Annual Report 2025
growth
A platform for
Featured on the cover:
Fast access to funds enabled
The Nest Climbing to expand its
facilities in West London.
More information online at
corporate.fundingcircle.com
We’re the UK’s leading SME
finance platform, backing
small businesses withthe
funding they need to win.
02 About us
04 Summary of the year
06 Chair’s statement
10 Chief Executive’s statement
12 Our business model
14 Our strategy
16 Key performance indicators
18 Our customers
20 Our products
22 Technology and data
26 Our people
30 Environmental, social
and governance (“ESG”)
44 Non-financial and sustainability
information statement
45 Engaging our stakeholders
49 Financial review
57 Risk management
61 Principal risks and uncertainties
69 Viability and going
concern statements
72 Chair’s introduction
73 Governance at a glance
74 Board of Directors
76 Corporate governance report
84 Report of the Nomination
Committee
88 Joint Report of the Audit and
Risk Committees
94 Report of the ESG Committee
96 Directors’ remuneration report
112 Report of the Directors
115 Statement of Directors’
responsibilities in respect
of the 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
176 Company balance sheet
177 Company statement of changes
in equity
178 Company statement of cash flows
179 Notes forming part of the
Company financial statements
187 Alternative performance measures
188 Glossary
191 Shareholder information
192 Company information
Contents
Strategic
report
Corporate
governance
Financial
statements
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
01
Our products
Our product suite enables businesses to borrow, pay
later and spend. Enabled by our proprietary data and
AI-powered technology, we provide SMEs with the
right product at the right time to support them through
every stage of their growth.
Our market
Since 2010, we have been powering small
businesses with the funding they need by
leveraging our technology and data to deliver
a superior customer experience. With a large
and underserved market, we are proud of
theimpactwemakeinpoweringthenation’s
SMEs, which are critical to the UK economy.
5.7m
SMEs in the UK
£80bn+
SME debt outstanding
£80bn+
SME credit card transactions
Our business model
page 12
Our products
page 20
Our customers are the chocolate makers,
climbing centres and the tea mixologists
who are the backbone of the economy.
We create
Borrow
Longer term
Pay later
Monthly
Spend
Daily
About us
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
02
growth
Our impact
Weplayasmallbutimportantpartinbusinesses’lives.
When we back businesses with finance, not only does it
enable them to grow and run their businesses, but it also
supports employment and economic growth.
£7.9bn
contribution to GDP
117k
jobs supported
£2.2bn
generated in tax receipts
Chief Executive’s statement
page 10
Financial review
page 49
Our customers
page 18
Our mission is to provide the vital funding small businesses need
to succeed. By fuelling their success, we support job creation
and strengthen resilience in communities across the country.
More information online at
corporate.fundingcircle.com
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
03
growth
Profit before tax (£m) (before exceptional items)
£20.3m
20.3
3.4
(9.9)
2025
2024
2023
Revenue (£m)
£204.3m
204.3
160.1
130.1
2025
2024
2023
Credit extended (£m)
£2,453m
2,453
1,899
1,294
2025
2024
2023
Active customers (thousands)
52.7
47.9
42.0
52.7
2025
2024
2023
Summary of the year
For more detail
page 49
Financial performance
I’m delighted with our strong
performance this year. We supported
more small businesses than ever before,
saw record customer engagement,
grew profit before tax significantly and
achieved our medium-term revenue
target of more than £200 million a
year ahead of schedule.
This performance is due to our strategic
transformation, announced in 2024,
focusing on profitable, multi-product
UK growth. It demonstrates the strength
of our capital-light business model, new
product investment, and the power of
our proprietary data and technology
tomeet growing customer demand.
We enter 2026 with a clear platform
for growth as we become a more
meaningful part of our customers’
lives, serving more of their needs, and
capturing a larger share of their financing.”
Lisa Jacobs,
CEO
The Strategic Report was approved by the Board on 5 March 2026.
Lisa Jacobs
Chief Executive Officer
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
04
Funding growth
Fast access to funds enabled
The Nest Climbing to expand
its facilities in West London.
How we helped The Nest Climbing
The Nest Climbing in Hayes is more than a gym; it’s a
London sanctuary where fitness meets community.
Climbing enthusiasts Rob Lawley and Sam Hunter opened
The Nest in 2019 to make climbing inclusive, and now the
centre offers a welcoming space for bouldering, yoga, and
connection. To fuel its growth, a £22,000 Funding Circle
Term Loan provided essential funds to expand its facilities
and add a cafe, ensuring it remains a supportive ‘nest’ for its
vibrant and growing community.
Getting a fast injection of funds
meant we could expand our
business to offer a cafe as well
astop-level climbing experiences;
now we’re more embedded in
thecommunity than ever.”
Sam Hunter
Co-Founder, The Nest Climbing Limited
Funding Circle Holdings plc | Annual Report and Accounts 2025
05
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
05
I am delighted to present my first annual
statement as Chair of Funding Circle
following my appointment in May 2025.
Assuming this role through such a
transformative period for the Group is a
significant responsibility. Funding Circle’s
mission to support the small businesses
that serve as the engine of the UK economy
remains as vital today as it was at our
founding 15 years ago. Small and medium-
sized enterprises (“SMEs”) have historically
been underserved by traditional financial
institutions, and our platform is uniquely
positioned to bridge that gap with speed,
transparency, and innovation.
Before reviewing our progress, I would
like to extend my sincere gratitude to my
predecessor, Andrew Learoyd. Having
served on the Board since the Company
was founded, Andrew’s leadership was
instrumental in navigating Funding Circle
from its early stages to its current status
as a market leader.
Reflecting on a year of strategic momentum
In 2025, the Board’s oversight focused
on ensuring that the Group successfully
transitioned from its 2024 reset into a
period of high quality, profitable growth.
While the macroeconomic environment
remained uncertain, our commitment to
doing the right thing for our customers and
shareholders drove a record performance.
Following the successful execution of
our 2024 plan to become a simpler,
leaner, UK-focused business, we are now
realising the full benefits of that discipline.
Group revenue has grown significantly,
and profit before tax increased to
£20.3 million, representing a substantial
rise from the £3.4 million reported in 2024
before exceptional items. This financial
performance validates our strategic
pivot and demonstrates the operating
leverage inherent in our business model.
It is particularly pleasing to see the
established Term Loans business delivering
improved profitability alongside the scaling
of our newer transactional products.
The platform advantage and
long‑term value
A central pillar of our Board discussions
this year has been the evolution of our
‘borrow, pay later, spend’ product offering.
By moving beyond a single-product
lending model, Funding Circle is becoming
an indispensable financial partner for
SMEs, integrating itself more deeply into
their daily operations. This has increased
customer transaction from once every half
hour to every 38 seconds, providing a far
better understanding of SME needs and
improved product innovation.
As a Board, we view our proprietary
technology and data platform as the
Group’s most significant competitive
advantage. By leveraging AI-powered risk
models trained on 15 years of unique data
sets, we maintain a disciplined approach to
credit risk while providing a superior
experience for our customers. This ‘data
moat’ is not just an operational tool; it is a
structural asset that protects our market
share and drives long-term profitability.
