions and other liabilities | 15 | ||
Bank borrowings | 16, 22 | ||
Lease liabilities | 11, 22 | ||
Total liabilities | |||
| Equity | |||
Share capital | 17 | ||
Share premium account | 18 | ||
Foreign exchange reserve | 19 | ||
Share options reserve | |||
Retained earnings/(accumulated losses) | 20 | ( | |
Total equity | |||
Total equity and liabilities |
1. SME loans have been presented under aggregated headings and the comparative year re-presented in order to simplify the presentation of these loans as the
balances become less material. Additionally, the comparative SME loans held at amortised cost have been re-presented to more accurately reflect the current
and non-current split of these loans. See note 1 for details.
Company registration number 07123934
The notes on pages 128 to 179 form part of these financial statements.
Consolidated balance sheet
as at 31 December 2024
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024126
| (Accumulated | |||||||
| Share | Foreign | Share | losses)/ | ||||
| Share | premium | exchange | options | retained | Total | ||
| capital | account | reserve | reserve | earnings | equity | ||
| Note | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2023 | ( | ||||||
Loss for the year | 20 | ( | ( | ||||
| Other comprehensive expense | |||||||
| Exchange differences on translation | 19 | ( | ( | ||||
| of foreign operations | |||||||
Total comprehensive expense | ( | ( | ( | ||||
| Transactions with owners | |||||||
Transfer of share option costs | 20 | ( | |||||
Purchase of own shares held in Employee Benefit Trust | 17. 20 | ( | ( | ||||
| Employee share schemes – | 21 | ||||||
| value of employee services | |||||||
Balance at 31 December 2023 | ( | ||||||
Profit for the year | 20 | ||||||
| Other comprehensive expense | |||||||
| Exchange differences on translation | 19 | ( | ( | ||||
| of foreign operations | |||||||
Total comprehensive (expense)/income | ( | ( | |||||
| Transactions with owners | |||||||
Transfer of share option costs | 20 | ( | |||||
Buyback and cancellation of own shares | 17, 20 | ( | ( | ( | |||
Capital reduction | 18, 20 | ( | |||||
| Issue of share capital/exercise | |||||||
of share options | 18 | ||||||
| Employee share schemes – | 21 | ||||||
| value of employee services | |||||||
Balance at |
The notes on pages 128 to 179 form part of these financial statements.
Consolidated statement of changes in equity
for the year ended 31 December 2024
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 127
| 31 December | |||
| 31 December | 2023 | ||
| 2024 | (re-presented) 1 | ||
| Note | £m | £m | |
Net cash outflow from operating activities | 22 | ( | ( |
| Investing activities | |||
Purchase of intangible assets | 10 | ( | ( |
Purchase of property, plant and equipment | 11 | ( | ( |
Originations of SME loans held at amortised cost | 16 | ( | ( |
Cash receipts from SME loans held at amortised cost | 16 | ||
Originations from SME loans held at fair value through profit and loss | 16 | ( | |
Cash receipts from SME loans held at fair value through profit and loss | 16 | ||
Proceeds from sale of SME loans held at fair value through profit and loss | 16 | ||
Investment in trusts and co-investments | 16 | ( | ( |
Cash receipts from investments in trusts and co-investments | 16 | ||
Redemption in associates | 25, 29 | ||
Dividends from associates | 25, 29 | ||
Proceeds from sale of subsidiary | 3 | ||
Direct costs of selling subsidiary | 3 | ( | |
Cash disposed of on sale of subsidiary | 3 | ( | |
Net cash inflow from investing activities | |||
| Financing activities | |||
Proceeds from bank borrowings | 22 | ||
Repayment of bank borrowings | 22 | ( | ( |
Payment of bond liabilities | 22 | ( | |
Proceeds from the exercise of share options | 18 | ||
Purchase of own shares | 17, 20 | ( | |
Share buyback | 17, 20 | ( | |
Proceeds from subleases | |||
Payment of lease liabilities | 22 | ( | ( |
Net cash inflow from financing activities | |||
Net (decrease)/increase in cash and cash equivalents | ( | ||
Cash and cash equivalents at the beginning of the year | |||
Effect of foreign exchange rate changes | ( | ||
Cash and cash equivalents at the end of the year | 22 |
1. SME loan-related cash flows have been presented under aggregated headings and the comparative year re-presented. See note 1 for details.
The notes on pages 128 to 179 form part of these financial statements.
Cash flows from discontinued operations are shown in note 3.
Consolidated statement of cash flows
for the year ended 31 December 2024
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024128
Notes forming part of the consolidated financial statements
for the year ended 31 December 2024
1. Material accounting policies
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 129
1. Material accounting policies continued
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024130
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
1. Material accounting policies continued
Significant changes in the current reporting year
continued
| Applicable for | ||
| financial years | ||
| beginning | ||
Standard/interpretation | Content | on/after |
| Amendments to IAS 1 – | Presentation of | 1 January |
| Classification of Liabilities | financial | 2024 |
| as Current or Non-current | statements | |
| Amendments to IAS 1 – | Presentation of | 1 January |
| Non-current Liabilities with | financial | 2024 |
| Covenants | statements | |
| Amendments to IAS 12 – | Tax | 1 January |
| International Tax Reform – | 2024 | |
| Pillar Two Model Rules | ||
| IFRS 1 General | Sustainability | 1 January |
| Requirements for Disclosure | disclosures | 2024 |
| of Sustainability-related | ||
| Financial Information | ||
| IFRS S2 Climate-related | Sustainability | 1 January |
| Disclosures | disclosures | 2024 |
| Amendments to IAS 7 and | Financial | 1 January |
| IFRS 7 – Supplier Finance | instruments | 2024 |
| Arrangements | ||
| Amendments to IFRS 16 – | Leases | 1 January |
Lease Liability in a Sale and Leaseback | 2024 |
| Applicable for | ||
| financial years | ||
| beginning | ||
Standard/interpretation | Content | on/after |
| Amendments to IAS 21 – | Foreign | 1 January |
| Lack of Exchangeability | exchange rates | 2025 |
| Amendment to IFRS 9 and | Financial | 1 January |
IFRS 7 – Classification and Measurement of Financial | instruments | 2026 |
| Instruments | ||
| IFRS 18 Presentation and | Financial | 1 January |
| Disclosure in Financial | statements | 2027 |
| Statements | disclosures | |
| IFRS 19 Subsidiaries without | Financial | 1 January |
| Public Accountability: | statements | 2027 |
| Disclosures | disclosures |
Summary of new and amended accounting policies
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 131
1. Material accounting policies continued
Summary of existing accounting policies
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024132
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
1. Material accounting policies continued
Foreign currency translation continued
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 133
1. Material accounting policies continued
Income recognition continued
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024134
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
1. Material accounting policies continued
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 135
1. Material accounting policies continued
Intangible assets continued
Capitalised development costs continued
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024136
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
1. Material accounting policies continued
Leases continued
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 137
1. Material accounting policies continued
Investment in associates continued
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024138
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
1. Material accounting policies continued
Financial instruments continued
Financial assets continued
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 139
1. Material accounting policies continued
Financial instruments continued
Other financial assets continued
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024140
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
1. Material accounting policies continued
2. Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the consolidated financial statements
requires the Group to make estimates and judgements
that affect the application of policies and reported
amounts. Critical judgements represent key decisions
made by management in the application of the Group
accounting policies. Where a significant risk of
materially different outcomes exists due to management
assumptions or sources of estimation uncertainty, this will
represent a key source of estimation uncertainty.
Estimates and judgements are continually evaluated and
are based on experience and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances. Although these
estimates are based on management’s best knowledge
of the amount, event or actions, actual results ultimately
may differ from those estimates.
The significant judgements and estimates applied by the
Group in the financial statements have been applied on
a consistent basis with the financial statements for the
comparative year to 31 December 2023.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 141
2. Critical accounting judgements and key sources of
estimation uncertainty continued
Critical judgements
Loans originated through the platform
The Group originates SME loans through its platform
which have been funded primarily by banks, asset
managers, other institutional investors, funds, national
entities, retail investors or by usage of its own capital.
Judgement is required to determine whether these
loans should be recognised on the Group’s balance
sheet. Where the Group, its subsidiaries or SPVs which
it consolidates have legal and beneficial ownership to
the title of those SME loans, they are recognised on the
Group’s balance sheet. Where this is not the case, the
loans are not recognised at the point of origination.
Recognition of deferred tax
Under IAS 12, a deferred tax asset should be recognised for
all deductible temporary differences and tax losses to the
extent that it is probable that taxable profit will be available
against which the deductible temporary difference or tax
losses can be utilised. While the Board-approved forecasts
project the UK to be in a taxable profit position for the year
ended 31 December 2025 and beyond, there are risks to
achieving this forecast and as a result it is not considered
highly probable. Management has used its judgement in
determining whether there is sufficient certainty to recognise
a deferred tax asset. The European Securities and Markets
Authority (“ESMA”) has previously issued guidance relating
to the recognition of deferred tax assets in response to
companies recognising assets too early only to subsequently
write them off. One of the key indicators suggested by ESMA
for the recognition of deferred tax is whether taxable profit
is being recognised from which an entity has begun to offset
losses. This is not yet the case for the UK business for a
sustained period and management has determined not to
recognise a deferred tax asset as a result. Had management
determined a different level of certainty regarding the
taxable profits of the UK for the year end and beyond,
then a deferred tax asset may have been recognised.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024142
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
| Before | 31 December | 31 December | |||
| exceptional | Exceptional | 2024 | 2023 | ||
| Note | items | items | £m | £m | |
Transaction fees | 10.3 | — | 10.3 | 23.4 | |
Servicing fees | 2.1 | — | 2.1 | 3.4 | |
Interest income | 0.7 | — | 0.7 | 1.3 | |
Other fees | 0.2 | — | 0.2 | 0.6 | |
Operating income | 13.3 | — | 13.3 | 28.7 | |
Investment income | 0.7 | — | 0.7 | 4.4 | |
Investment expense | — | — | — | (0.6) | |
Net investment income | 0.7 | — | 0.7 | 3.8 | |
Total income | 14.0 | — | 14.0 | 32.5 | |
Fair value gains | 2.2 | — | 2.2 | 5.6 | |
Net income | 16.2 | — | 16.2 | 38.1 | |
People costs | (16.0) | 1.7 | (14.3) | (28.9) | |
Marketing costs | (3.7) | — | (3.7) | (11.3) | |
| Depreciation, amortisation, impairment | |||||
and modification gains/(losses) | 10, 11 | (0.3) | — | (0.3) | (10.3) |
(Charge)/credit for expected credit losses | 15, 16 | (0.1) | — | (0.1) | 0.1 |
Other costs | (6.2) | — | (6.2) | (11.0) | |
Operating expenses | (26.3) | 1.7 | (24.6) | (61.4) | |
| Realised FX recycled from foreign currency | |||||
translation | — | 8.7 | 8.7 | — | |
Gain on disposal of US business | — | 8.1 | 8.1 | — | |
(Loss)/profit before taxation | (10.1) | 18.5 | 8.4 | (23.3) | |
Income tax | 8 | (0.1) | — | (0.1) | (6.8) |
(Loss)/profit for the year from discontinued operations | (10.2) | 18.5 | 8.3 | (30.1) | |
| Other comprehensive income/(expense) | |||||
| Exchange differences on translation of foreign | 19 | (0.2) | (8.7) | (8.9) | (2.7) |
| operations – discontinued operations | |||||
Total comprehensive (expense)/income for the year attributable to owners of the Parent | (10.4) | 9.8 | (0.6) | (32.8) | |
| Earnings per share | |||||
| Basic and diluted (loss)/earnings per share | |||||
from discontinued operations | 9 | (3.0)p | 2.4p | (8.7)p | |
| Basic and diluted (loss)/earnings per share | 9 | (3.0)p | 2.2p | (8.7)p | |
| from discontinued operations |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 143
3. Discontinued operations continued
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Adjusted EBITDA | (8.7) | (10.6) |
Discount unwind on lease liabilities | (0.2) | (0.4) |
Depreciation, amortisation, impairment and modification gains/(losses) | (0.3) | (10.3) |
Exceptional items | 18.5 | — |
Share-based payments and social security costs | (1.0) | (1.8) |
Foreign exchange gains/(losses) | 0.1 | (0.2) |
Profit/(loss) before tax | 8.4 | (23.3) |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Cash and cash equivalents at the beginning of the year | 22.3 | 13.8 |
Net cash outflow from operating activities | (8.6) | (12.3) |
Net cash (outflow)/inflow from investing activities | (13.3) | 64.8 |
Net cash outflow from financing activities | (0.6) | (43.2) |
Net (decrease)/increase in cash generated | (0.2) | 23.1 |
Effect of foreign exchange rate changes | 0.2 | (0.8) |
Cash and cash equivalents at the end of the year | — | 22.3 |
| £m | |
| Consideration received: | |
Cash consideration at prevailing exchange rate | 32.6 |
Net assets disposed on (including cash and cash equivalents of £23.1 million) | (22.2) |
Gross gain on sale | 10.4 |
Direct transaction costs for legal, advisory and other costs | (2.3) |
Net impact of (early vesting)/lapsing US share options | 1.7 |
Other disposal related costs | (0.6) |
Gain on sale | 9.8 |
Reclassification of foreign currency translation reserve | 8.7 |
Total gain as a result of disposal after reclassification of foreign currency translation reserve | 18.5 |
4. Exceptional items
The Group reflects its underlying financial results in the “before exceptional items” column of the consolidated
statement of comprehensive income in order to provide a clear and consistent view of trading performance.
As part of its ongoing commitment to profitability, the Group launched a redundancy and cost efficiency programme
during the year. This process will result in a simpler, leaner and better positioned UK-focused operation. This resulted
in redundancy costs of £2.3 million and impairment of capitalised development spend intangible assets of £0.3 million
which were treated as exceptional items.