Our ongoing investment in Generative AI
(“Gen AI”) applications is enhancing our
ability to scale efficiently while maintaining
the necessary oversight to ensure prudent
and responsible lending with a ‘human in
the loop’ approach. This is underpinned by
robust governance across the business,
including oversight from the Board Risk
Committee, management steering groups,
and internal audits of Gen AI controls.
Monitoring the risks associated with this
technology remains a key priority for the
Board in 2026.
Governance, risk, and capital allocation
A primary responsibility of the Board is
ensuring we have the right leadership and
governance structures to drive our
multi-product vision. This year, we
oversaw several important transitions.
Ken Stannard
Chair
profitable
A year of strong,
growth
Our transition to a
multi-product platform
securesFunding Circle’s
position as the primary
financial partner for the
UK’s SME ecosystem.”
Chair’s statement
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
06
We were pleased to welcome Maeve Byrne
and Richard Harvey, who both joined the
Board as Non-Executive Directors. Maeve
now chairs our Audit Committee, and
Richard our Risk Committee, both bringing
a wealth of invaluable experience from
across the financial services sector.
This year, I was pleased to join Maeve
Byrne and Helen Beck for an internal
‘All-Hands’ meeting where we discussed
our vision for the Group’s future directly
with Circlers. The Board was also proud to
celebrate International Women’s Day
through a panel discussion featuring a
customer, a broker, a Circler and Helen
Beck, whose insights we continue to
benefit from in her role as Workforce
Engagement Non-Executive Director,
ensuring the feedback of our people
remains central to our strategic discussions.
I am also grateful that Helen agreed to
become our Senior Independent Director
in July. On behalf of the Board, I would like
to extend my gratitude to Geeta Gopalan,
who served as Senior Independent
Director since 2018. Her experience and
expertise were invaluable to the business
throughout her tenure.
We have also seen an evolution within our
Executive team. At the start of the year,
Tony Nicol transitioned into the role of
Chief Financial Officer. Having previously
served as our Director of Finance and
Investor Relations, Tony succeeded
Oliver White on 1 January 2025, ensuring
a smooth and knowledgeable transition
in our financial leadership.
The Board also continues to prioritise a
disciplined capital allocation strategy.
During 2025, we maintained a robust
balance sheet while continuing to return
value to shareholders through our share
buyback programme. We believe this
balanced approach, investing in high
growth products like FlexiPay while
returning excess capital, is the most
effective way to deliver long-term Total
Shareholder Return.
Our role in the UK economy
Beyond the balance sheet, the Board
remains acutely aware of Funding Circle’s
social and economic impact. In 2025, our
lending supported thousands of jobs and
contributed significantly to the UK’s GDP
and tax receipts. By providing credit to
businesses in every one of the country’s
650 constituencies, we are playing a
tangible role in supporting local communities
and fostering economic resilience.
Looking ahead
Funding Circle is at a pivotal moment.
We have successfully transformed the
business model and are now positioned
to lead the UK’s SME finance sector into
a new era of opportunity. I want to thank
our CEO, Lisa Jacobs, her Executive team,
and all our Circlers for their unwavering
dedication to our mission. Their passion
is the foundation of our success.
I am confident that the foundations laid
in 2025 have positioned us to deliver
sustainable value for our customers and
shareholders alike. We remain focused
on our vision to be the UK’s most trusted
financial partner for small businesses.
Ken Stannard
Chair
5 March 2026
I am confident that the
foundations laid in 2025
have positioned us to
deliver sustainable value
for our customers and
shareholders alike.”
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
07
Chair’s statement continued
Q&A
Ken discusses 2025’s
record profitability, the
evolution of our multi‑
product strategy, and how
we are driving long‑term
shareholder value.
Q
You joined Funding Circle at a
pivotal moment. What was it about
the business that attracted you?
A
What compelled me to join was the
clarity of the mission and the unique
infrastructure built to achieve it. We
exist to help small businesses get the
funds they need to run and grow their
businesses, and in doing so, we help
address a significant structural gap
in the SME lending market that
traditional banks have historically
underserved. It’s a hugely exciting
time to join the business as we
transition to a UK-focused, multi-
product model. By combining high
engagement products like FlexiPay
and card with our established Term
Loans, we are building a scalable
and sustainable business that better
serves our customers and drives
long-term shareholder value.
Q
2025 saw a significant increase
in profitability. How has the Board
balanced growth with the need for
rigorous risk management?
A
Delivering profit before tax of
£20.3 million in 2025, a substantial
increase from the previous year,
validates our strategy, but the Board
remains vigilant that growth does not
come at the expense of credit quality.
Our approach combines the speed
of innovation with prudent oversight.
While we are proud that 73% of loan
decisions are instant, enabling a
frictionless experience for SMEs, we
maintain a ‘human in the loop’ policy.
This ensures that while we leverage
AI to enhance decision quality
and effectiveness, we retain the
judgement necessary to navigate
complex credit environments with a
team of experienced underwriting
experts. To maintain this balance,
we have embedded Gen AI risk
management into our Enterprise
Risk Management (“ERM”) framework
and established structural oversight
through a Gen AI steering committee
(see page 58 for further information).
The Board’s priority is to ensure
our credit models remain resilient,
evidenced by our ability to deliver
robust returns to our platform
investors even through challenging
macroeconomic cycles.
Q
Shareholders are keen to
understand your approach to
capital allocation. Why did you
prioritise buybacks in 2025?
A
The Board continuously assesses how
to deploy capital to generate the best
value. In 2025, we expanded our share
buyback programme because we have
high confidence in the Group’s intrinsic
value and its cash-generative profile.
With unrestricted cash at healthy levels
and a market share price that does not
fully reflect the growth potential of our
platform, we determined that reinvesting
in our own business is an efficient use
of funds. With our Term Loans business
consistently generating cash, we
were able to continue the buyback
programme whilst preserving the
flexibility to invest in new products
and future growth opportunities.
Q
We are seeing a shift from ‘lending’
to a broader ‘borrow, pay later,
spend’ ecosystem. How does this
change the Board’s view of the
Company’s competitive set?
A
We are moving beyond simply
competing for loans to competing for
daily relevance. By expanding our
ecosystem to include ‘borrow, pay
later, and spend’, we have transformed
the frequency of our client interactions
from once every half hour to a
transaction every 38 seconds,
deepening customer relationships as
we meet more of their needs. We are
becoming a comprehensive financial
partner for SMEs, managing their daily
cash flow through FlexiPay and spend
through our Cashback card product.
This multi-product strategy not only
deepens customer loyalty, with over
80% of FlexiPay revenue coming from
repeat borrowers, but also diversifies
our revenue streams, making the
business model more resilient.
Q
Looking ahead, what is the Board’s
role in ensuring Funding Circle
stays at the forefront of the Gen
AI developments?
A
As we transition to becoming an
AI-native business in 2026 and
beyond, the Board’s role will focus on
the responsible implementation and
governance. We are already utilising
Gen AI to improve productivity,
accelerate software development
and enhance customer experience,
amongst other things. Looking ahead,
the focus is on deeper integration
throughout the business. The Board
must ensure that as we deepen the
use of AI, we also, in parallel, enhance
the rigorous security of our proprietary
data assets, which are the fuel for this
technology. We are investing in
learning and development to ensure
the entire team is AI fluent, and we are
equally focused on ensuring these
powerful tools are deployed
responsibly to solve real
customer problems.
Q
Funding Circle contributed
significantly to UK GDP and
job support in 2025. How
does the Board view the link
between social purpose and
financial performance?
A
The Board views the ‘S’ in ESG not
as a separate initiative, but as intrinsic
to our commercial success. In 2025
alone, our lending supported 117,000
jobs and contributed £7.9 billion to
GDP. When we look at a map of the
UK, we see pins in every corner of the
country, representing businesses we
have backed in all 650 parliamentary
constituencies. By acting as a
facilitator of economic growth, we
help create an environment in which
our customers can thrive, which
directly drives the financial returns
we deliver to our shareholders.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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08
How we helped
Wick & Tallow Bespoke
Since launching in 2011, Wick & Tallow have
grown from a Portobello Market stall into a
bespoke luxury fragrance brand. Alice Malcolm
Green’s vision to bring English eccentricity
combined with operational agility to a traditional
market has led to the brand successfully expanding
beyond candles into home fragrance. Funding
Circle has supported the business with three Term
Loans since 2021 for growth, and since 2024 Alice
and her partner James have been using FlexiPay
to spread supplier payments for materials over
several months, helping them to better manage
cash flow, and enabling them to scale faster
with confidence.
We love FlexiPay, as it allows us
to pay our suppliers and split
payments over a few months,
helping us to manage cash flow
and keep up to date with invoices.”
Alice Malcolm Green
Founder, Wick & Tallow Bespoke Ltd
Funding growth
Funding Circle Holdings plc | Annual Report and Accounts 2025
09
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTSSTRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
09
I’m really proud of our performance in
2025, it has been a standout year for
Funding Circle. We supported more small
businesses than ever before, grew
revenue 28% to £204 million, achieving
our medium-term revenue target a year
ahead of schedule, grew profit before tax
(“PBT”) to over £20 million and achieved
record Circler engagement.
In 2024, we launched our plan to become
a simpler, leaner and UK-focused
multi-product business, and, after two
years of strong execution, we are realising
the benefits. Our performance was driven
by new product innovation and strong
demand, underpinned by the power of
our proprietary data and technology
and capital-light business model.
Our position as the UK’s leading SME
finance platform is stronger than ever.
We are serving a large and underserved
market, enabling businesses to borrow,
pay later, and spend, delivering a superior
customer experience and attractive
returns to our platform investors. And,
we’re still just getting started.
Business finance that backs
small businesses
For 15 years, we have backed the small
businesses that keep the UK economy
moving. We have extended c.£17 billion
of credit to over 125,000 UK businesses.
We’re passionate about what we do, the
businesses we support are the restaurants,
popcorn makers, furniture manufacturers
and flooring suppliers. They sit at the heart
of local communities, driving growth and
creating jobs, and it’s an honour to play
a small but important part in their stories.
In 2025, I enjoyed meeting Mehrdad and
Ayda at Beauty Boutique, a day spa in
Hampstead, and Atif at Interior Designs
Concepts, an interior design business in
Putney, both husband and wife teams
who told me how Funding Circle’s finance
helps them run their business supporting
purchases of aesthetics machines and
managing working capital, so they can
deliver the best for their customers. Their
stories are typical of the passionate and
dedicated SMEs we fuel across the country.
In 2025, lending through Funding Circle
supported 117,000 jobs, £7.9 billion in GDP
contribution and £2.2 billion in tax receipts.
We once again lent to businesses in every
one of the country’s 650 constituencies,
powering tens of thousands of SMEs.
Strong financial performance
We delivered a strong performance in
2025. Group revenue grew by 28% to
£204.3 million, while PBT increased
significantly to £20.3 million (2024:
£3.4 million before exceptional items).
This result was driven by growth across our
product set, product innovation, increased
demand and increased operating leverage
in our core Term Loans business.
As we have diversified our product set, I’ve
been pleased to see the impact. We now
offer over ten different products, we have
a customer transaction every 38 seconds
(vs. every half an hour in 2021), and in H2
last year, 50% of our credit extended came
from outside our core term loan products.
We remain capital-light with a robust
balance sheet. We are continuing to return
value to shareholders through share
buybacks, having purchased 17% of our
initial share capital since March 2024,
while maintaining a strong cash position
to support growth.
Strategic progress: borrow,
pay later, spend
Over the last few years, we have executed
against our multi-product strategy, driving
an expanded customer set, an increased
share of wallet and deeper customer
engagement. Today, we are a more
important part of our customers’ lives.
Lisa Jacobs
Chief Executive Officer
platform
A clear
for growth
Chief Executive’s statement
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
10
We are executing against our four strategic
pillars to drive profitable growth:
1. Get to ‘Yes’: Expanding our product
offering, improving our customer
service and our credit segmentation to
get to ‘Yes’ for more businesses. This
year we reorganised our sales teams
to better serve customers’ financial
holistic needs, launched a shorter-term
loan product, and further expanded our
Marketplace partnerships to support
those we cannot fund directly.
2. Expand our audience: Through new
distribution channels and product sets,
we are broadening the range of
customers we can serve and attract.
Our Cashback card is bringing new
customers into the Funding Circle
ecosystem. We continue to invest in
our existing direct and intermediated
distribution channels, and our new
partnership with TNT Sports, building
on our existing partnership with
Gallagher PREM Rugby, will also
put Funding Circle in front of new
SME audiences.
3. Scale our product offering: We are
driving our newer products, FlexiPay
and Cashback card, towards scale and
profitability. We have made good
progress building out product features
to offer more flexibility for customers.
4. Build a seamless lifetime customer
experience: We are serving our
customers across a broader set of
needs and by solving more problems
for our customers, we are laying the
foundations for long-term relationships
as their trusted financial partner.
We enter 2026 with a clear platform for growth as we become
a more meaningful part of our customers’ lives, serving more
of their needs and capturing a larger share of their financing,
to fuel even more SME success stories across the UK.”
Our technology and data advantage
When I speak to our customers, they want
fast and easy access to credit with a human
touch. In a small business, the owners
are the operators, the marketers and the
financiers. We provide a six-minute
application form, instant decisions for 73%
of applicants, and funding in as little as
24 hours. This drives strong satisfaction
with an NPS (Term Loans) of 79 and lets
customers focus on what they do best,
running their businesses.
We can do this thanks to our data and
technology, which delivers a competitive
advantage. Our AI-powered risk models
are trained with our proprietary data on
hundreds of thousands of loans and
transactions alongside public data
sources, discriminating risk three times
better than bureau scores alone.
We continue to invest in our technology
and data stack. Gen AI forms part of this as
we evolve into an AI-native organisation.
We are leveraging AI to improve customer
experience and productivity, from better
understanding customer sentiment and
serving customers faster, to speeding up
product development. We are deploying
Gen AI thoughtfully and safely with a
‘human in the loop’ approach.
People and culture
Our results and strategic progress are all
testament to the hard work of our Circlers.