The Group disposed of its investment in the US business on 1 July 2024, as detailed in note 3.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024144
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
31 December 2024 1 | 31 December 2023 1 | ||||||
Continuing operations | Continuing operations | ||||||
United Kingdom | Total | United Kingdom | Other | Total | |||
| Term Loans | FlexiPay | Total | Term Loans | FlexiPay | Term Loans | Total | |
| £m | £m | £m | £m | £m | £m | £m | |
Transaction fees | 84.7 | 0.6 | 85.3 | 65.2 | 0.1 | — | 65.3 |
Servicing fees | 37.5 | — | 37.5 | 38.8 | — | 0.2 | 39.0 |
Interest income | 8.3 | 22.6 | 30.9 | 7.5 | 7.8 | 0.1 | 15.4 |
Other fees | 5.1 | 0.1 | 5.2 | 6.3 | — | 0.1 | 6.4 |
Operating income | 135.6 | 23.3 | 158.9 | 117.8 | 7.9 | 0.4 | 126.1 |
Net investment income | 2.8 | — | 2.8 | 3.6 | — | — | 3.6 |
Total income | 138.4 | 23.3 | 161.7 | 121.4 | 7.9 | 0.4 | 129.7 |
Fair value gains | 4.2 | — | 4.2 | 3.1 | — | — | 3.1 |
Cost of funds | — | (5.8) | (5.8) | — | (2.7) | — | (2.7) |
Net income | 142.6 | 17.5 | 160.1 | 124.5 | 5.2 | 0.4 | 130.1 |
Adjusted EBITDA | 37.0 | (12.5) | 24.5 | 21.3 | (14.4) | (0.2) | 6.7 |
Discount unwind on lease liabilities | (0.6) | — | (0.6) | (0.2) | — | — | (0.2) |
Depreciation, amortisation, impairment and modification | |||||||
(gains/losses) | (11.4) | (1.8) | (13.2) | (11.3) | (1.3) | — | (12.6) |
| Share-based payments and social | |||||||
security costs | (6.5) | (1.3) | (7.8) | (3.3) | (0.5) | — | (3.8) |
Exceptional items | (2.3) | (0.3) | (2.6) | — | — | — | — |
Foreign exchange gains | 0.5 | — | 0.5 | — | — | — | — |
Profit/(loss) before tax | 16.7 | (15.9) | 0.8 | 6.5 | (16.2) | (0.2) | (9.9) |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 145
| Before | |||||
| exceptional | Exceptional | 31 December | 31 December | ||
| items | items 1 | 2024 | 2023 | ||
| Note | £m | £m | £m | £m | |
| Continuing operations | |||||
Depreciation | 11 | 3.0 | — | 3.0 | 3.5 |
Amortisation and impairment | 4, 10 | 10.6 | 0.3 | 10.9 | 9.1 |
Modification gains | 11 | (0.4) | — | (0.4) | — |
Rental income and other recharges | — | — | — | (0.2) | |
Employment costs (including contractors) | 7 | 68.1 | 2.3 | 70.4 | 65.5 |
Marketing costs – (excluding employment costs) | 45.6 | — | 45.6 | 37.1 | |
Data and technology | 7.2 | — | 7.2 | 6.8 | |
Expected credit loss impairment charge | 16, 27 | 8.6 | — | 8.6 | 4.5 |
Other expenses | 14.0 | — | 14.0 | 13.7 | |
Total operating expenses from continuing operations | 156.7 | 2.6 | 159.3 | 140.0 |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
| Audit fees | ||
| Continuing operations | ||
| – Fees payable to the Company’s auditors for the audit of the Parent Company and consolidated | ||
financial statements | 0.4 | 0.5 |
– Fees payable to the Company’s auditors and its associates for the statutory audit of the financial statements of subsidiaries of the Company | 0.5 | 0.5 |
Total audit fees | 0.9 | 1.0 |
| Non-audit service fees | ||
– Audit-related assurance services | 0.3 | 0.3 |
– Other assurance services | 0.1 | 0.1 |
Total non-audit service fees | 0.4 | 0.4 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024146
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
7. Employees
The average monthly number of employees (including Directors) during the year was:
| 2024 | 2023 | |
| Number | Number | |
| Continuing operations | ||
Term Loans | 628 | 666 |
FlexiPay | 88 | 81 |
Other | 5 | 9 |
Total continuing operations | 721 | 756 |
Discontinued operations 1 | ||
US | 106 | 203 |
Total discontinued operations | 106 | 203 |
Total | 827 | 959 |
In addition to the employees above, the average monthly number of contractors during the year was 80 (2023: 115),
of which 13 (2023: 26) related to the US
1
.
1. Average monthly numbers are calculated over 12 months and for the 2024 US discontinued operations includes 6 months following the sale of the US business
where the employee number was nil.
Employment costs (including Directors’ emoluments) during the year were:
| 31 December | ||||
| 31 December 2024 | 2023 | |||
| Before | ||||
| exceptional | Exceptional | |||
| items | items 1 | Total | Total | |
| Continuing operations | £m | £m | £m | £m |
Wages and salaries | 56.0 | — | 56.0 | 55.6 |
Social security costs | 6.3 | — | 6.3 | 6.0 |
Pension costs | 2.1 | — | 2.1 | 2.1 |
Share-based payments | 7.8 | — | 7.8 | 3.8 |
Exceptional costs | — | 2.3 | 2.3 | — |
72.2 | 2.3 | 74.5 | 67.5 | |
Contractor costs | 4.9 | — | 4.9 | 7.2 |
Less: capitalised development costs | (9.0) | — | (9.0) | (9.2) |
Employment costs net of capitalised development costs | 68.1 | 2.3 | 70.4 | 65.5 |
1. See note 4 for details of exceptional items.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 147
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
| Current tax | ||
| Continuing operations | ||
| UK | ||
Current tax on profits/(losses) for the year | 0.5 | 0.3 |
Adjustment in respect of prior years | — | (2.0) |
0.5 | (1.7) | |
Other Current tax on (losses)/profits for the year | — | — |
Adjustment in respect of prior years | — | — |
— | — | |
Total current tax charge/(credit) from continuing operations | 0.5 | (1.7) |
| Discontinued operations | ||
| US | ||
Current tax on (losses)/profits for the year | 0.1 | 0.3 |
Adjustment in respect of prior years | — | (0.1) |
Total current tax charge from discontinued operations | 0.1 | 0.2 |
Total current tax charge/(credit) | 0.6 | (1.5) |
| Deferred tax | ||
| Continuing operations | ||
| UK | ||
Deferred tax on profits/(losses) for the year | — | — |
Adjustments in respect of prior years | — | — |
— | — | |
Other Deferred tax on (losses)/profits for the year | — | — |
Adjustments in respect of prior years | — | — |
— | — | |
Total deferred tax charge/(credit) from continuing operations | — | — |
| Discontinued operations | ||
| US | ||
Deferred tax on (losses)/profits for the year | — | 6.6 |
Adjustments in respect of prior years | — | — |
Total deferred tax charge from discontinued operations | — | 6.6 |
Total deferred tax charge | — | 6.6 |
Total tax charge | 0.6 | 5.1 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024148
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
8. Income tax charge/(credit) continued
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Profit/(loss) before taxation for the Group | 9.2 | (33.2) |
Taxation on profit/(loss) at 25.0% (2023: 23.5%) | 2.3 | (7.8) |
| Effects of: | ||
Research and development | 0.4 | 0.3 |
Effect of foreign tax rates | 0.1 | 0.3 |
Non-taxable/non-deductible expenses | 0.3 | 0.7 |
Unrecognised timing differences | (0.1) | 1.7 |
Unrecognised tax losses accumulated | 1.1 | 5.6 |
Adjustment in respect of prior years | — | (2.1) |
Deferred tax assets derecognised | — | 6.6 |
Impairment charge | (3.5) | (0.2) |
Total tax charge | 0.6 | 5.1 |
Total tax charge/(credit) from continuing operations | 0.5 | (1.7) |
Total tax charge from discontinued operations | 0.1 | 6.8 |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Property, plant and equipment | — | (1.5) |
Carry forward losses (UK) | — | 1.5 |
Carry forward losses (US) | — | — |
Recognised deferred tax | — | — |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Property, plant and equipment | 6.9 | 22.8 |
Carry forward losses | 125.0 | 183.4 |
Deferred stock options | 22.5 | 20.5 |
US R&D credit | — | 2.2 |
US fair value adjustments | — | 40.7 |
Other | 0.2 | 0.4 |
Unrecognised deferred tax 1 | 154.6 | 270.0 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 149
8. Income tax charge/(credit) continued
Unrecognised deferred tax continued
9. Earnings/(loss) per share
Basic earnings/(loss) per share amounts are calculated by dividing the profit/(loss) for the year attributable to ordinary
equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.
For diluted earnings/(loss) per share, the weighted average number of ordinary shares in issue is adjusted to assume
conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares include those share options
granted to employees under the Group’s share-based compensation schemes which do not have an exercise price or
where the exercise price is less than the average market price of the Company’s ordinary shares during the year.
Where loss per share is presented, there is no difference in the weighted average number of shares used in the
calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.
The following table reflects the profit/(loss) and share data used in the basic and diluted earnings/(loss) per
share computations:
| 31 December | |||
| 2024 | |||
| 31 December | Before | ||
| 2024 | exceptional | 31 December | |
| Total | items | 2023 | |
| £m | £m | £m | |
Profit/(loss) for the year from continuing operations | 0.3 | 2.9 | (8.2) |
Basic weighted average number of ordinary shares in issue (million) | 342.4 | 342.4 | 344.8 |
Basic earnings/(loss) per share from continuing operations | 0.1p | 0.8p | (2.4)p |
Profit/(loss) for the year from continuing operations | 0.3 | 2.9 | (8.2) |
Diluted weighted average number of ordinary shares in issue (million) | 382.2 | 382.2 | 344.8 |
Diluted earnings/(loss) per share from continuing operations | 0.1p | 0.8p | (2.4)p |
| 31 December | |||
| 2024 | |||
| 31 December | Before | 31 December | |
| 2024 | exceptional | 2023 | |
| Total | items | Total | |
| £m | £m | £m | |
Profit/(loss) for the year from discontinued operations | 8.3 | (10.2) | (30.1) |
Basic weighted average number of ordinary shares in issue (million) | 342.4 | 342.4 | 344.8 |
Basic earnings/(loss) per share from discontinued operations | 2.4p | (3.0)p | (8.7)p |
Profit/(loss)for the year from discontinued operations | 8.3 | (10.2) | (30.1) |
Diluted weighted average number of ordinary shares in issue (million) | 382.2 | 342.4 | 344.8 |
Diluted earnings/(loss) per share from discontinued operations | 2.2p | (3.0)p | (8.7)p |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024150
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
| Capitalised | ||||
| development | Computer | Other | ||
| costs | software | intangibles | Total | |
| £m | £m | £m | £m | |
| Cost | ||||
At 1 January 2023 | 54.8 | 0.8 | 1.2 | 56.8 |
Exchange differences | (0.8) | — | — | (0.8) |
Additions | 11.3 | 0.2 | — | 11.5 |
Disposals | (4.1) | (0.6) | — | (4.7) |
At 31 December 2023 | 61.2 | 0.4 | 1.2 | 62.8 |
At 1 January 2024 | 61.2 | 0.4 | 1.2 | 62.8 |
Exchange differences | 0.2 | — | (0.1) | 0.1 |
Additions | 9.0 | — | — | 9.0 |
Disposals | (4.4) | (0.3) | — | (4.7) |
De-recognition of assets of discontinued operations | (15.7) | — | — | (15.7) |
At 31 December 2024 | 50.3 | 0.1 | 1.1 | 51.5 |
| Accumulated amortisation | ||||
At 1 January 2023 | 26.8 | 0.6 | 1.2 | 28.6 |
Exchange differences | (0.5) | 0.1 | — | (0.4) |
Charge for the year | 12.3 | 0.1 | — | 12.4 |
Impairment | 3.9 | — | — | 3.9 |
Disposals | (4.1) | (0.6) | — | (4.7) |
At 31 December 2023 | 38.4 | 0.2 | 1.2 | 39.8 |
At | 38.4 | 0.2 | 1.2 | 39.8 |
Exchange differences | 0.1 | — | (0.1) | — |
Charge for the year | 9.7 | 0.1 | — | 9.8 |
Impairment (exceptional item) | 0.3 | — | — | 0.3 |
Impairment | 0.7 | 0.1 | — | 0.8 |
Disposals | (4.4) | (0.3) | — | (4.7) |
De-recognition of assets of discontinued operations | (15.7) | — | — | (15.7) |
At 31 December 2024 | 29.1 | 0.1 | 1.1 | 30.3 |
| Carrying amount | ||||
At 31 December 2024 | 21.2 | — | — | 21.2 |
At 31 December 2023 | 22.8 | 0.2 | — | 23.0 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 151
11. Property, plant and equipment, right-of-use assets and lease liabilities
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Property, plant and equipment (owned) | 2.9 | 1.7 |
Right-of-use assets | 6.7 | 3.3 |
9.6 | 5.0 |
| Right-of-use | |||||
| Leasehold | Computer | Furniture and | assets | ||
| improvements | equipment | fixtures | (property) | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
At 1 January 2023 | 5.2 | 3.0 | 2.1 | 32.7 | 43.0 |
Disposals | — | (1.1) | — | — | (1.1) |
Additions 1 | — | 0.7 | — | 0.2 | 0.9 |
Exchange differences | — | — | — | (0.6) | (0.6) |
At 31 December 2023 | 5.2 | 2.6 | 2.1 | 32.3 | 42.2 |
At 1 January 2024 | 5.2 | 2.6 | 2.1 | 32.3 | 42.2 |
Disposals | (3.7) | (0.4) | (0.7) | (9.6) | (14.4) |
Lease modification | — | — | — | 5.7 | 5.7 |
Additions 1 | 2.3 | 0.5 | 0.1 | — | 2.9 |
| Exchange differences and other non-cash | |||||
movements | (0.4) | — | — | 0.1 | (0.3) |
Derecognition of assets of discontinued operations | (0.2) | (1.0) | (0.7) | (10.2) | (12.1) |
At 31 December 2024 | 3.2 | 1.7 | 0.8 | 18.3 | 24.0 |
| Accumulated depreciation | |||||
At 1 January 2023 | 3.9 | 1.9 | 1.8 | 25.4 | 33.0 |
Disposals | — | (1.1) | — | — | (1.1) |
Charge for the year | 0.7 | 0.8 | 0.1 | 2.7 | 4.3 |
Impairment | — | 0.1 | 0.1 | 1.3 | 1.5 |
Exchange differences | (0.1) | — | — | (0.4) | (0.5) |
At 31 December 2023 | 4.5 | 1.7 | 2.0 | 29.0 | 37.2 |
At 1 January 2024 | 4.5 | 1.7 | 2.0 | 29.0 | 37.2 |
Disposals | (3.7) | (0.4) | (0.7) | (9.6) | (14.4) |
Charge for the year | 0.5 | 0.6 | 0.1 | 2.0 | 3.2 |
Impairment | — | 0.1 | — | — | 0.1 |
Exchange differences | — | — | — | 0.1 | 0.1 |
Derecognition of assets of discontinued operations | (0.2) | (1.0) | (0.7) | (9.9) | (11.8) |
At 31 December 2024 | 1.1 | 1.0 | 0.7 | 11.6 | 14.4 |
| Carrying amount | |||||
At 31 December 2024 | 2.1 | 0.7 | 0.1 | 6.7 | 9.6 |
At 31 December 2023 | 0.7 | 0.9 | 0.1 | 3.3 | 5.0 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024152
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
11. Property, plant and equipment, right-of-use assets and lease liabilities continued
Reconciliation of amount recognised in the balance sheet continued
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Current | 1.8 | 7.2 |
Non-current | 5.8 | 5.4 |
Total | 7.6 | 12.6 |
| 31 December | 31 December | |
| 2024 | 2023 | |
| Continuing operations | £m | £m |
Depreciation charge of right-of-use assets (property) | 1.9 | 2.1 |
Gain on modification of lease liability | (0.4) | — |
Interest expense (included in operating expenses) | 0.6 | 0.2 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 153
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
| Non-current | ||
SME loans – amortised cost | 1.4 | 5.6 |
Investment in trusts and co-investments – FVTPL | 17.8 | 25.2 |
Total non-current | 19.2 | 30.8 |
| Current | ||
SME loans – amortised cost | 0.7 | 1.1 |
Lines of credit – amortised cost 1 | 97.1 | 50.0 |
SME loans – FVTPL | 1.2 | 18.6 |
Total current | 99.0 | 69.7 |
Total | 118.2 | 100.5 |
13. Trade and other receivables
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Other receivables | — | 1.4 |
Non-current trade and other receivables | — | 1.4 |
Trade receivables | 0.4 | 0.4 |
Other receivables | 4.2 | 2.7 |
Tax-related receivables | 4.8 | 4.6 |
Prepayments | 4.7 | 5.2 |
Accrued income | 5.8 | 5.3 |
Rent and other deposits | 0.9 | 2.2 |
Current trade and other receivables | 20.8 | 20.4 |
20.8 | 21.8 |
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables
described earlier.