It is their passion, commitment and
dedication that mean we continue to help
more SMEs thrive. I’m proud to work
alongside them, and delighted that we
achieved a record employee engagement
score of 74% in 2025.
This year, we launched our new ‘People
Pact’ reflecting our collective commitment
to be all in and ‘On A Mission’ every day to
back small businesses, to grow fast, to
belong together, to build better, and to be
different. At Funding Circle we are on a
mission that really matters and ultimately
reaps rewards for our Circlers, our
customers, our investors and
shareholders, and our business.
Looking ahead
When I look at the opportunity ahead, I’m
excited by the potential that we have in
continuing to become our customers’
trusted financial partner. We enter 2026
with a clear platform for growth as we
become a more meaningful part of our
customers’ lives, serving more of their
needs and capturing a larger share of their
financing, to fuel even more SME success
stories across the UK.
Lisa Jacobs
Chief Executive Officer
5 March 2026
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
11
Our business model
platform
Our unique
connects investors with customers,
helping them achieve growth
Learn more about our business:
Borrowers
SMEs seeking fast, simple finance, with products
tailored to every stage of their journey.
Deep
data lake
Funding Circle
platform
Instant decision
platform
Term Loans
Unsecured loans up to £750,000 for up to six
years, typically with a personal guarantee.
Our borrower base is highly diversified across
regions and industries, which helps ensure robust returns
and mitigates the effects of changing economic conditions.
Typical borrowers through the platform are well-established
businesses seeking efficient financing solutions.
l 10 years’ trading history
l 7 employees
l ~£750k revenue
l ~£75,000 loan size
l 4 years average term
l Six-minute application and 24-hour turnaround
60%
Marketplace
l Other credit products via Marketplace
7%
33%
FlexiPay line
of credit
Cashback
card
Our strategy
page 14
Our stakeholders
page 45
Our products
page 20
Governance
page 72
%
credit extended
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
12
Investors
Our hybrid funding model is a strategic choice that
combines a scalable capital‑light business model
with the right funding for the right product.
Strong brand
awareness
Excellent customer
experience
Predictive risk
model
How we make money
Funding Circle operates a capital-light model,
generating diverse revenue streams by
connecting borrowers with the financing
they need to win.
Our income is primarily driven by the volume of
credit extended and the ongoing management
of those assets, ensuring our interests are
aligned with the long-term success of our
investors and the growth of our borrowers.
Third party finance providers
l Panel of 28 lenders
Institutional investors
This funding is provided by a diverse group
of financial institutions that receive attractive
returns, access to a hard-to-reach asset class, portfolio
diversification, and the ability to deploy capital at scale.
By providing consistent liquidity, these institutions enable
us to support thousands of SMEs.
l Banks
l Asset managers
l Funds
l Bond programmes
93%
Funding Circle’s balance sheet
l Senior Citi facility and Funding Circle equity
7%
%
assets under management funding
Business Unit Revenue stream Driver
Term Loans Transaction fees
(incl. Marketplace referrals)
Credit extended
Servicing fees AuM
Investment income Invested capital
FlexiPay
Cashback card
Drawdown fees/
credit card interest
Interchange fees
Credit extended
Credit extended
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
13
As we scale, our strategy remains rooted in customer
centricity, relentless innovation and profitable growth.
Our strategy
ambitious
Delivering our
1
Get to ‘Yes’
We ensure businesses find the
‘Yes’ to providing the finance
they need through our products
and Marketplace partnerships.
We leverage credit and product
innovation to serve a broader
customer base and reach
more customers.
3
Scale our product offering
While our product suite is
broad, some products remain
nascent. Over the coming
years, we will scale these
products, unlocking new
features to drive innovation
and profitable growth.
2
Expand our audience
We will reach and serve
more SMEs with our newer
products, addressing new
customer needs and
expanding our distribution
and marketing channels.
4
Deliver a seamless
lifetime customer
experience
As a trusted financial partner,
we provide a superior
experience. This allows us to
solve more problems, save
our customers time and meet
more of their needs.
strategy
Following a successful multi-year transformation, Funding Circle has
emerged as a sustainably profitable business.
Our strategic objectives
Our evolution into a multi-product platform has fundamentally redefined our customer relationships; where we
once interacted with a business every half hour, we now engage every 38 seconds. Through our integrated
‘borrow, pay later, and spend’ ecosystem, we are capturing a greater share of wallet and becoming an essential
partner in our customers’ daily lives.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
14
1
Get to ‘Yes’
When our customers win, we win. Our AI-powered risk models sit
at the heart of our platform, enabling 73% of applicants to receive
an instant decision. This competitive edge allowed us to grow our
credit extended by 29% in 2025 to £2.5 billion.
During 2025 we expanded our proposition, launching a shorter-
term loan product that has already supported more than 3,000
SMEs and opened our doors to new customer segments, which
require more agile financing.
We also worked with a broader range of Marketplace lenders to
get finance into the hands of more of our customers. In 2025, we
onboarded six new partners, bringing our total to 28 active partners.
By leveraging our distribution capabilities, the Marketplace
continues to account for around 10% of loan originations. This
ecosystem allows us to get finance into the hands of more of our
customers, generating increased revenue, efficiency, and
long-term relationships.
ambitious
How we delivered
in 2025
2
Expand our audience
We are actively broadening our reach to become the first choice
for all UK small businesses. Alongside expanded product sets,
we are going deeper in our distribution channels to reach
more SMEs.
Our brand presence has reached new heights through high profile
partnerships. Now in our fourth year with PREM Rugby, we
expanded our reach as the first official business finance partner
of TNT Sports. Our new ad, featuring real customers for the first
time, reached 4.2 million TNT viewers in the first two months
from the Premier League to the Ashes. Capitalising on the
Women’s Rugby World Cup, our video content reached 36 million
rugby fans online, with 10 million views/listens through major
rugby print and podcast media partnerships. By appearing where
our customers live and work, we are successfully attracting a
wider, more diverse base of entrepreneurs to the platform.
3
Scale our product offering
We have evolved from a single-product lender into a
comprehensive financial partner. Through the Funding Circle and
Marketplace offering, more than ten products are now available for
SMEs. We are focused on scaling our newer solutions, specifically
FlexiPay and Cashback card, to solve more SME needs and drive
significant business growth. The launch of our Company cards
capability now provides SMEs with team-wide financial control,
supporting our ambition to become ‘front of wallet’.
The scale of our innovation is evident in our product functionality.
In the year, we integrated self-service features, accounting
software integration, and waived all forex fees, making our
toolkit indispensable for daily operations. We also enabled
customers to draw down funds directly to bank accounts.
As a result, transactions on our newer products, FlexiPay
and Cashback card increased 66% this year, with cumulative
spending surpassing £1.6 billion.
4
Deliver a seamless
lifetime customer experience
Our transformation into a multi-product platform has
fundamentally changed how we interact with our customers.
We are now a meaningful part of their daily lives, serving them
across their life cycle with the ability to borrow, pay later,
and spend as a trusted financial partner.