No trade receivables were overdue or impaired.
Included in rent and other deposits are £0.9 million of rental deposits (2023: £1.6 million) in respect of the Group’s
property leases which expire over the next five years.
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
14. Trade and other payables
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Trade payables | 1.8 | 2.4 |
Other taxes and social security costs | 7.0 | 4.2 |
Other creditors 1 | 6.5 | 32.6 |
Accruals and deferred income | 12.5 | 15.1 |
27.8 | 54.3 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024154
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
| ECL on | |||||
| undrawn | |||||
| Loan | lines of credit | ||||
| Dilapidation | repurchase | Restructuring 1 | and other 2 | Total | |
| £m | £m | £m | £m | £m | |
At 1 January 2023 | 1.1 | 0.5 | — | 0.5 | 2.1 |
Additional provision/liability | — | 0.2 | — | 1.2 | 1.4 |
Amount utilised | — | (0.4) | — | (0.3) | (0.7) |
Amount reversed | — | (0.2) | — | — | (0.2) |
At 31 December 2023 | 1.1 | 0.1 | — | 1.4 | 2.6 |
Additional provision/liability | — | — | 2.3 | 2.2 | 4.5 |
Amount utilised | (0.3) | (0.1) | (2.3) | — | (2.7) |
Amount reversed | (0.2) | — | — | — | (0.2) |
At 31 December 2024 | 0.6 | — | — | 3.6 | 4.2 |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Current provisions and other liabilities | 3.6 | 1.5 |
Non-current provisions and other liabilities | 0.6 | 1.1 |
4.2 | 2.6 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 155
16. Financial risk management continued
31 December 2024 | 31 December 2023 | |||||||
| Fair value | Fair value | |||||||
| through | through | |||||||
| profit | Amortised | profit | Amortised | |||||
| and loss | cost | Other | Total | and loss | cost | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
| Assets | ||||||||
| SME loans held at amortised | ||||||||
cost | — | 2.1 | — | 2.1 | — | 6.7 | — | 6.7 |
SME loans held at fair value through profit and loss | 1.2 | — | — | 1.2 | 18.6 | — | — | 18.6 |
Lines of credit | — | 97.1 | — | 97.1 | — | 50.0 | — | 50.0 |
Investment in trusts and co-investments | 17.8 | — | — | 17.8 | 25.2 | — | — | 25.2 |
Trade and other receivables | 0.6 | 10.7 | — | 11.3 | 0.8 | 11.2 | — | 12.0 |
Cash and cash equivalents | 136.3 | 51.3 | — | 187.6 | 150.1 | 71.3 | — | 221.4 |
155.9 | 161.2 | — | 317.1 | 194.7 | 139.2 | — | 333.9 | |
| Liabilities | ||||||||
Trade and other payables | — | (8.3) | — | (8.3) | — | (35.0) | — | (35.0) |
Loan repurchase liability | — | — | — | — | — | — | (0.1) | (0.1) |
Bank borrowings | — | (101.9) | — | (101.9) | — | (56.9) | — | (56.9) |
Lease liabilities | — | (7.6) | — | (7.6) | — | (12.6) | — | (12.6) |
— | (117.8) | — | (117.8) | — | (104.5) | (0.1) | (104.6) | |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024156
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
16. Financial risk management continued
| Fair value measurement using | ||||||
31 December 2024 | 31 December 2023 | |||||
| Quoted | Quoted | |||||
| prices | Significant | Significant | prices | Significant | Significant | |
| in active | observable | unobservable | in active | observable | unobservable | |
| markets | inputs | inputs | markets | inputs | inputs | |
| (level 1) | (level 2) | (level 3) | (level 1) | (level 2) | (level 3) | |
| £m | £m | £m | £m | £m | £m | |
| Financial assets | ||||||
| SME loans held at fair value through profit | ||||||
and loss | — | — | 1.2 | — | — | 18.6 |
Trade and other receivables | 0.6 | — | — | 0.8 | — | — |
Investment in trusts and co-investments | — | — | 17.8 | — | — | 25.2 |
Cash and cash equivalents | 136.3 | — | — | 150.1 | — | — |
136.9 | — | 19.0 | 150.9 | — | 43.8 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 157
16. Financial risk management continued
Financial instruments measured at fair value continued
| SME loans | ||
| held at fair | Investment in | |
| value through | trusts and | |
| profit and loss | co-investments | |
| £m | £m | |
Balance as at 1 January 2023 | 69.1 | 28.7 |
Additions | 11.9 | 1.8 |
Repayments | (37.6) | (6.6) |
Disposal | (30.4) | — |
Net gain on the change in fair value of financial instruments at fair value through profit or loss | 7.4 | 1.3 |
Foreign exchange loss | (1.8) | — |
Balance as at 31 December 2023 | 18.6 | 25.2 |
Additions | — | 4.1 |
Repayments | (13.5) | (14.6) |
Net gain on the change in fair value of financial instruments at fair value through profit or loss | 2.6 | 3.8 |
Other non-cash movements | (0.7) | — |
Disposal of discontinued operations | (5.8) | (0.7) |
Balance as at 31 December 2024 | 1.2 | 17.8 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024158
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
16. Financial risk management continued
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
| Non-current | ||
SME loans held at amortised cost | 1.4 | 5.6 |
Investment in trusts and co-investments | 17.8 | 25.2 |
| Trade and other receivables: | ||
– Other receivables | — | 1.4 |
| Current | ||
SME loans held at amortised cost | 0.7 | 1.1 |
SME loans held at fair value through profit and loss | 1.2 | 18.6 |
Lines of credit | 97.1 | 50.0 |
| Trade and other receivables: | ||
– Trade receivables | 0.4 | 0.4 |
– Other receivables | 4.2 | 2.7 |
– Accrued income | 5.8 | 5.3 |
– Rent and other deposits | 0.9 | 2.2 |
Cash and cash equivalents | 187.6 | 221.4 |
Total gross credit risk exposure | 317.1 | 333.9 |
Less bank borrowings 1 | (101.9) | (56.9) |
Total net credit risk exposure | 215.2 | 277.0 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 159
16. Financial risk management continued
Financial risk factors continued
Credit risk continued
Credit risk associates with SME loans held at amortised cost and lines of credit continued
Factor | Description |
| Probability of | The Group has developed PD models tailored to each Term Loan or line of credit product to assess the |
| Default (“PD”) | likelihood of default within the next 12 months and over the lifetime. The models estimate PD based on the |
| latest payment behaviour of the customers and observed historical trends. The PD model also includes an | |
| estimate of the future macroeconomic effect. | |
| Exposure at | The Group has developed an EAD model for line of credit products to assess the likely exposure at default. |
| Default (“EAD”) | The model calculates estimates of EAD based upon the latest payment behaviour of the customer, the credit |
| limit utilisation, and applying a credit conversion factor approach. | |
| Loss Given | The Group has developed LGD models tailored to each Term Loan or line of credit product to assess the likely |
| Default (“LGD”) | financial loss given an account defaults. The models calculate estimates of LGD based on historical data on |
| observed recoveries against defaulted accounts. | |
Discount rate | The Group uses account-level effective interest rate which is calculated based on line of credit amount or |
| loan amount, interest and fees, expected repayments including pre-payments and term. |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024160
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
16. Financial risk management continued
Financial risk factors continued
Credit risk continued
Credit risk associates with SME loans held at amortised cost and lines of credit continued
| Stage 1 | Stage 2 | Stage 3 | |||
| Performing: | Underperforming: | Non-performing: | POCI: | ||
| 12-month ECL | Lifetime ECL | Lifetime ECL | Lifetime ECL | Total | |
| Reconciliation of opening to closing ECL | £m | £m | £m | £m | £m |
At 1 January 2023 | 1.1 | 0.3 | 0.9 | 14.1 | 16.4 |
Impairment against new lending and purchased assets | 12.6 | 0.1 | 0.1 | 0.6 | 13.4 |
Exchange differences | — | — | — | (0.5) | (0.5) |
Impairment against loans transferred between stages | (0.3) | 0.5 | 2.5 | — | 2.7 |
Loans repaid | (10.5) | — | (0.2) | (0.9) | (11.6) |
| Change in probability of default or loss given | |||||
default assumptions | (1.3) | 0.1 | 0.4 | 0.5 | (0.3) |
At 31 December 2023 | 1.6 | 1.0 | 3.7 | 13.8 | 20.1 |
Impairment against new lending and purchased assets | 12.7 | — | — | — | 12.7 |
Exchange differences | — | — | (0.1) | (0.3) | (0.4) |
Impairment against loans transferred between stages | (0.2) | 3.9 | 7.1 | — | 10.8 |
Loans repaid | (11.2) | (3.3) | (0.4) | (0.7) | (15.6) |
Impairment provision derecognised related to written off loans | — | — | — | (0.3) | (0.3) |
| Change in probability of default or loss given | |||||
default assumptions | (0.1) | (0.2) | (0.8) | 0.6 | (0.5) |
| Derecognition of impairment associated with assets | |||||
of discontinued operations | — | — | (0.1) | (4.6) | (4.7) |
At 31 December 2024 | 2.8 | 1.4 | 9.4 | 8.5 | 22.1 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 161
16. Financial risk management continued
Financial risk factors continued
Credit risk continued
Credit risk associates with SME loans held at amortised cost and lines of credit continued
| Gross lines | |||||
| of credit and | |||||
| Basis for | SME loans held | Provision for | |||
| Expected credit | recognition of | at amortised | expected | Net carrying | |
| loss coverage | expected credit | cost | credit loss | amount | |
| % | loss impairment | £m | £m | £m | |
| As at 31 December 2023 | |||||
Stage 1 – Performing | 2.9 | 12-month ECL | 55.8 | (1.6) | 54.2 |
Stage 2 – Underperforming | 50.0 | Lifetime ECL | 2.0 | (1.0) | 1.0 |
Stage 3 – Non-performing | 86.0 | Lifetime ECL | 4.3 | (3.7) | 0.6 |
POCI (90+ days overdue) | 93.9 | Lifetime ECL | 14.7 | (13.8) | 0.9 |
Total | 76.8 | (20.1) | 56.7 | ||
| As at 31 December 2024 | |||||
Stage 1 – Performing | 2.8 | 12-month ECL | 99.1 | (2.8) | 96.3 |
Stage 2 – Underperforming | 43.8 | Lifetime ECL | 3.2 | (1.4) | 1.8 |
Stage 3 – Non-performing | 90.4 | Lifetime ECL | 10.4 | (9.4) | 1.0 |
POCI | 98.8 | Lifetime ECL | 8.6 | (8.5) | 0.1 |
Total | 121.3 | (22.1) | 99.2 |
| Basis for | Provision for | ||||
| Expected credit | recognition of | Gross lines | expected | Net carrying | |
| loss coverage | expected credit | of credit | credit loss | amount | |
| Of which is drawn FlexiPay lines of credit | % | loss impairment | £m | £m | £m |
| As at 31 December 2023 | |||||
Stage 1 – Performing | 2.8 | 12-month ECL | 50.3 | (1.4) | 48.9 |
Stage 2 – Underperforming | 52.6 | Lifetime ECL | 1.9 | (1.0) | 0.9 |
Stage 3 – Non-performing | 93.8 | Lifetime ECL | 3.2 | (3.0) | 0.2 |
POCI | — | Lifetime ECL | — | — | — |
Total | 55.4 | (5.4) | 50.0 | ||
| As at 31 December 2024 | |||||
Stage 1 – Performing | 2.8 | 12-month ECL | 97.0 | (2.7) | 94.3 |
Stage 2 – Underperforming | 43.8 | Lifetime ECL | 3.2 | (1.4) | 1.8 |
Stage 3 – Non-performing | 89.8 | Lifetime ECL | 9.8 | (8.8) | 1.0 |
POCI | — | Lifetime ECL | — | — | — |
Total | 110.0 | (12.9) | 97.1 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024162
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
16. Financial risk management continued
Financial risk factors continued
Credit risk continued
Credit risk associates with SME loans held at amortised cost and lines of credit continued
| Macroeconomic drivers | 2025 | 2026 | 2027 | 2028 | 2029 | |
(average for the forecast year) | ECL scenarios | % | % | % | % | % |
Unemployment rate % | Upside | 3.97 | 3.65 | 3.62 | 3.63 | 3.64 |
Base case | 4.40 | 4.31 | 4.18 | 4.06 | 4.00 | |
Downside | 5.15 | 5.98 | 6.71 | 6.71 | 6.48 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 163
16. Financial risk management continued
Financial risk factors continued
| Between | Total | ||||||
| Less than | 3 months and | Between 1 | Over | undiscounted | Impact of | Carrying | |
| 3 months | 1 year | and 5 years | 5 years | cash flows | discounting | amount | |
| At 31 December 2024 | £m | £m | £m | £m | £m | £m | £m |
| Financial liabilities | |||||||
Trade and other payables | (8.3) | — | — | — | (8.3) | — | (8.3) |
Bank borrowings | — | (101.9) | — | — | (101.9) | — | (101.9) |
| Loan repurchase | |||||||
liability 1 | — | — | — | — | — | — | — |
Lease liabilities | (0.5) | (1.4) | (7.4) | — | (9.3) | 1.7 | (7.6) |
(8.8) | (103.3) | (7.4) | — | (119.5) | 1.7 | (117.8) |
| Between | Total | ||||||
| Less than | 3 months and | Between 1 | Over | undiscounted | Impact of | Carrying | |
| 3 months | 1 year | and 5 years | 5 years | cash flows | discounting 2 | amount | |
| At 31 December 2023 | £m | £m | £m | £m | £m | £m | £m |
| Financial liabilities | |||||||
Trade and other payables | (34.8) | — | (0.2) | — | (35.0) | — | (35.0) |
Bank borrowings | — | (54.7) | (2.2) | — | (56.9) | — | (56.9) |
| Loan repurchase | |||||||
liability 1 | (0.1) | — | — | — | (0.1) | — | (0.1) |
Lease liabilities | (1.8) | (5.5) | (5.9) | — | (13.2) | 0.6 | (12.6) |
(36.7) | (60.2) | (8.3) | — | (105.2) | 0.6 | (104.6) |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024164
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
16. Financial risk management continued
Financial risk factors continued
Market risk continued
Less than 3 months | Between 3 months and 1 year | Between 1 and 5 years | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| At 31 December | £m | £m | £m | £m | £m | £m |
| Fixed rate | ||||||
SME loans at amortised cost | 0.2 | 1.1 | 0.1 | 0.6 | 1.8 | 5.0 |
Investment in trusts and co-investments | — | — | — | — | 17.8 | 25.2 |
Lines of credit | 49.8 | 50.0 | 47.3 | — | — | — |
| SME loans fair value through profit | ||||||
and loss 1 | 0.7 | 0.6 | — | 13.5 | 0.5 | 4.5 |
Bank borrowings 2 | — | — | — | — | — | (2.2) |
| Floating rate | ||||||
Cash and cash equivalents | 187.6 | 221.4 | — | — | — | — |
Bank borrowings 2 | — | — | (101.9) | (54.7) | — | — |
238.3 | 273.1 | (54.5) | (40.6) | 20.1 | 32.5 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 165
16. Financial risk management continued
Financial risk factors continued
Market risk continued
b) Interest rate risk continued
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024166
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
16. Financial risk management continued
Financial risk factors continued
Market risk continued
d) Foreign exchange risk continued
31 December 2024 | 31 December 2023 | |||||||
| USD | GBP | EUR | Total | USD | GBP | EUR | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
| Cash and cash | ||||||||
equivalents | — | — | — | — | 0.2 | — | — | 0.2 |
Intra-group assets | — | — | 0.1 | 0.1 | — | — | 0.2 | 0.2 |
| Intra-group | ||||||||
liabilities | — | — | (0.5) | (0.5) | (45.5) | — | (0.3) | (45.8) |
Appreciation in pound sterling | Depreciation in pound sterling | |||||||
| Income | Income | Income | Income | |||||
| statement | Equity | statement | Equity | statement | Equity | statement | Equity | |
| 2024 | 2024 | 2023 | 2024 | 2024 | 2024 | 2023 | 2024 | |
| At 31 December | £m | £m | £m | £m | £m | £m | £m | £m |
US dollars | — | — | — | (3.0) | — | — | — | 3.7 |
Euros | — | (1.0) | — | 0.9 | — | 0.8 | — | (1.1) |
— | (1.0) | — | (2.1) | — | 0.8 | — | 2.6 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 167
16. Financial risk management continued
Capital management continued
| 31 December | 31 December | 31 December | 31 December | |
| 2024 | 2024 | 2023 | 2023 | |
| Number | £ | Number | £ | |
| Called up, allotted and fully paid | ||||
Ordinary shares of £0.001 at beginning of the year | 361,303,143 | 361,303 | 361,303,143 | 361,303 |
Share buybacks | (33,367,364) | (33,367) | — | — |
Ordinary shares of £0.001 at end of the year | 327,935,779 | 327,936 | 361,303,143 | 361,303 |
| 2024 | 2023 | |
| £m | £m | |
At 1 January | 293.1 | 293.1 |
Exercise of options – proceeds received | 0.5 | — |
Capital reduction | (293.5) | — |
At 31 December | 0.1 | 293.1 |
| £m | |
At 1 January 2023 | 16.9 |
Exchange difference on translating the net assets of foreign operations | (2.7) |
At 31 December 2023 | 14.2 |
Exchange difference on translating the net assets of foreign operations | (0.2) |
Reclassification to profit and loss on disposal of discontinued operations | (8.7) |
At 31 December 2024 | 5.3 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024168
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
| £m | |
At 1 January 2023 | (48.6) |
Transfer of share option costs | 3.8 |
Purchase of own shares | (1.8) |
Loss for the year | (38.3) |
At 31 December 2023 | (84.9) |
Transfer of share option costs | 6.6 |
Buyback and cancellation of own shares | (33.6) |
Capital reduction | 293.5 |
Loss for the year | 8.6 |
At 31 December 2024 | 190.2 |
21. Share-based payment
The Company operates share schemes for all employees of the Group. The terms of the main current schemes from
which the Group’s employees benefit are set out below.
Post-IPO employee share plans
Since the Company’s admission on the London Stock Exchange, the Company has operated a discretionary
share-based Long-Term Incentive Plan (“LTIP”). In November 2020, the Company introduced a Share Incentive Plan
(“SIP”) approved by HMRC, which includes partnership shares and matching shares. This plan is now only relevant for
UK-based employees.
The main features of the LTIP and SIP are set out below.
Post-IPO – LTIP
Form of LTIP Awards
The Board grants awards in the form of restricted stock units at no cost or options to acquire shares at no cost
(a nil-cost option).
Performance conditions
LTIP Awards are not currently subject to performance conditions with the exception of LTIP Awards granted to
Executive Directors which are subject to performance conditions. Refer to the Remuneration Report for further details.
Any performance condition may be amended or substituted if one or more events occur which cause the Board to
reasonably consider that an amended or substituted performance condition would be more appropriate and would not
be materially less difficult to satisfy than originally intended.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 169
21. Share-based payment continued
Post-IPO employee share plans continued
Post-IPO – LTIP continued
Vesting and release of LTIP Awards
LTIP Awards granted to employees, excluding Executive Directors, currently vest subject to continued service only
(“Time-Based Vesting”) in accordance with a vesting schedule set at grant.
LTIP Awards granted to Executive Directors vest at the end of three years subject to achievement of performance
conditions. Further details are shown in the Remuneration Report.
The Board may determine at grant that an LTIP Award is subject to an additional holding period following vesting
(a “Holding Period”). LTIP Options will be exercisable from the date of vesting or, if applicable, the end of the Holding
Period until the tenth anniversary of the grant date, or such earlier date as the Board determines.
Cessation of employment
LTIP Options may normally be exercised to the extent vested for a period of six months after ceasing employment or
12 months after death (or such other period as the Board may determine).
Post-IPO – SIP
Form of SIP Awards
The Board grants awards in the form of partnership shares and matching shares.
Performance conditions
There are no performance conditions attached to partnership shares and matching shares.
Free shares
Until 2022 under the SIP, all UK employees were eligible to receive up to a maximum of £3,600, or 10% of annual salary
if less, of free shares per tax year. Free shares were awarded annually with a forfeiture period of two years and a
holding period of three years.
Matching shares
UK employees are invited to buy partnership shares from pre-tax salary with a maximum investment in each tax year
of £1,800, or 10% of annual salary if less. Partnership shares are purchased every month. Employees can withdraw
partnership shares from the SIP at any time although there are tax advantages if the shares are retained in the SIP for
at least three years.
Up to 2022 participants were awarded one matching share for every one partnership share they purchased, and from
2023 this was increased to two matching shares for every partnership share purchased. There are tax advantages to
participants if the matching shares are retained in the SIP for at least three years.
Whilst employed by the Company, a participant will forfeit a corresponding number of matching shares if they choose
to transfer partnership shares out of the SIP within three years of the date of purchase.
Under normal circumstances, if a participant leaves the Company before the second anniversary of the date of award,
they will forfeit their matching shares. If they leave between two and three years of the date of award, they retain
their matching shares but those shares must be removed from the SIP and any tax advantages are lost. If a participant
leaves under special circumstances, they will retain all of their matching shares, regardless of how long they have been
held in the SIP.
Pre-IPO employee share plans
EMI Options
Prior to June 2014, the Company issued options to UK subsidiary undertakings’ employees under the EMI Options
Scheme. Since then, the Company is not eligible to issue under the scheme.
Unapproved Options
The Company had an Unapproved Options Scheme for all employees of the Group. In accordance with standard
vesting terms, the full award vested four years after the vesting start date, with 25% vesting on the first anniversary of
the vesting date and 6.25% every three months thereafter. If the options remain unexercised after a period of ten years
from the date of grant, the options expire.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024170
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
21. Share-based payment continued
Pre-IPO employee share plans continued
US Options Scheme 2
Options granted under the US Options Scheme 2 are Unapproved Options granted to US employees as either
non-qualifying options or incentive stock options. The US Options Scheme 2 has the same vesting period as
Unapproved Options. If the options remain unexercised after a period of ten years from the date of grant, the options
expire. Unvested options are forfeited if the employee leaves the Group before the options vest. New grants under this
scheme ceased in 2018 upon IPO.
All share-based incentives are subject to service conditions. Such conditions are not taken into account in the fair
value of the service received. The fair value of services received in return for share-based incentives is measured
by reference to the fair value of share-based incentives granted. The estimate of the fair value of the share-based
incentives is measured using market prices. When market prices do not exist for shares or rights to shares with similar
characteristics, fair value is determined by using a valuation technique (either the Monte Carlo or Black-Scholes pricing
model as is most appropriate for each scheme).
Charge for the year
Included in operating expenses of the Group is a charge for share-based payments and associated social security
costs of £7.8 million (2023: £3.8 million) that arises from transactions accounted for as equity-settled share-based
payment transactions from continuing operations and £1.0 million (2023: £1.8 million) from discontinued operations.
Additionally, an exceptional credit of £1.7 million (2023: £nil) is included within discontinued operations relating to
lapses of share-based payments on the sale of the US business.
Movements in share plans
Details of movements in the share schemes during the year are as follows:
| Free shares | ||||||||||||
| Unapproved | and matching | US Options | ||||||||||
| EMI Options | Options | shares | LTIP Awards | Schemes | Total | |||||||
Number and WAEP 1 | Number and WAEP | Number and WAEP | Number and WAEP | Number and WAEP | Number and WAEP | |||||||
Number | £m | Number | £m | Number | £m | Number | £m | Number | £m | Number | £m | |
| Outstanding | ||||||||||||
| at 1 January | ||||||||||||
2023 | 141,300 | 0.026 | 5,009,896 | 0.314 | 4,833,226 | — | 19,860,718 | — | 2,816,272 | 0.431 | 32,661,412 | 0.097 |
| Granted | ||||||||||||
during the year | — | — | — | — | 653,742 | — | 21,443,472 | — | — | — | 22,097,214 | — |
| Exercised | ||||||||||||
during the year | (96,000) | 0.027 | (386,367) | 0.143 | (383,116) | — | (2,971,351) | — | (3,034) | 0.516 | (3,839,868) | 0.014 |
| Forfeited | ||||||||||||
during the year | — | — | (938) | 0.440 | (711,218) | — | (4,792,300) | — | (40,888) | 0.522 | (5,545,344) | 0.004 |
| Outstanding | ||||||||||||
| at 31 | ||||||||||||
| December | ||||||||||||
2023 | 45,300 | 0.024 | 4,622,591 | 0.328 | 4,392,634 | — | 33,540,539 | — | 2,772,350 | 0.429 | 45,373,414 | 0.068 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 171
21. Share-based payment continued
Movements in share plans continued
| Free shares | |||||||||||||
| Unapproved | and matching | US Options | |||||||||||
| EMI Options | Options | shares | LTIP Awards | Schemes | Total | ||||||||
Number and WAEP 1 | Number and WAEP | Number and WAEP | Number and WAEP | Number and WAEP | Number and WAEP | ||||||||
Number | £m | Number | £m | Number | £m | Number | £m | Number | £m | Number | £m | ||
| Outstanding | |||||||||||||
| at 1 January | |||||||||||||
2024 | 45,300 | 0.024 | 4,622,591 | 0.328 | 4,392,634 | — | 33,540,539 | — | 2,772,350 | 0.429 | 45,373,414 | 0.068 | |
| Granted | |||||||||||||
during the year | — | — | — | — | 469,010 | — | 12,313,814 | — | — | — | 12,782,824 | — | |
| Exercised | |||||||||||||
during the year | (45,300) | 0.024 | (951,535) | 0.360 | (826,552) | — | (6,733,720) | — | (741,224) | 0.294 | (9,298,331) | 0.061 | |
| Forfeited | |||||||||||||
during the year | — | — | (141) | 0.440 | ( 717,48 | — | 0) | (13,159,091) | — | (16,093) | 0.245 | (13,892,805) | — |
| Outstanding | |||||||||||||
| at 31 | |||||||||||||
| December | |||||||||||||
2024 | — | — | 3,670,915 | 0.319 | — | 3,317,612 | 25,961,542 | — | 2,015,033 | 0.480 | 34,965,102 | 0.072 | |