Customers are now transacting with Funding Circle every
38 seconds, up from every 92 seconds in 2024 and once every
half hour in 2021. We combine digital-first speed with a personal
touch that resonates; our Net Promoter Score remains at an
industry-leading 79.
We’re also investing in building Gen AI applications across
the business to enhance customer experience and improve
efficiency. In our customer interactions, we’re using Gen AI
applications for sentiment analysis and to provide tailored
customer insights. We’re also using a Gen AI-powered coaching
tool to enable our Account Managers to better serve customers.
125,000
SMEs supported since 2010
>£1.6bn
FlexiPay and Cashback card transactions to date
36m
rugby fans attracted
38
customers transact with
us every 38 seconds
79
our industry-leading
Net Promoter Score
STRATEGIC REPORT
Funding Circle Holdings plc | Annual Report and Accounts 2025
15
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Revenue (£m)
£204.3m
Profit/(loss) before tax (£m)
(before exceptional items)
£20.3m
Basic earnings/(loss) per share (p)
(before exceptional items)
14.6p
Definition
The Group generates revenue principally
from: transaction fees earned from originating
loans with borrowers; servicing fees from
servicing of assets 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 from continuing
operations and before the impact of
exceptional items.
Links to strategy:
1
2
3
4
Links to strategy:
1
2
3
4
Links to strategy:
1
2
3
4
Financial
Operational
2024
130.1
2023
(2.4)
2023
2025
204.3
160.1
2023
(9.9)
3.4
2025
20.3
0.8
2025
14.6
Term Loans originations
£1,638m
FlexiPay transactions
£815m
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 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
4
2024
2024
2023
1,060
234
2023
1,407
2025
1,638 2025
815
492
2024
2024
How we measure ourperformance
Key performance indicators
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
16
Key to strategic objectives:
1
Get to ‘Yes’
2
Scale our product offering
3
Expand our audience
4
Deliver a seamless lifetime customer experience
Financial Alternative performance measures (“APMs”)
Links to strategy:
1
2
3
4
Unrestricted free cash flow (£m)
£30.8m
Definition
Unrestricted free cash flow represents the net unrestricted 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. It excludes restricted cash
movements and cash flows from discontinued operations.
The Directors view this as a key liquidity measure.
Term Loans under management
£2,755m
FlexiPay end of month balances
£206m
Assets under Management (“AuM”) (£m)
Definition
This represents the total value of outstanding principal of borrower loans, lines of credit and Cashback 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
4
119
2024
2024
3.6
2024
2,853
2023
30.8
2025
2025
2,755
2025
206
2,714
582023
(11.4)
2023
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
17
£7.9bn
contribution to GDP
117k
jobs supported
Our customers
We are proud to be the trusted
finance partner for SMEs across
the UK, supporting their day-to-day
operations to navigating complex
growth phases. Whether it’s a
long-term investment through a
Term Loan or everyday cash flow
management using FlexiPay or our
Cashback business credit card, our
products provide a financial toolkit
that ensures more businesses get
a ‘Yes’ whenever they need it.
Understanding what
our customers need to
grow their businesses
Establishing
itsbrand
Ethical Bedding | Cashback business credit card
James Higgins founded Ethical Bedding with a mission
to combine financial discipline with a planet-positive
ethos. The brand operates at the intersection of luxury
and sustainability, positioning ‘eco’ as a core design
principle. However, scaling a modern e-commerce
brand presents unique hurdles:
l High operational spend: Significant upfront costs
for inventory and international freight.
l Marketing demands: The need for consistent digital
marketing investment to drive growth.
l Funding pressure: Finding extra capital to reinvest into
new product development and wellness ecosystems.
How we help
Ethical Bedding utilised the Funding Circle Cashback
business credit card to provide a practical tool
for scaling.
l Cash flow smoothing: Aided working capital
planning and simplified daily operational spending.
l Automated reinvestment: Earned cashback
provides a vital extra margin for business growth.
l Disciplined spending: Supported the day-to-day
reality of running a mission-driven brand.
Lending through
Funding Circle in 2025
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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Looking to
scale up
Gem Bazaar | Term Loan
The handcrafted gemstone jewellery business
combines English design sensibility with the traditional
craftsmanship of Jaipur to create ‘timeless pieces with
soul.’ Having started on a small-batch model, growth has
allowed husband and wife team, Stephen and Emma
Plunkett, to develop a stronger brand that prioritises style
and artisanal quality. However, managing the life cycle
of handcrafted jewellery from initial design in the UK
to meticulous production in India, requires agile
financial management:
l Expensive upfront costs: Securing high quality
gemstones and funding production runs in advance
of sales in an environment of sky-rocketing silver
and gold prices.
l Seasonal retail peaks: Needing to be ready to
capitalise on immediate retail opportunities that
require quick liquidity at certain times of the year, and
especially around Black Friday and Cyber Monday.
l Marketing demand: The challenge of scaling
advertising efforts on social media platforms to reach
a wider audience while maintaining a healthy return
on spend.
How we help
Gem Bazaar used a Funding Circle Term Loan to invest
in significant growth opportunities.
l Stock purchase and footprint expansion: Provided
the capital to invest in stock and scale their retail
footprint, ensuring the brand could meet demand.
l Flexible capital: Acted as a ‘bridging’ solution,
allowing the business to seize upcoming sales
opportunities quickly.
l Strategic advertising: Enabled the team to invest
in enhanced digital marketing efforts, aimed at
increasing return on advertising spend.
Expanding
its reach
Choc on Choc | FlexiPay
Award-winning British chocolatier Choc on Choc
blends traditional craft with innovative designs. To
expand its reach from local boutiques to major retailers,
the father and daughter team, Kerr Dunlop and Flo
Broughton, faced the classic ‘growth gap’ common
in manufacturing:
l Lumpy cash flow: Managing large, upfront supplier
invoices well before receiving payment from retailers.
l Seasonal peaks: The challenge of funding high
volume production for major holiday periods.
l Supply chain costs: The need for flexible capital
to maintain inventory levels without depleting
cash reserves.
How we help
Choc on Choc uses FlexiPay to spread the cost of its
larger invoices, providing the financial agility to pivot
their focus towards high margin growth.
l Direct‑to‑consumer strategy acceleration: Allows
the business to spread the cost of invoices, enabling
them to unlock the capital needed to grow from
wholesale multiples to a direct-to-consumer model.
l Targeted digital growth: Enabling significant
increase in social media advertising spend, driving
brand awareness and high intent traffic to the website.
l Working capital management: Allows the
business to manage their day-to-day operations
and VAT payments.
l Operational breathing room: Smooths out the
financial impact of seasonal production spikes.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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19
From day-to-day
transactions to long-term
growth, our diverse product
range supports business
owners at every step of
their journey. Whether they
need to borrow, pay later,
or spend, we meet a broad
spectrum of financial needs
empowering businesses with
our trademark ease, speed,
and market-leading instant
decision technology.
What our
customers say
Our products
Our multi-product
offering meets SMEs’
financial needs
More on our
products online at
fundingcircle.com/
uk/businesses/
business‑finance/
We spoke to our bank and got
quotes from other lenders,
but our bank was very slow to
respond. With Funding Circle,
the experience was quick,
and easy. The initial decision
was made within about 48
hours, and after the loan
was signed off I received the
funds within three days.”
Bird & Blend
~£75k
average Term Loan size
4 years
average loan term
Borrow
Term Loans
Designed to support business growth and working capital. Our unsecured
Term Loans offer £10k–£750k with fixed rates from 6.9% per year, terms
from six months up to six years and typically require a personal guarantee.
Through our Marketplace, we also work with third party lenders to offer
loans to our customers that we are otherwise unable to support, whether
that is due to our product range or credit appetite.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
20
We love FlexiPay, as it
allows us to pay our
suppliers and split
payments over a few
months, helping us
to manage cash flow
and keep up to date
with invoices.”
Wick & Tallow
FlexiPay helped us
pay key suppliers.
The process was
easy and efficient,
we filled out some
questions and the
decision was made.
A great alternative
way to get finance to
help your business.”
Joe & Seph’s
2%
cashback for the
first six months
42 days
interest free with no
annual or forex fees
£250k
maximum credit line
0%
interest
from
1.99%
variable flat fee per transaction
Pay later
FlexiPay line of credit
Businesses can take full control of their cash flow using
FlexiPay, allowing them to pay upfront for business needs
ranging from bills to stock and suppliers. With flexible terms
and billing, SMEs can repay in 1, 3, 6, 9, or 12 months or
settle early, while keeping their business moving.
Spend
Cashback business credit card
Rewarding businesses everyday spending.
The Cashback card offers 2% cashback for the first six
months, up to £2,000, and an uncapped 1% thereafter.
With free unlimited Company cards and instant
accounting integration, this enables businesses
to empower their teams while cutting admin.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
21
platform
for sustainable, profitable growth
A proprietary
Delivering a superior customer experience
Technology and data
Our proprietary technology and data
platform is the engine of Funding Circle’s
competitive advantage. Built on 15 years of
lending data and modern cloud architecture,
it transforms the customer experience by
delivering a level of speed and reliability
that traditional lenders cannot match.
In 2025, we leveraged this foundation
to fully operationalise our multi-product
strategy. Our modular platform allowed
us to scale FlexiPay and our Cashback
business credit card seamlessly, delivering
the instant decisions and friction-free
experiences our customers rely on.
Looking ahead to 2026, we are unlocking
the next frontier of efficiency: becoming
an AI-native organisation. We are moving
beyond Gen AI experimentation to strategic
transformation, deploying this evolving
technology to fundamentally reshape our
workflows and deliver a market-leading
customer experience. By equipping our
teams with the right tools and training, we
plan to drive step-changes in engineering
velocity and operational productivity,
whilst managing implementation safely
and responsibly. Simultaneously, our risk
models continue to evolve, utilising our
unique data to rank order risk with
ever-greater accuracy. Underpinning
this innovation is our uncompromising
commitment to security; our ‘defence-in-
depth’ capabilities ensure that as we
move faster, we remain resilient against
an evolving threat landscape. We enter
this year with a platform that is smarter,
scalable, and secure, ready to power
our next phase of profitable growth.
Greig McEwan
Chief Technology Officer
Automated decision engine
At the heart of our platform, machine learning
models automate complex underwriting
tasks. This enables SMEs to apply in as little
as six minutes, with 73% of customers
receiving an instant decision, delivering
certainty when it matters most.
Flexible modular architecture
Our flexible modular architecture enables the
rapid launch of new products. This modular
design was key to the successful rollout
and iteration of our FlexiPay and Cashback
card products.
Gen AI‑powered service
We use Gen AI to work more efficiently, drive
operational leverage through automation, and
deepen our SME relationships by analysing
customer sentiment. Our cloud-native
infrastructure also supports product growth
and innovation simultaneously, allowing us to
create a more tailored customer experience.
Frictionless digital experience
Our highly flexible interface provides
an intuitive experience across desktop
and mobile. As we have expanded our
multi-product offering, we have seen a 7x
increase in mobile usage, allowing SMEs to
manage their finances effortlessly on the go.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
22
Multi‑layered
defence
We secure data at
every level. From
secure device
protection to
comprehensive cloud
security controls, we
create multiple robust
barriers that protect
our infrastructure
from outside threats.
World‑class
partnerships
We don’t work in
isolation. We partner
with top global security
companies to deploy
leading tools for
identity management
and cloud security.
This ensures our
technology is always
protected by
industry experts.
Intelligent
monitoring
Our automated
systems scan the
threat landscape 24/7.
Using advanced
threat intelligence,
we identify and
neutralise potential
vulnerabilities in real
time before they can
impact our platform.
Rigorous
stress testing
We don’t wait for
attacks, we simulate
them. Through regular
penetration testing
and simulation, we
constantly stress test
our defences to
ensure they are battle-
hardened against
real-world scenarios.
Leverage historical insights
to support Account Managers
anticipate and address potential
questions from customers
during call preparation.
Surface past loan data to
identify and offer the most
relevant financial solutions
aligned with a customer’s
business goals.
Map connections between
related businesses, to provide
a holistic view of historical
performance, enabling more
informed decision‑making.
24-hour security operations centre (“SOC”)
Technology is backed by human expertise. Our dedicated SOC provides round-the-clock surveillance and rapid
incident response, ensuring the integrity of our financial ecosystem is always maintained.
Protecting Funding Circle and customer
data in an evolving threat landscape
As the global threat landscape evolves, so do our defences. We employ a rigorous ‘defence-in-depth’ strategy that
goes beyond simple protection, actively hunting threats to safeguard our platform. By combining best-in-class
technology with expert oversight, we ensure that our speed and scale never come at the cost of security.
Customer Insights tool
Having the right data at our fingertips allows us to
provide a seamless customer experience. In
2025, we launched the Customer Insights tool, a
proprietary, Gen AI-powered tool that synthesises
data from across our entire ecosystem into a
single, digital view of every SME. By surfacing
rich, contextual insights instantly, the tool
empowers our customer-facing teams to gain a
deeper understanding of our customers whilst
enabling them to provide a more personalised,
consistent, and informed experience.
By centralising these insights, we achieve greater
operational leverage while delivering an improved
customer service.
Since launch, the tool has been used to:
See page 67 for more details on how we manage
technology change as an emerging risk
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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23
Technology and data continued
The future of data and AI
Unlocking value through data, AI, and credit risk expertise.
The data advantage:
3x better risk discrimination
Our credit risk expertise remains our
defining competitive edge. Our proprietary
models deliver 3x greater predictive power
in distinguishing between high and low
risk borrowers compared to traditional
credit bureau benchmarks. This superior
risk discrimination allows us to price risk
more accurately and serve customers
that traditional banks often overlook.
Our ninth-generation models (“Gen 9”)
represent a significant leap forward,
delivering a 10% relative uplift in predictive
power compared to the previous generations.
Crucially, the effectiveness of our approach
has been tested; our models have been
validated by performance data throughout
the economic stresses of the Covid-19
period, proving their resilience in
volatile environments.