1. Weighted average exercise price.
The following table summarises information about the share awards outstanding at 31 December 2024:
| Free shares | ||||||||||||||
| Unapproved | and matching | US Options | ||||||||||||
| EMI Options | Options | shares | LTIP Awards | Schemes | Total | |||||||||
Range of exercise | Number and WARCL 1 | Number and WARCL | Number and WARCL | Number and WARCL | Number and WARCL | Number and WARCL | ||||||||
| prices | Number | Years | Number | Years | Years | Number | Years | Number | Number | Years | Number | Years | ||
£0–£0.008 | — | — | 2,190,017 | 3.4 | — | 3,317,612 | 25,961,542 | 8.0 | — | — | 6.8 | 31,469,171 | ||
| £0.009– | ||||||||||||||
£0.176 | — | — | 2,033 | — | — | — | — | — | — | — | — | 2,033 | ||
| £0.177– | ||||||||||||||
£0.471 | — | — | 1,110,227 | 2.6 | — | — | — | — | 1,417,650 | 0.9 | 1.7 | 2,527,877 | ||
| £0.472– | ||||||||||||||
£1.75 | — | — | 368,638 | 3.4 | — | — | — | — | 597,383 | 3.4 | 3.4 | 966,021 | ||
— | — | 3,670,915 | 3.2 | — | 3,317,612 | 25,961,542 | 8.0 | 2,015,033 | 1.7 | 6.4 | 34,965,102 | |||
1. Weighted average remaining contractual life.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024172
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
21. Share-based payment continued
Movements in share plans continued
The following table summarises information about the share awards outstanding at 31 December 2023:
| Free shares | ||||||||||||
| Unapproved | and matching | US Options | ||||||||||
| EMI Options | Options | shares | LTIP Awards | Schemes | Total | |||||||
Range of exercise | Number and WARCL 1 | Number and WARCL | Number and WARCL | Number and WARCL | Number and WARCL | Number and WARCL | ||||||
| prices | Number | Years | Years | Number | Years | Number | Number | Years | Number | Years | Years | Number |
£0–£0.008 | — | — | 4.4 | 2,190,017 | — | 4,392,634 | 33,540,539 | 8.4 | — | — | 7.3 | 40,123,190 |
| £0.009– | ||||||||||||
£0.176 | 45,300 | 0.4 | 1.1 | 18,438 | — | — | — | — | 24,302 | 0.4 | 0.5 | 88,040 |
| £0.177– | ||||||||||||
£0.471 | — | — | 3.2 | 2,045,498 | — | — | — | — | 2,150,665 | 1.8 | 2.4 | 4,196,163 |
| £0.472– | ||||||||||||
£1.75 | — | — | 4.5 | 368,638 | — | — | — | — | 597,383 | 4.5 | 4.5 | 966,021 |
45,300 | 0.4 | 3.8 | 4,622,591 | — | 4,392,634 | 33,540,539 | 8.4 | 2,772,350 | 2.3 | 6.7 | 45,373,414 | |
1. Weighted average remaining contractual life.
Unapproved Options Scheme
There have been no Unapproved Options granted since IPO in 2018. The weighted average fair values of options
granted under the Unapproved Options Scheme and the US Options Scheme ranged between £0.73 and £1.80 per
option respectively in the previous year. These values were determined using the Black-Scholes valuation model.
The significant inputs into the model are as follows:
| 31 December | |
| Unapproved Options Scheme | 2019 |
Share price (various times during the year) | £1.89 |
Exercise price | £nil–£0.44 |
Expected life | 4 years |
Expected volatility | 48% |
Risk-free interest rate (between) | 0.93%–1.02% |
Dividend yield | Nil |
Forward exchange rate – US Options (between) | 0.769 |
LTIP Awards
Since all LTIP Awards were made post-IPO, the Company has used its share price at grant date as the fair value of the
LTIP Awards granted during the year to employees.
Free shares and matching shares
The Company has used its share price at grant date as the fair value of free shares and matching shares granted during
the year to employees.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 173
22. Notes to the consolidated statement of cash flows
Cash outflow from operating activities
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
| Profit/(loss) before taxation | ||
Continuing operations | 0.8 | (9.9) |
Discontinued operations | 8.4 | (23.3) |
Total operations | 9.2 | (33.2) |
| Adjustments for: | ||
Depreciation of property, plant and equipment | 3.2 | 4.3 |
Amortisation of intangible assets | 9.8 | 12.4 |
Modification gain | (0.4) | — |
Impairment of property, plant and equipment, intangible assets, ROU assets and investment in sublease | 0.9 | 6.2 |
Impairment of intangibles (exceptional item) | 0.3 | — |
Interest payable | 0.8 | 0.6 |
| Non-cash employee benefits expense – share-based payments and associated | ||
social security costs | 8.1 | 5.6 |
Fair value adjustments | (6.4) | (8.7) |
Movement in loan repurchase liability | (0.1) | (0.4) |
Movement in other provisions | 1.7 | 0.9 |
Share of gains of associates | — | (0.1) |
ECL impairment | 8.7 | 4.4 |
Profit on sale of the US subsidiary (exceptional item) | (9.8) | — |
Recycling of foreign exchange reserve on sale of subsidiary (exceptional item) | (8.7) | — |
Other non-cash movements | (0.2) | 0.7 |
| Changes in working capital | ||
Movement in trade and other receivables | (3.1) | (13.5) |
Movement in trade and other payables | (26.6) | 34.7 |
Tax paid | (0.1) | (0.6) |
Originations of lines of credit | (467.0) | (230.4) |
Cash receipts from lines of credit | 412.3 | 191.5 |
Net cash outflow from operating activities | (67.4) | (25.6) |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Cash and cash equivalents | 187.6 | 221.4 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024174
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
22. Notes to the consolidated statement of cash flows continued
| 1 January | Exchange | Other non-cash | 31 December | ||
| 2023 | Cash flow | movements | movements | 2023 | |
| £m | £m | £m | £m | £m | |
Bank borrowings | (22.6) | (34.9) | 0.6 | — | (56.9) |
Bonds | (23.7) | 23.4 | 0.6 | (0.3) | — |
Lease liabilities | (19.8) | 7.2 | 0.6 | (0.6) | (12.6) |
Liabilities from financing activities | (66.1) | (4.3) | 1.8 | (0.9) | (69.5) |
| Derecognition | ||||||
| of liabilities | ||||||
| related to | ||||||
| 1 January | Exchange | Other non-cash | discontinued | 31 December | ||
| 2024 | Cash flow | movements | movements | operations | 2024 | |
| £m | £m | £m | £m | £m | £m | |
Bank borrowings | (56.9) | (46.6) | — | — | 1.6 | (101.9) |
Lease liabilities | (12.6) | 3.6 | (0.3) | (5.8) | 7.5 | (7.6) |
Liabilities from financing activities | (69.5) | (43.0) | (0.3) | (5.8) | 9.1 | (109.5) |
23. Operating lease arrangements
As disclosed in notes 1 and 11, leases of low value items or short-term leases continue to be treated as
operating leases.
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Lease payments under operating leases recognised as an expense in the year 1 | 0.2 | 0.4 |
1. The current and comparative lease expense relates to discontinued operations.
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-
cancellable operating leases of £0.1 million (2023: £0.3 million).
Operating lease payments represent payments for lease assets that are individually considered low value.
24. Dividends per share
No ordinary dividends were declared or paid in the current or previous financial years.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 175
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Salaries and short-term benefits | 5.0 | 4.8 |
Equity-based compensation | 1.3 | 2.0 |
Post-employment benefits | 0.1 | 0.1 |
6.4 | 6.9 |
26. Ultimate controlling party
In the opinion of the Directors, the Group does not have a single ultimate controlling party.
28. Subsequent events
There have been no subsequent events since the balance sheet date.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024176
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
| Place of | ||||
| incorporation | ||||
| and principal | Proportion of | Directly/ | ||
| place of | ownership | indirectly | ||
| Subsidiary undertakings | business | interest | held | Registered office address |
Funding Circle Ltd | UK | 100% | Directly | 71 Queen Victoria Street, London EC4V 4AY |
Funding Circle BB Limited | UK | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
Funding Circle Eclipse Lending Limited | UK | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
| Funding Circle Focal Point Lending | UK | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
| Limited | ||||
Funding Circle Global Partners Limited | UK | 100% | Directly | 71 Queen Victoria Street, London EC4V 4AY |
Funding Circle Trustee Limited | UK | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
Made To Do More Limited | UK | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
Funding Circle Horizon Lending Limited | UK | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
Funding Circle Polaris Lending Limited | UK | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
Funding Circle CE GmbH | Germany | 100% | Directly | Rheinstraße 11, 14513 Teltow |
Funding Circle Deutschland GmbH | Germany | 100% | Indirectly | Rheinstraße 11, 14513 Teltow |
Funding Circle Connect GmbH | Germany | 100% | Indirectly | Rheinstraße 11, 14513 Teltow |
FC Forderungsmanagement GmbH | Germany | 100% | Indirectly | Rheinstraße 11, 14513 Teltow |
Funding Circle Nederland B.V. | Netherlands | 100% | Indirectly | 71 Queen Victoria Street, London EC4V 4AY |
| Subsidiary undertakings disposed | ||||
| of in the year | ||||
Funding Circle USA, Inc. 1 | USA | 100% | Directly | 707 17th Street, Suite 2200 Denver, CO 80202 |
Funding Circle Notes Program, LLC 1 | USA | 100% | Indirectly | 707 17th Street, Suite 2200 Denver, CO 80202 |
FC Marketplace, LLC 1 | USA | 100% | Indirectly | 707 17th Street, Suite 2200 Denver, CO 80202 |
Funding Circle Investor Funds, LLC 1 | USA | 100% | Indirectly | 707 17th Street, Suite 2200 Denver, CO 80202 |
FC Depositor US LLC 1 | USA | 100% | Indirectly | 707 17th Street, Suite 2200 Denver, CO 80202 |
FC Capital US III LLC 1 | USA | 100% | Indirectly | 707 17th Street, Suite 2200 Denver, CO 80202 |
FC SBA Lending LLC 1 | USA | 100% | Indirectly | 707 17th Street, Suite 2200 Denver, CO 80202 |
| Proportion of | Directly/ | |||
| Place of | ownership | indirectly | ||
| Associate entity name | incorporation | interest | held | Registered office address |
| Funding Circle UK SME Direct | Ireland | 8% | Indirectly 70, Sir John Rogerson’s Quay, Dublin 2, Ireland | |
| Lending Fund¹ |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 177
29. Interests in other entities continued
Investments in associates continued
| Proportion of | Directly/ | ||||
| Place of | ownership | indirectly | |||
| Other related party name | incorporation | Relationship | interest | held | Registered office address |
| Throgmorton Lending Designated | Ireland | Subsidiary | 100% | Indirectly | 70, Sir John Rogerson’s Quay, |
| Activity Company | of associate | Dublin 2, Ireland |
| Funding Circle | Funding Circle | |
| UK SME Direct | UK SME Direct | |
| Lending Fund I | Lending Fund I | |
| 31 December | 31 December | |
| 2024 | 2023 | |
| Summarised balance sheet (Group’s share) | £m | £m |
Non-current assets | 0.4 | 1.2 |
Current assets | 0.2 | 0.3 |
Current liabilities | — | — |
Non-current liabilities | — | — |
Net assets | 0.6 | 1.5 |
| Funding Circle | Funding Circle | |
| UK SME Direct | UK SME Direct | |
| Lending Fund I | Lending Fund I | |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Opening net assets as at 1 January | 18.3 | 32.5 |
Profit for the year | 0.4 | 1.1 |
Exchange differences | — | — |
Other comprehensive income | — | — |
Capital redemptions in the year | (11.1) | (13.8) |
Dividends paid in the year | (0.4) | (1.5) |
Closing net assets as at 31 December | 7.2 | 18.3 |
Group’s share in % | 8.3% | 8.3% |
Group’s share of net assets as at 31 December | 0.6 | 1.5 |
Accounting policy alignment | — | — |
Group’s carrying amount | 0.6 | 1.5 |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024178
Notes forming part of the consolidated financial statements continued
for the year ended 31 December 2024
29. Interests in other entities continued
Reconciliation of associates’ total shareholders’ equity to carrying amount in Funding Circle Holdings plc’s
consolidated financial statements continued
| Funding Circle | Funding Circle | |
| UK SME Direct | UK SME Direct | |
| Lending Fund I | Lending Fund I | |
| 31 December | 31 December | |
| 2024 | 2023 | |
| Summarised statement of comprehensive income (Group’s share) | £m | £m |
Gross income | 0.1 | 0.2 |
Profit for the year | — | 0.1 |
Other comprehensive income | — | — |
Total comprehensive income | — | 0.1 |
Dividends received from associates | — | 0.1 |
Capital redemptions received from associates | 0.9 | 1.1 |
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 179
29. Interests in other entities continued
Interest in other entities continued
Subsidiary undertakings | Principal activity |
Funding Circle Ltd | Acts as facilitator and performs intermediary services in respect of all loans made through the |
| Funding Circle platform in the UK and FlexiPay lines of credit. | |
Funding Circle USA, Inc. | The US operating subsidiary of Funding Circle. Acts as the administrator of the Funding Circle |
| platform in the US. This was disposed of on 1 July 2024. | |
FC Marketplace, LLC | Acts as originator and servicer of all loans made through the Funding Circle platform in the US. |
| FC Marketplace, LLC sells each loan it originates, on a servicing retained basis, to third party | |
| institutional investors or to affiliates (e.g. Funding Circle Notes Program, LLC) on an arm’s | |
| length basis. This was disposed of on 1 July 2024. | |
| Funding Circle execs | A special purpose bankruptcy remote entity which issues loan payment dependent debt |
| Program, LLC | securities to accredited investors. It uses the proceeds to purchase a specific corresponding |
| loan made through the Funding Circle platform from FC Marketplace, LLC. The entity retains | |
| the contractual rights to receive the cash flows from the loan assets it has purchased, but has | |
| assumed a contractual obligation to pay those cash flows to the holders of the debt securities. | |
| The eligibility criteria have been met to derecognise the loan assets and associated issued | |
| debt securities as a pass-through arrangement under IFRS 9. This was disposed of on | |
| 1 July 2024. | |
| Funding Circle Focal Point | Subsidiary via which CBILS loans are originated and which holds legal title to loans which are |
| Lending Limited | held via trust structures for the beneficial ownership of institutional investors. |
| Funding Circle Eclipse | Subsidiary via which RLS loans are originated and which holds legal title to loans which are |
| Lending Limited | held via trust structures for the beneficial ownership of institutional investors. |
| Funding Circle Polaris | Subsidiary via which RLS and GGS loans are originated and which holds legal title to loans |
| Lending Limited | which are held via trust structures for the beneficial ownership of institutional investors. |
| Funding Circle Deutschland | Operated the Funding Circle platform in Germany and services loans. |
| GmbH | |
Funding Circle Nederland B.V. | Operated the Funding Circle platform in the Netherlands and services loans. |
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024180
Note
31 December
2024
£m
31 December
2023
£m
Non-current assets
Investments in subsidiary undertakings 5 258.2 310.6
258.2 310.6
Current assets
Loans due from subsidiary undertakings 7 0.1 0.1
Trade and other receivables 6 0.6 0.4
Cash and cash equivalents 2, 11 97.2 48.2
97.9 48.7
Total assets 356.1 359.3
Current liabilities
Trade and other payables 8 2.4 1.8
Total liabilities 2.4 1.8
Equity
Share capital 9 0.3 0.4
Share premium account 9 0.1 293.1
Share options reserve 20.6 24.0
Retained earnings 10 332.7 40.0
Total equity 353.7 357.5
Total equity and liabilities 356.1 359.3
The Company’s profit for the year was £26. 2 million (2023: loss of £28.7 million).