AI as a multiplier:
2026 and beyond
In 2025, we established the technical and
governance frameworks for the use of Gen
AI. Now, we are expanding its application
to transform the business. We are building
an AI-native culture where Gen AI
supports our engineering, commercial and
operational teams. By using third party
software, we are ensuring our teams have
the right technology for every task. From
generating code to summarising complex
data for underwriters, these tools are
increasing our velocity and freeing our
people to focus on high value innovation.
As we move into 2026, we will continue to
explore further opportunities to streamline
the customer experience, from credit
origination to servicing, ensuring Funding
Circle remains at the cutting edge of SME
finance.
10bn
SME data points
3x
better risk discrimination
79
NPS (Term Loans)
In the Collections and Recoveries team,
our priority is to support customers
through challenging times with empathy.
Historically, our call quality process –
to review the team’s performance and
identify opportunities for improvement
– has been manual. By reviewing only
a small subset of interactions, we faced
limitations in providing the real-time,
comprehensive feedback essential
for delivering a superior
customer experience.
To solve this, we developed and
launched ‘Hannah Call Coach’, a Gen
AI-driven solution that automatically
analyses calls for procedural adherence
and effective problem-solving. This
data feeds directly into a bespoke call
dashboard, shifting the focus from
retrospective auditing to proactive
self-coaching.
The tool has significantly streamlined
our workflows, improved team
productivity, and enhanced our
customer service. We have replaced the
manual call quality monitoring process,
increasing our review capacity with a
118% uplift in calls analysed. By
providing structured, instantaneous
feedback, we’ve empowered our team
to take ownership of their professional
development while ensuring the highest
standards for our customers.
The success of ‘Hannah Call Coach’
has served as a catalyst for innovation
across Funding Circle. This initiative
has helped to spark further data-driven
thinking, influencing how we approach
call quality in other areas of the business
such as Sales and Operations. It is now
becoming the blueprint for a suite of
tailored AI tools designed to elevate
performance and consistency across
all our customer-facing functions.
Integration of Gen AI into
our call quality monitoring
has significantly streamlined
our workflows, improved
productivity, and enhanced
our customer service.”
Alex Przytocki
Head of Collections & Debt Recovery
Gen AI has
redefined our
call quality
monitoring
approach
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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24
Funding growth
How we helped Bird & Blend
From humble bedroom beginnings to a nationwide sensation,
Bird & Blend Tea Co. has reimagined the British brew with
heart and creativity. Founded by Krisi and Mike in 2010, its
growth is rooted in community and flavour. Funding Circle is
proud to have supported Bird & Blend’s growth journey with
multiple Term Loans since 2018, totalling over £550,000. From
expansion to Covid protection, and back to growth, this vital
access to funds has enabled the business to adapt and grow,
turning Krisi and Mike’s ambitious vision into a thriving reality
for tea lovers everywhere.
Funding Circle was a great help
to us during the pandemic and
beyond, backing us not only with
finance but by stocking ourteas
at Funding Circle HQ, so it feels
like a real partnership.”
Mike Turner
Co-Founder,
Bird & Blend Tea Co.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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25
Our people
Overview, People Pact and
engagement
As we celebrated our 15th anniversary, we
have transitioned from a fintech pioneer
into the UK’s leading SME multi-product
finance platform. This milestone provided
a pivotal opportunity to evolve our
Employee Value Proposition (“EVP”) into
our refreshed People Pact: ‘On A Mission’.
This foundation honours our history of
fintech bravery while empowering Circlers
to #LiveTheAdventure in our next chapter.
Central to this vision is our transformation
into an AI-native company. We are investing
in the growth of every Circler to ensure
they can capitalise on the potential of AI,
creating a more productive, rewarding
work environment and a superior
experience for our customers.
From the very early days of our journey
we strongly believed in the power of our
team and what we can achieve when we
#StandTogether. To enable that, we have
invested in our in-office experience, to
support collaboration, to make it appealing
for Circlers as a place to work and learn
and to be reflective of Funding Circle’s
uniqueness, in a way that works for all
of us through our hybrid working pattern,
while being proportionate and sustainable.
Mission‑led engagement
Following a year of strategic refinement
in 2024, 2025 has been defined by the
resilience and renewed energy of our
Circlers. We have transitioned from a phase
of change into a high performance culture
that is now fully ‘on a mission’ to drive our
next chapter as an AI-native leader.
In 2025, we achieved our highest-ever
levels of employee engagement, reflecting
our steadfast commitment to fostering a
high performance culture where every
Circler can thrive. Our annual engagement
survey recorded an overall positive
sentiment score of 74%, a 10‑point
increase on the previous year.
At the heart of this progress is a deep-seated
connection to our mission. Our success is
tied to the shared conviction that supporting
small businesses is vital to a thriving
economy. This year’s results show our
collective commitment to our
#ObsessOverTheCustomer value
which remains exceptionally high at
80%, signalling that Circlers are not just
engaged with their work, but are
invested in the impact we have on the
businesses we serve.
Circlers
Our
make our business thrive
Our people (“Circlers”) are at the heart of our mission to back small
businesses. In 2025, thanks to the contributions of everyone working at
Funding Circle, we demonstrated the successful execution of our strategy
and we continue to build a better, stronger business together.
The People Pact: ‘On A Mission’
To ensure our future direction is rooted in the lived experience of our people, we conducted deep-dive research to reconnect
with our challenger mindset when refreshing our employee value proposition. True to our value #BeOpen, we listened to our
people through large-scale workshops and engagement data, and strategic conversations with our Board and leadership teams.
We heard that Circlers join us for our innovative mission and stay for our inclusive culture and the unique ‘best of both
worlds’ environment; combining start-up energy with public company stability. ‘On a mission’ celebrates this unique
blend and centres on five key pillars:
To back small
business
To grow
fast
To belong
together
To build
better
To be different
We’re on a mission to back
small business owners in
the UK – in a way that no
other company can.
You bring your expertise
and talent, and we promise
to connect it with real
change for real people.
We believe the fastest way
to grow is to do – so we
give you the ownership
and responsibility to go
further, faster.
The more you put in,
the more you get out –
whether you’re starting out
or taking your next step.
We’re a driven team that
chooses to lift each other
up – we challenge, we
champion, and we have
each other’s backs.
Because the best work is
done when you feel you
truly belong.
Nothing stays still here,
we’re constantly
improving, changing and
spotting new opportunities.
We’re builders. Our people
can switch direction
quickly, see things
differently, take ownership
and run with it.
We’re built differently –
the restless energy of a
fintech start-up, with the
stability and backing of
a public company.
The result? The pace to
innovate and the scale
to make it count.
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AI fluency
Our vision is to become an AI-native
company to drive growth, create a
superior experience for our customers,
and to make our work more productive
and rewarding for every Circler. For
Funding Circle, being AI-native is not
an ambition to automate every process;
rather, it represents a strategic maturity
where we #ThinkSmart to know when
and how to leverage Gen AI to solve
complex problems and deliver tangible
benefits for our customers.
By equipping our workforce with the
skills to navigate an AI-augmented
landscape, we are directly improving
how we support small businesses:
l Faster decisions for SMEs:
AI-enhanced productivity allows us to
process information more efficiently,
leading to quicker funding decisions
for the businesses that rely on us.
l Personalised support: AI fluency
enables Circlers to use data-driven
insights to provide more tailored
financial solutions that meet the
unique needs of each business.
l Enhanced innovation: By
automating routine tasks, we free up
our Circlers to focus on our mission
and developing the next generation
of finance solutions that SMEs need
to thrive.