The financial statements on pages 180 to 192 were approved by the Board and authorised for issue on 6 March 2025 .
They were signed on behalf of the Board by:
Director
Company registration number 07123934
The notes on pages 183 to 192 form part of these financial statements.
Company balance sheet
as at 31 December 2024
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 181
Company statement of changes in equity
for the year ended 31 December 2024
Note
Share
capital
£m
Share premium
account
£m
Share options
reserve
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1 January 2023 0.4 293.1 22.2 66.7 382.4
Loss and total comprehensive expense for
the year 10 — — — (28.7) (28.7)
Transactions with owners
Transfer of share option costs — — (3.8) 3.8 —
Purchase of own shares — — — (1.8) (1.8)
Employee share schemes
– value of employee services — — 5.6 — 5.6
Balance at 31 December 2023 0.4 293.1 24.0 40.0 357.5
Profit and total comprehensive income for
the year 10 — — — 26.2 26.2
Transactions with owners
Transfer of share option costs — — (6.6) 6.6 —
Issue of share capital/exercise of share
options 9 — 0.5 — — 0.5
Buyback and cancellation of own shares 1, 10 (0.1) — — (33.6) (33.7)
Capital reduction 1, 10 — (293.5) — 293.5 —
Employee share schemes
– value of employee services — — 3.2 — 3.2
Balance at 31 December 2024 0.3 0.1 20.6 332.7 353.7
The notes on pages 183 to 192 form part of these financial statements.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024182
Note
31 December
2024
£m
31 December
2023
£m
Net cash inflow/(outflow) from operating activities 11 1.0 (1.1)
Investing activities
Loans advanced to subsidiary undertakings 7 — (7.8)
Repayment of loans and receivables from subsidiary undertakings 12 49.8 7.8
Capital redemptions from subsidiary undertakings 5 0.8 1.0
Proceeds from the sale of subsidiary 5 32.6 —
Direct selling costs associated with sale of subsidiary 5 (2.0) —
Net cash inflow from investing activities 81.2 1.0
Financing activities
Proceeds on the issue of shares from the exercise of share options 0.5 —
Purchase of own shares — (1.8)
Share buyback (33.7) —
Net cash outflow from financing activities (33.2) (1.8)
Net increase/(decrease) in cash and cash equivalents 49.0 (1.9)
Cash and cash equivalents at the beginning of the year 48.2 50.1
Cash and cash equivalents at the end of the year 11 97.2 48.2
The notes on pages 183 to 192 form part of these financial statements.
Company statement of cash flows
for the year ended 31 December 2024
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 183
Notes forming part of the Company financial statements
for the year ended 31 December 2024
1. Material accounting policies
The separate financial statements of the Company are
presented as required by the Companies Act 2006. As
permitted by that Act, the separate financial statements
have been prepared in accordance with UK-adopted
International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable
to companies reporting under those standards. The
Company is a public company limited by shares and
registered, incorporated and domiciled in the United
Kingdom. The address of its registered office is given
on page 198.
The financial statements have been prepared on
the historical cost basis except for certain financial
instruments that are carried at fair value through profit
and loss (“FVTPL”). The material accounting policies
adopted are the same as those set out in note 1 to the
consolidated financial statements except as noted below.
These policies have been consistently applied to all the
years presented, unless otherwise stated.
The principal activities of the Company and the nature of
the Company’s operations are as a holding company for a
facilitator of finance for SMEs.
As permitted by the exemption in section 408 of the
Companies Act 2006, the profit and loss account of the
Company is not presented as part of these financial
statements. The Company made a comprehensive profit
for the year of £26.2 million (2023: comprehensive loss of
£28.7 million).
The financial statements are prepared on a going concern
basis as the Directors are satisfied that the Company has
the resources to continue in business for the foreseeable
future (which has been taken as 15 months from the date
of approval of the financial statements to 30 June 2026).
See going concern statement on pages 64 and 128.
Significant changes in the current reporting year
Sale of investment in subsidiary US business
As was previously announced in the 31 December 2023
financial results, the Company sought to divest of the US
business. A competitive bid process was undertaken with
interested parties and a sale agreement was signed on 24
June 2024 to sell the business to iBusiness Funding, LLC
and completion occurred on 1 July 2024. The Company
recognised a gain on sale of £25.9 million which is treated
as an exceptional item. Further details related to the sale
can be found in note 5.
Launch of share buyback programme
As was previously announced, the Company commenced
a share buyback programme in March 2024 to buy and
cancel up to £25 million of shares in order to return
value to shareholders. This programme was completed
on 15 October 2024 with the purchase of 27,308,339
ordinary shares, and the programme was extended to
up to a further £25 million of shares. The nominal cost
of the shares cancelled reduces the Company’s share
capital with an equal increase in the capital redemption
reserve. The full cost of the buyback inclusive of stamp
duty and broker fees is debited to retained earnings. In
the year to 31 December 2024, 33.5 million shares were
purchased for consideration of £33.7 million inclusive of
fees and expenses under the programme representing
10.3% of the called up share capital as at 31 December
2024. 0.2 million of the purchased shares were pending
cancellation as at 31 December 2024.
Capital reduction
In November 2024 shareholders approved a capital
reduction at a general meeting held by the Company,
being the cancellation of the entire amount standing
to credit the Company’s share premium account. The
capital reduction process was completed in December
2024 and resulted in the reclassification of the share
premium into retained earnings by £293.5 million. This
increased the distributable reserves of the Company to
help facilitate ongoing capital actions and return of value
to shareholders.
Summary of existing accounting policies
Investments in subsidiaries
Investments in subsidiaries are stated at cost less, where
appropriate, provisions for impairment (see note 5 for
further details).
Critical accounting judgements and key sources of
estimation uncertainty
The preparation of financial statements requires the
Company to make estimates and judgements that
affect the application of policies and reported amounts.
Where a significant risk of materially different outcomes
exists due to management assumptions or sources of
estimation uncertainty, this will represent a key source
of estimation uncertainty. Estimates and judgements are
continually evaluated and are based on experience and
other factors, including expectations of future events that
are believed to be reasonable under the circumstances.
Although these estimates are based on management’s
best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates. There
were no critical accounting judgements or key sources
of estimation uncertainty in the year ended 31 December
2024. In the prior year ended 31 December 2023 the
impairment of investment in subsidiaries was considered
a key source of estimation uncertainty particularly with
regards to the US business. Due to the sale of the US
business, the source of estimation uncertainty has
been removed. The Company assessed the remaining
investments in subsidiaries for any indicators of
impairment and determined there were none for the
year ended 31 December 2024.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024184
Notes forming part of the Company financial statements continue d
for the year ended 31 December 2024
2. Financial risk management
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework.
The risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls, and to monitor risks and ensure any limits are adhered to. The Company’s activities
are reviewed regularly and potential risks are considered.
Risk factors
The Company has exposure to the following risks from its use of financial instruments:
l credit risk;
l liquidity risk;
l market risk (including currency risk, interest rate risk and other price risk); and
l foreign exchange risk.
Principal financial instruments
The principal financial assets and liabilities of the Company, from which financial instrument risk arises, are as follows:
l loans due from related undertakings;
l trade and other receivables;
l cash and cash equivalents; and
l trade and other payables.
Categorisation of financial assets and financial liabilities
The table shows the carrying amounts and fair values of financial assets and financial liabilities by category as at
31 December 2024:
Carried at amortised cost Carried at fair value
Carrying
amount
£m
Fair value
£m
Level 1-
Based on
market
derived data
£m
Based on
individual
valuation
parameters
£m
Assets
Loans due from related undertakings 0.1 0.1 — —
Trade and other receivables 0.5 0.5 — —
Cash and cash equivalents 0.9 0.9 96.3 —
1.5 1.5 96.3 —
Liabilities
Trade and other payables — — — —
— — — —
IFRS 13 requires certain disclosures which require the classification of financial assets and financial liabilities
measured at fair value using a fair value hierarchy that reflects the significance of the inputs used in making the fair
value measurement.
Disclosure of fair value measurements by level is according to the following fair value measurement hierarchy:
l level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
l level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the assets or
liabilities, either directly or indirectly; and
l level 3 inputs are unobservable inputs for the assets or liabilities.
The Company’s financial assets measured at fair value are all categorised as level 1 in both the current year and
prior year.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 185
2. Financial risk management continued
Categorisation of financial assets and financial liabilities continued
The table shows the carrying amounts and fair values of financial assets and financial liabilities by category as at
31 December 2023:
Carried at amortised cost Carried at fair value
Carrying
amount
£m
Fair value
£m
Level 1-
Based on
market
derived data
£m
Based on
individual
valuation
parameters
£m
Assets
Loans due from related undertakings 0.1 0.1 — —
Trade and other receivables 0.2 0.2 — —
Cash and cash equivalents 1.2 1.2 47.0 —
1.5 1.5 47.0 —
Liabilities
Trade and other payables (0.2) (0.2) — —
(0.2) (0.2) — —
Financial instruments measured at amortised cost
Due to the short-term nature of the financial assets and liabilities measured at amortised cost, the carrying value
approximates their fair value.
The fair value of financial assets held at fair value, comprising cash and cash equivalents, approximates their carrying
value. Credit risk is mitigated as cash and cash equivalents are held with reputable institutions.
Financial risk factors
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial asset fails to meet its
contractual obligations, and arises principally from the Company’s receivables from related undertakings and cash and
cash equivalents held at banks.
The Company’s maximum exposure to credit risk by class of financial asset is as follows:
31 December
2024
£m
31 December
2023
£m
Current
Loans due from related undertakings 0.1 0.1
Trade and other receivables:
– Amounts due from related undertakings 0.1 —
– Accrued interest 0.4 0.2
Cash and cash equivalents 97.2 48.2
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024186
Notes forming part of the Company financial statements continue d
for the year ended 31 December 2024
2. Financial risk management continued
Financial risk factors continued
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s position.
The Company’s liquidity position is monitored and reviewed on an ongoing basis by the Directors.
The amounts disclosed in the below tables are the contractual undiscounted cash flows.
The maturity analysis of financial assets and liabilities at 31 December 2024 and 31 December 2023 is as follows:
At 31 December 2024
Less than
3 months
£m
Between
3 months and
1 year
£m
Between 1
and 5 years
£m
Over
5 years
£m
Financial assets
Trade and other receivables 0.5 — — —
Cash and cash equivalents 97.2 — — —
Loans due from related undertakings 0.1 — — —
97.8 — — —
Financial liabilities
Trade and other payables — — — —
— — — —
At 31 December 2023
Less than
3 months
£m
Between
3 months and
1 year
£m
Between 1
and 5 years
£m
Over
5 years
£m
Financial assets
Trade and other receivables 0.2 — — —
Cash and cash equivalents 48.2 — — —
Loans due from related undertakings 0.1 — — —
48.5 — — —
Financial liabilities
Trade and other payables (0.2) — — —
(0.2) — — —
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 187
2. Financial risk management continued
Financial risk factors continued
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. The Company’s market risk arises from open positions in interest-bearing assets and liabilities, to the
extent that these are exposed to general and specific market movements.
a) Other price risk
The Company is not exposed to other price risk with respect to financial instruments as it does not hold any marketable
equity securities.
b) Cash flow and fair value interest rate risk
Interest on cash and cash equivalent balances is subject to movements in base rates. The Directors monitor interest
rate risk and note that rates are expected fall in the near term. A 200 bps decrease in base rates could decrease the
annual interest earned by c.£2.0 million (2023: 200 bps decrease and c.£1.0 million).
c) Sensitivity analysis
IFRS 7 requires disclosure of sensitivity analysis for each type of market risk to which the entity is exposed at the
reporting date showing how profit or loss and equity would have been affected by changing the relevant risk variables
that were reasonably possible at that date.
As discussed above, the Company does not have significant exposure to interest rate risk, cash flow risk or other price
risk and therefore no sensitivity analysis for those risks has been disclosed.
d) Foreign exchange risk
The Company has certain investments in foreign operations, whose net assets are exposed to foreign currency
translation risk. Foreign exchange risk is disclosed in note 16 to the consolidated financial statements.
Capital management
The Company considers its capital to comprise equity share capital, share premium, share options reserve and
retained earnings.
The Directors’ objective when managing capital is to safeguard the Company’s ability to continue as a going concern
in order to provide returns for the shareholders and benefits for other stakeholders.
The Company is not subject to any externally imposed capital requirements.
The Directors monitor a number of KPIs at both the Company and subsidiary level on a monthly basis. As part of the
budgetary process, targets are set with respect to operating expenses in order to effectively manage the activities of
the Company. Performance is reviewed on a regular basis and appropriate actions are taken as required. These internal
measures indicate the performance of the business against budget/forecast and confirm whether the Company has
adequate resources to meet its working capital requirements.
Decisions related to capital allocation are discussed and monitored by the Board who considers the balance of
returning value to shareholders while maintaining sufficient capital thresholds to ensure liquidity and to ensure
sustainable growth of the Group’s business. The Company has taken measures to ensure sufficient distributable
reserves are available to support capital activities, including the filing of Interim accounts and undertaking a capital
reduction process in 2024. Distributable reserves are monitored regularly to ensure programmes such as the share
buyback programme are supportable.
3. Company profit/(loss) for the year
The Company made a comprehensive profit for the year of £26.2 million (2023: comprehensive loss of £28.7 million).
4. Employees
The Company had no employees during the current or prior year other than Directors who numbered eight
(2023: eight). The Company did not operate any pension schemes during the current or preceding year. Directors
received emoluments in respect of their services to the Company during the year of £1.9 million (2023: £1.9 million).
For further information, see the Remuneration Report on page 103.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024188
Notes forming part of the Company financial statements continue d
for the year ended 31 December 2024
5. Investments in subsidiary undertakings
2024
£m
2023
£m
Balance at 1 January 310.6 333.3
Capital contribution regarding employee services in subsidiaries 2.6 5.4
Capital additions — —
Return of capital (50.6) (1.0)
Disposal of investment in subsidiary (4.4) —
Impairment — (27.1)
Balance at 31 December 258.2 310.6
Investments in subsidiary undertakings, which are listed in note 29 of the Group financial statements, are all stated at
cost less any provision for impairment.
Year ended 31 December 2024:
Subsidiary investment
Opening
investment
balance
£m
Capital
contribution/
(redemption)
regarding
employee
services
£m
Capital
allocation
£m
Return of
capital
£m
Impairment
in year
£m
Disposal
of
investment
£m
Closing
investment
balance
£m
Dividends
recognised
in year
£m
Funding Circle UK 254.7 3.5 — — — — 258.2 —
Funding Circle Global Partners
Limited 0.8 — — (0.8) — — — 1.0
Funding Circle USA, Inc. 55.1 (0.9) — (49.8) — (4.4) — —
Funding Circle CE — — — — — — — —
Total 310.6 2.6 — (50.6) — (4.4) 258.2 1.0
Year ended 31 December 2023:
Subsidiary investment
Opening
investment
balance
£m
Capital
contribution
regarding
employee
services
£m
Capital
allocation
£m
Return of
capital
£m
Impairment
in year
£m
Disposal
of
investment
£m
Closing
investment
balance
£m
Dividends
recognised
in year
£m
Funding Circle UK 251.0 3.7 — — — — 254.7 —
Funding Circle Global Partners
Limited 1.8 — — (1.0) — — 0.8 —
Funding Circle USA, Inc. 80.5 1.7 — — (27.1) — 55.1 —
Funding Circle CE — — — — — — — —
Total 333.3 5.4 — (1.0) (27.1) — 310.6 —
During the year ended 31 December 2024 the Company sold its investment in the US business for cash consideration
of £32.6 million relative to a carrying value of £4.4 million. Associated selling costs and related costs of disposal were
£2.3 million, resulting in a net gain on disposal of £25.9 million treated as being exceptional in nature.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 189
5. Investments in subsidiary undertakings continued
During the year the Company received £0.8 million cash capital redemptions (2023: £1.0 million) and £1.0 million cash
dividends (2023: £nil) from Funding Circle Global Partners Limited. The Company received £49.8 million non-cash
capital redemptions (2023: £nil) from Funding Circle USA, Inc. in exchange for a receivable from Funding Circle Ltd.
In addition to the above, the Company recognised a capital contribution of £2.6 million (2023: £5.4 million) representing
the service cost for the employees of its subsidiaries, under the Company’s share option schemes.
During the year ended 31 December 2024, the Company identified impairment of £nil (2023: impairment of £27.1 million)
in relation to the Company’s investment in Funding Circle USA, Inc. Refer to note 1: Key sources of estimation uncertainty.
The cumulative amount of impairment losses in relation to investment in subsidiaries is £80.2 million
(2023: £217.9 million). The reduction in the year of £137.7 million related to subsidiaries disposed of in 2024.
Details of the sale of the US subsidiary investment: £m
Consideration received:
Cash consideration at prevailing exchange rate 32.6
Carrying value of investment disposed of (4.4)
Gross gain on sale 28.2
Direct transaction costs for legal, advisory and other costs (2.3)
Other disposal related costs (2.3)
Gain on sale 25.9
6. Trade and other receivables
31 December
2024
£m
31 December
2023
£m
Amounts due from related undertakings 0.1 —
Prepayments 0.1 0.2
Accrued income 0.4 0.2
0.6 0.4
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their
fair value.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024190
Notes forming part of the Company financial statements continue d
for the year ended 31 December 2024
7. Loans due from subsidiary undertakings
31 December
2024
£m
31 December
2023
£m
Stichting Derdengelden Funding Circle 0.1 0.1
Current portion 0.1 0.1
Amount due from Group undertakings
31 December 2024 31 December 2023
Group undertaking
Facility
size and
type Term Expiry
Drawn in
year
£m
Repaid
in year
£m
Interest
recognised
in year
1
£m
Drawn
balance
at the
balance
sheet
date
£m
Drawn
in
year
£m
Repaid
in year
1
£m
Interest
recognised
in year
£m
Drawn
balance
at the
balance
sheet
date
£m
Stichting
Derdengelden
Funding Circle
Loan facility
€0.1 million
Undefined None but
repayable
on demand
— — — 0.1 — — — 0.1
Funding Circle
Ltd
Loan facility
£20.0 million
5 years 5 August
2025
— — — — — — — —
Funding Circle
CE GmbH
Revolving
credit facility
€2.0 million
5 years 18 July
2024
— — — — — — — —
Funding Circle
USA, Inc.
2
Term loan
facility £7.7
million
5 years 13 January
2025
— — — — — — — —
Funding Circle
USA, Inc.
2
Revolving
credit facility
$3.0 million
5 years 27 January
2025
— — — — — — — —
Funding Circle
USA, Inc.
2
Revolving
credit facility
£10.0 million
5 years 21 January
2026
— — — — 7.8 (7.8) — —
1. All drawn balances on loan facilities bear interest at 3.5% above the base rate of the Bank of England (except Stichting Derdengelden Funding Circle which is 4%
above the base rate) and is repayable with the principal amount at the end of the facilities term.
2. All loans to Funding Circle USA,Inc. were terminated prior to the sale of the subsidiary business in 2024.
8. Trade and other payables
31 December
2024
£m
31 December
2023
£m
Accruals 1.3 1.2
Taxes and social security costs 1.1 0.4
Other creditors — 0.2
Amounts due to related undertakings — —
2.4 1.8
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
9. Share capital and share premium account
The movement on these items is disclosed in notes 17 and 18 to the consolidated financial statements.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 191
10. Retained earnings
£m
At 1 January 2023 66.7
Transfer of share option costs 3.8
Purchase of own shares (1.8)
Loss for the year (28.7)
At 31 December 2023 40.0
Transfer of share option costs 6.6
Buyback and cancellation of own shares (33.6)
Capital reduction 293.5
Profit for the year 26.2
At 31 December 2024 332.7
11. Notes to the Company statement of cash flows
Cash inflow/(outflow) from operating activities
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Profit/(loss) before taxation 26.2 (28.7)
Adjustments for:
Non-cash employee benefits expense – share-based payments 1.4 —
Impairment charge — 27.1
Net proceeds from sale of US subsidiary (see note 5) (25.9) —
Other non-cash movements — 0.1
Changes in working capital
Movement in trade and other receivables (0.3) 0.1
Movement in trade and other payables (0.4) 0.3
Net cash inflow/(outflow) from operating activities 1.0 (1.1)
Cash and cash equivalents
2024
£m
2023
£m
Balance at 1 January 48.2 50.1
Cash flow 49.0 (1.9)
Balance at 31 December 97.2 48.2
These comprise cash held by the Company, short-term bank deposits with an original maturity of three months or
less and money market funds. The carrying amount of cash balances approximates their fair value. As at 31 December
2024, money market funds totalled £96.3 million (2023: £47.0 million).
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024192
Notes forming part of the Company financial statements continue d
for the year ended 31 December 2024
12. Related parties
Amounts owed by related parties Amounts owed to related parties
31 December
2024
£m
31 December
2023
£m
31 December
2024
£m
31 December
2023
£m
Short-term payables/receivables
Funding Circle Ltd 0.1 — — —
Intercompany loans
Stichting Derdengelden Funding Circle 0.1 0.1 — —
0.2 0.1 — —
During the year, the Company made payment of expenses for amounts of £0.1 million (2023: received payment of
expenses for amounts of £0.5 million) from Funding Circle Ltd.
During the year, the Company received a return of capital of £0.8 million (2023: £1.0 million) from Funding Circle Global
Partners Limited and dividends of £1.0 million (2023: £nil).
During the year, Funding Circle USA, Inc. made a non-cash return of capital to the Company of £49.8 million in
exchange for the assignment of the subsidiary’s intercompany receivable from Funding Circle Ltd. The intercompany
balance was subsequently cash settled by Funding Circle Ltd during the same year in full.
As at the year end, the Company was owed a cumulative amount of £0.1 million (2023: £0.1 million) from loans with
Stichting Derdengelden Funding Circle.
See note 14 in relation to remuneration of key management personnel.
13. Parent Company guarantee – exemption from audit for subsidiary companies
The following UK entities, all of which are 100% owned by the Group, are not subject to an audit by virtue of section
479A of the Companies Act 2006 relating to subsidiary companies:
Company Registration number
Funding Circle BB Limited 12593368
Funding Circle Eclipse Lending Limited 12570773
Funding Circle Focal Point Lending Limited 12407296
Funding Circle Global Partners Limited 10554628
Funding Circle Polaris Lending Limited 13216286
Funding Circle Trustee Limited 07239092
The Company will guarantee the debts and liabilities of the above UK subsidiary undertakings at the balance sheet
date in accordance with section 479C of the Companies Act 2006. The Company has assessed the probability of loss
under the guarantee as remote.
The Company will guarantee the debt and liabilities of the European subsidiary Funding Circle CE GmbH and therefore
meets the requirements of section 264(3) HGB and the entity is not subject to audit by virtue of this guarantee. The
Company has assessed the probability of loss under the guarantee as remote.
The following UK entities, which are 100% owned by the Group, are exempt from the requirement to prepare accounts
by virtue of section 394A and section 448A of the Companies Act 2006 relating to the individual accounts of dormant
subsidiaries:
Company Registration number
Funding Circle Horizon Lending Limited 13451185
Made To Do More Limited 10575978
14. Remuneration of key management personnel
The remuneration of key management personnel is disclosed in note 25 to the consolidated financial statements.
15. Ultimate controlling party
In the opinion of the Directors, the Group does not have a single ultimate controlling party.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 193
Alternative performance measures
The Group uses a number of alternative performance measures (“APMs”) within its financial reporting. These measures
are not defined under the requirements of IFRS and may not be comparable with the APMs of other companies.
The Group believes these APMs provide stakeholders with additional useful information in providing alternative
interpretations of the underlying performance of the business and how it is managed and are used by the Directors
and management for performance analysis and reporting. These APMs should be viewed as supplemental to, but not
as a substitute for, measures presented in the financial statements which are prepared in accordance with IFRS.
APM
Closest equivalent IFRS
measure
Adjustments to reconcile to
IFRS measure Definition
Income statement
Adjusted EBITDA EBITDA, while not
defined under IFRS, is a
widely accepted profit
measure.
Refer to note 5. Profit for the year before finance costs (being
the discount unwind on lease liabilities), taxation,
depreciation and amortisation and impairment
(“AEBITDA”) and additionally excludes share-based
payment charges and associated social security
costs, foreign exchange and exceptional items.
Net investment
income
Net income. Refer to Finance Review. Net investment income represents investment
income less investment expense.
Cash flow
Free cash flow Cash generated from
operating activities.
Refer to Finance Review. Net cash flows from operating activities less the cost
of purchasing intangible assets, property, plant and
equipment, lease payments and interest received. It
excludes the warehouse and securitisation financing
and funding cash flows and excludes cash flows on
drawdowns and repayment of FlexiPay lines of credit.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024194
Glossary
Term Definition
Amortisation
In lending terms, the process by which the outstanding balance on a loan reduces through repayments
made by the borrower, until the loan is fully repaid. Not to be confused with the general accounting
term relating to the equivalent form of depreciation for intangible assets.
BBB
British Business Bank. A state-owned economic development bank established by the UK government.
Its aim is to increase the supply of credit to small and medium-sized enterprises as well as providing
business advice services. The BBB has administered all the recent government-backed loan schemes
in the UK on behalf of the Secretary of State for Business, Energy & Industrial Strategy.
Balances under
management
Includes LuM and drawn lines of credit balances along with Cashback credit card spend balances. It
excludes defaulted balances and excludes unallocated cash collections. It is a measure of the balances
serviced by the Group at a point in time.
BBLS
Bounce Back Loan Scheme. A UK government-backed low fixed interest loan scheme intended to
support businesses through the Covid-19 pandemic. The scheme facilitated loans of a maximum of
£50,000 for up to six years, and these were 100% backed by a government guarantee for the lender.
The borrower always remained fully liable for the debt. All Funding Circle loans under BBLS were to
existing non-government-guaranteed lending customers and Group total lending under the scheme
amounted to c.£35 million.
Beta testing
(“beta”)
The second phase of testing a new product using real customers in a live but restricted environment.
Borrowers
Actual or prospective borrowers participating on the Group’s lending platform.
Cashback credit
card
Cashback credit card refers to Funding Circle’s business credit card offering launched in H2 2024.
Cardholders can spend earning cashback of 2% for an introductory period before reducing to 1%
thereafter.
Capital Markets
A functional division within Funding Circle that deals with all relations and activities associated with
institutional investors.
CBILS
Coronavirus Business Interruption Loan Scheme. UK government-backed loan scheme intended to
provide support for SMEs (up to £45 million annual turnover) through the Covid-19 pandemic. The
scheme facilitated loans from £1,000 to £5 million for up to six years, with the first 12 months of interest
charges, and lender levied fees covered by the government. The loans were initially 80% backed by
government guarantee for the lender, reducing later to 70%, but the borrower always remained fully
liable for the debt. CBILS closed to new applications on 31 March 2021. Funding Circle was the third
largest approver through the scheme among 90 accredited providers, facilitating c.£3 billion of loans.
Transaction fee yields on CBILS loans were fixed at 4.75%.
Circlers
A term used by the Group to refer to its employees.
Cohorts
A term used to denote loan groupings. Loan cohorts are determined by their year of origination.
Investor cohorts denote loan groupings according to the loan funding institution.
Company
When capitalised, “Company” refers to Funding Circle Holdings plc.
Credit bureau
(“bureau”)
A company that collects information relating to credit ratings of companies and/or individuals and
makes this available to other financial institutions.
Credit extended
This includes Term Loan Originations and FlexiPay line of credit and Cashback credit card transactions.
It is a measure of the volume of new transactions and lending to SMEs over a period of time.
Credit model
A mathematical model used to estimate the probability for a customer to default on a loan.
Default
A term used to describe loans where the customer has failed to repay a loan in accordance with the
terms of the agreement. Loans are placed into default when it is deemed likely the customer can no
longer meet the terms of the scheduled loan repayments (e.g. due to company liquidations and
insolvencies) or when the borrower has consistently failed to pay in accordance with the terms and it
has not been possible to arrange an alternative repayment schedule. A default affects the credit score
of the borrower.
Delinquencies
A term used to describe loans where the borrower is late making payment(s). This need not affect a
customer’s credit score if the borrower is able to agree and meet a revised schedule for repayments.
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 195
Term Definition
Developing Markets
(“Other Term
Loans”)
The name formerly used for the primary reporting segment for the Group subsequently referred
to as “Other Loans” and now reported within the UK Term Loans segment on the basis of materiality,
consisting of operations in Germany, the Netherlands and Spain (all of which the Group has now
exited and are in wind down).
EBT
Employee Benefit Trust. A trust under which shares in the Company are held on behalf of
the employees.
Employee
engagement score/
index
Employee engagement is a function of the relationship between the Group and its employees. We
measure this through surveys designed to help understand and improve the workplace and culture so
that our employees feel more connected and dedicated to the Group goals and values.
ERMF
Enterprise Risk Management Framework.
FCA
Financial Conduct Authority. The UK institution responsible for regulating financial institutions.
FlexiPay
FlexiPay is Funding Circle’s line of credit product that allows businesses to make purchases and then
spread the cost over between three and twelve months, paying back in three equal monthly
instalments. It’s designed to satisfy the working capital needs of SME businesses and is currently
available in the UK.
FlexiPay card
FlexiPay card is another way for customers to use their FlexiPay line of credit, helping them to pay for
everyday business expenses and make purchases.
Forward flow
agreements
Agreements made between Funding Circle and institutional investors that indicate the lending funds
they intend to provide for borrowers. Agreements generally stipulate the key lending terms, target
borrower metrics, total funds earmarked for lending and the period over which they will be deployed.
FVTPL
Fair Value Through Profit or Loss. A term used to describe those securities where the business model
under which these investments are held by the Group remains for these to be sold; and hence the fair
value of these investments is reported through the P&L.
Government-
backed loan
schemes
A term used to describe the various schemes deployed by governments to support their economies
through economic shocks, most recently the Covid-19 pandemic. These include CBILS, BBLS and RLS
in the UK and PPP in the US (see definitions). Invariably, government-backed loan schemes have
conferred various advantages to either or both the institutional investors and the borrowers making
them more attractive products compared to normal commercial lending. Lenders and lending platforms
normally require formal accreditation to be able to provide the loans under these schemes.
Growth guarantee
scheme (“GGS”)
Growth Guarantee scheme. A UK government-backed loan scheme and successor to RLS with similar
terms (see below).The government provided lenders under the scheme with 70% guarantees against
the outstanding balance of the facility after normal recovery processes. The borrower always remains
fully liable for the debt.
IFRS
International Financial Reporting Standards, as adopted by the European Union.
Institutional
investors
Actual or prospective institutional investors participating on the Group’s platform who provide the
funds to lend to SME borrowers, and who also take the credit risk associated with the loans.
Invested capital
Investment in Funding Circle lending products the Group has strategically made and retains on its
balance sheet net of related borrowing liabilities. Invested capital can be monetised if liquidity
needs arise.
LuM
Loans under Management. The total value of outstanding principal and interest to borrowers; includes
amounts that are overdue (delinquencies), but not loans that have defaulted and excludes unallocated
cash collections.
LTIP
Long-term Incentive Plan. A scheme used to reward employees.
Marketplace
A term used to describe our referral of borrowers (who fall outside our credit risk or service capability)
to specialist lenders who can meet their needs. Funding Circle generally receives a fee for
such referrals.
Ninth-generation
We use generational factors at Funding Circle to describe the number of fundamental enhancements/
revisions that have been made to the credit modelling used to determine borrower creditworthiness for
lending. In the UK we are currently using a ninth generation credit model.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024196
Term Definition
NPS
Net Promoter Score. An index ranging from -100 to +100 that measures the willingness of customers to
recommend a company’s products or services to others. The more positive the score, the more likely a
customer is to recommend the service.
Origination
A term used to describe the process of a loan taken out by a borrower.
Peer-to-peer
lending
Peer-to-peer lending. A legacy service that facilitated retail investments in loans to SME businesses on a
retail platform. Funding Circle paused P2P lending in April 2020, and in March 2022 the Group confirmed
that it would permanently close the retail platform for new investments. Some legacy historical P2P
lending remains on the Group balance sheet, but this will reduce to £nil as the loans continue to amortise.
PPP
Paycheck Protection Program. A US government, SBA-backed loan scheme to help SMEs keep their
workforces employed during the Covid-19 pandemic. Borrowers were able to apply for forgiveness on
these loans where they could prove that the proceeds have been spent on payroll costs and other
eligible expenses. The scheme closed to new business on 31 May 2021. Accounting for PPP loans
differed to normal loans with transaction fees spread over the expected life of the loans under IFRS 9
(as the loans had to be held on balance sheet at amortised cost until forgiven), and with no servicing
fees earned on PPP loans. The PPP loans were deconsolidated with the sale of the US business in 2024.
PPPLF
The Paycheck Protection Program Liquidity Facility. The name of the funding facility used by the US
government for PPP loans.
RLS
Recovery Loan Scheme. A UK government-backed loan scheme to help businesses recover from the
effects of Covid-19. To date, there have been three different RLS schemes, designed to support access
to finance for UK businesses as they looked to invest and grow. Term Loans of up to £2 million and six
months have been available through the scheme at improved commercial terms. The government
provided lenders under the scheme with 70% guarantees against the outstanding balance of the
facility after normal recovery processes. The borrower always remains fully liable for the debt.
SBA
Small Business Administration. A US governmental institution established in 1953 to help SMEs succeed
by providing counselling, capital, contracting expertise, information resources and a voice for SMEs.
Securitisation
The process by which multiple loans are pooled and packaged into interest-bearing securities (bonds).
Horizontal securitisation denotes the packaging of loans into cohorts ranked according to risk
potential: from the lowest risk, lowest reward, first receiver of loan yield, to the highest risk, highest
reward bearer of first losses and receiver of surplus yield on the loans. In terms of existing horizontal
securitisations on the Group balance sheet, Funding Circle temporarily holds the residual tranches
with the intention to sell once seasoned.
Vertical securitisation denotes a packaging of loans where all investors take their share of the yield
across the entire pool of loans. In terms of existing vertical securitisations on the Group balance sheet,
Funding Circle was required by regulation to retain a 5% equal participation in all classes of bonds issued.
Segment
The principal reporting segments of our operations, representing the divisional structure through
which the business is currently managed. Namely UK Term Loans, and FlexiPay being the continuing
operations segments and US Term Loans being the discontinued operation segment, presented
separately in discontinued operations. The Other segment historically included the Group’s Term Loans
businesses in Germany and the Netherlands. The Other segment has been presented within UK Term
Loans for the year ended 31 December 2024 on the basis it is no longer individually material. See note
5 of the financial statements.
Servicing yield
The ratio of the servicing fee (the fee charged to institutional investors for managing their loans) to the
amortised loan balance. Typically, the servicing yield is between 1% and 1.25% pa of the loan balance.
SME
Small and medium-sized enterprises. A term used in the UK to represent smaller businesses.
SONIA
Sterling Overnight Index Average. A UK interest rate benchmark that came in as a replacement for
LIBOR (London Interbank Offer Rate).
SPV
Special Purpose Vehicle. A subsidiary created by a company to isolate a financial risk. The Group has
held a number of SPVs housing securitised loans.
TAM
Total Addressable Market. An estimation of the total potential market value for which Funding Circle
can compete.
Unrestricted cash
A term used to describe the cash on the balance sheet that is available for use by Funding Circle. This
excludes cash balances being held on behalf of third parties, like governments and bondholders.
Warehousing
A process whereby loans that have been issued to borrowers are pooled into a holding warehouse with
the intention that these are ultimately being held for packaging and reselling to a third party investor.
Glossary continued
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Funding Circle Holdings plc | Annual Report and Accounts 2024 197
Shareholder information
Receiving shareholder information by email:
You can opt to receive shareholder information from
us by email rather than by post. We will then email
you whenever we add shareholder communications
to the Company website. To set this up, please visit
www.shareview.co.uk and register for electronic
communications (“e-comms”).
If you subsequently wish to change this instruction or
revert to receiving documents or information by post, you
can do so by contacting the Company’s registrars at the
address shown in the Company information opposite. You
can also change your communication method back to
post by logging in to your Shareview account and going
to “update my communication preferences” within the
“Quick links” section.
Registrar
The Company’s registrar is Equiniti Limited.
Equiniti provides a range of services to shareholders.
Extensive information including many
answers to frequently asked questions can
be found online.
Use the QR code to register for FREE or
visit www.shareview.co.uk
Equiniti’s registered address is:
Highdown House, Yeoman Way, Worthing,
West Sussex, BN99 3HH
Tel*: +44 (0) 371 384 2030
* Lines are open from 8.30am to 5.30pm, UK time Monday to Friday
(excluding public holidays in England and Wales).
Please use the country code when dialling from
outside the UK.
Shareholder enquiries
If you have any queries relating to your shareholding,
dividend payments or lost share certificates, or if any
of your details change, please contact the Company’s
registrars by visiting www.shareview.co.uk or by using
the telephone number above.
Annual shareholder calendar
Final results announced 6 March 2025
Annual Report published April 2025
Annual General Meeting 15 May 2025
Interim Report
As part of our e-comms programme, we have decided
not to produce a printed copy of our Interim Report.
We will instead publish the report on our website. It is
expected that this year’s report will be available on our
website in September.
Cautionary statement
Certain statements included in our 2024 Annual
Report, or incorporated by reference to it, may
constitute “forward-looking statements” in respect
of the Group’s operations, performance, prospects
and/or financial condition.
Forward-looking statements involve known and
unknown risks and uncertainties because they
are beyond the Group’s control and are based
on current beliefs and expectations about future
events about the Group and the industry in which
the Group operates.
No assurance can be given that such future results
will be achieved; actual events or results may differ
materially as a result of risks and uncertainties
facing the Group. If the assumptions on which
the Group bases its forward-looking statements
change, actual results may differ from those
expressed in such statements. The forward-
looking statements contained in this report reflect
knowledge and information available at the date
of this Annual Report and the Group undertakes
no obligation to update these forward-looking
statements except as required by law.
This report does not constitute or form part of any
offer or invitation to sell, or any solicitation of any
offer to purchase, any shares or other securities in
the Company, and nothing in this report should be
construed as a profit forecast.
CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2024198
Company information
Directors
Executive Directors
L Jacobs (Chief Executive Officer)
T Nicol (Chief Financial Officer)
Non-Executive Directors
A D Learoyd (Chair)
K Stannard (Incoming Chair)
G Gopalan
H W Nelis
N A Rimer
H Beck
Company Secretary
L K Vernall
Independent statutory auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
Bankers
Barclays Bank UK plc
1 Churchill Place
London E14 5HP
Registrars
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Brokers
Investec
30 Gresham Street
London EC2V 7QN
Deutsche Numis
The London Stock Exchange Building
10 Paternoster Square
London EC4M 7LT
Registered office
71 Queen Victoria Street
London EC4V 4AY
Registered number
07123934
STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Funding Circle Holdings plc’s commitment to environmental issues is reflected
in this Annual Report, which has been printed on Amadeus Silk, an FSC
®
certified material.
This document was printed by Pureprint Group using its environmental print
technology, with 99% of dry waste diverted from landfill, minimising the impact
of printing on the environment. The printer is a CarbonNeutral
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Funding Circle Holdings plc
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