Through our AI learning and development
programme, we are ensuring that
every Circler is not just ‘AI-ready’ but is
empowered to use these tools to better
#ObsessOverTheCustomer every day.
Adam is a Senior Strategy Manager
and has been at Funding Circle for
four years.
I lead our ‘Let’s Talk About Heritage’
(“LTAH”) Circler Group, which celebrates
the range of backgrounds within our
Company. We understand that strength
comes through our diversity (situated as
we are in one of the most diverse cities
in the world), but also that people from
different backgrounds face different
challenges through their lives and in
the workplace. Our goal is to create
an environment where we can talk
about those differences honestly and
transparently, educating ourselves as to
others’ cultures and lived experiences,
and making the workplace a more
inclusive space for everyone. In 2025 we
ran a variety of events including ‘Sip &
Paint’ discussion evenings, showcased
inspirational and impactful Black people
through Black History Month, and tried
our hands at origami. We have big
plans for 2026, including the launch of
a new mentoring programme, linking
up with wider groups in the city, and
empowering people from across the
business to run more of their own
events. Watch this space!
Joining the team here was a
transformative experience.
Everyone is deeply motivated
by our mission and eager to
help one another succeed.”
Adam Ismail
Circler Group Lead
Leading from
the front
Our values
#ObsessOverTheCustomer
#LiveTheAdventure
#ThinkSmart
#BeOpen
#StandTogether
#MakeItHappen
Learning and development
Circle In and Growth Week
The Circle In is our flagship onsite
event where we come together to align
on strategy, build connections, and fuel
our shared mission. In 2025, the event
was a celebration of our heritage and a
bold look towards our future as an
AI-native business.
We used this event to launch our refreshed
People Pact, ensuring every Circler
understands how their growth drives
our mission to back small businesses.
The day featured deep dives into our
evolving product suite, showcases from
our Circler-led groups, and an exploration
of how Gen AI will empower us to work
smarter, deliver more for our customers
and #MakeItHappen.
The momentum continued into Growth
Week, a dedicated series of development
activities launched in October. From internal
expert ‘spotlights’ to external specialists, the
week covered everything from technical AI
fluency to physical and mental wellbeing, all
designed to help Circlers fuel their mission.
Growth Week impact:
l Scale: Over 500 Circlers engaged
in the sessions, and proactively
invested in their development.
l Sentiment: The week achieved
really positive feedback, reflecting
our Circlers’ engagement in continuous
learning and high performance culture.
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Our people continued
Q&A
on 2025’s Female Empowerment
Programme with Clare Harris
Clare is the Head of Existing Customer Management
for FlexiPay and has been a cornerstone of Funding
Circle for nearly 14 years. Her career trajectory has
mirrored the Company’s evolution; from working on the
retail investment product to playing a fundamental role
in the launch and scaling of FlexiPay, Clare has been,
and continues to be, instrumental in supporting Funding
Circle’s success.
Q
What motivated you to participate in the Female
Empowerment Programme, and what were you
most hoping to achieve?
A
I was primarily motivated by the opportunity to further
build my professional network within Funding Circle
and to learn from other women at a similar level in the
business. I felt it was important to take dedicated time
away from my daily role to focus on my development
and explore how I could further advance my career.
Q
Which part of the curriculum had the most
significant impact on your professional growth,
and why?
A
While the entire programme was well structured with
excellent trainers, the sessions on assertiveness and
impostor syndrome were particularly impactful for
me. They were incredibly engaging and provided a
space for deep self-reflection, helping me understand
my own traits and behaviours. I came away with
practical, ‘bite-sized’ tips that I can immediately use
to overcome personal challenges in the workplace.
Q
How has your approach to your role at Funding
Circle changed since completing the programme?
A
I feel significantly more confident and empowered to
take the next steps in my career. Moving forward, I will
be more intentional about my actions and communication
style to increase my impact and influence. I am
consciously taking more time to reflect on my
achievements, continuing to build my network and
map my future career goals. The programme really
helped me recognise the value of my voice in high
visibility settings.
Awards
l Announced in 2025: Tia
Crabtree, Tiana Portugal and
Lucy Vernall featured on the
Innovate Finance Women in
FinTech Powerlist 2024.
l Kate Turgoose featured on the
Innovate Finance Pride in
FinTech Powerlist 2025.
l Ben Rose named on The Leasing
Foundation’s 30 under 30.
l Rachael Raymond won Industry
Leader of the Year at the NACFB
Commercial Lender Awards.
Diversity, equity
and inclusion
Circler‑led groups
Our Circler-led groups are at the forefront of
our culture, driving the initiatives that make
Funding Circle unique. 2025 highlights
included Circle of Pride, spotlighting
queer-owned small businesses, and
Neurodiversity@FC, hosting immersive
VR experiences to build awareness of
sensory sensitivity. From Women@FC’s
organic storytelling in its monthly newsletter
to FC Impact’s nationwide water quality
project and Parents@FC’s family events,
these groups ensure that every Circler feels
seen, supported and empowered to make
an impact.
All our Circler-led groups came together
for our Open Circle event during Growth
Week. An Open Circle is a safe space
where our Circler groups collaborate for a
unique panel discussion to bring answers
to difficult questions. Open Circles are a
key part of maintaining our open and
supportive culture.
Female Empowerment Programme
We are proud to announce that, as of
December 2025, we achieved our HM
Treasury’s Women in Finance Charter
pledge, which is a commitment to support
the progression of women into senior
roles in the financial services sector. This
achievement reflects our focus over several
years to build and iterate our processes
to hire and promote top talent, based on
performance and potential, while mitigating
bias and ensuring we attract diverse
applicants. This is also supported by our
Female Empowerment Programme, now
in its third year. Designed for nominated
emerging and experienced leaders
identifying as women (cisgender or
transgender) or non-binary, in recognition
of their performance and potential. The
curriculum focused on strengthening our
talent pipeline by building business acumen,
strategic communication and the confidence
to lead with impact and amplify visibility
across Funding Circle.
This programme was underpinned with
three impact imperatives: improving
retention, accelerating career growth
and strengthening our internal succession
planning. By focusing on leadership
development, strategic networking, and
executive presence, we have supported
a pipeline of future leaders ensuring that
Funding Circle’s leadership team of the
future remains representative of our
Circler population.
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Gender metrics
(as at 31 December 2025)
ExCo and
direct reports
43%
57%
All
Circlers
42%
58%
Executive
Committee
29%
71%
Group
Board
38%
62%
Female Male
Mean pay gap Median pay gap Women in leadership
1
22%
17%
22%
19%
21%
2025
2024
2023
2022
2021
30%
26%
31%
27%
32%
2025
2024
2023
2022
2021
39%
34%
32%
34%
31%
2025
2024
2023
2022
2021
Diversity, Equity and Inclusion (“DEI”) Statement
‘On A Mission, together’
At Funding Circle, we’re on a mission to back small
businesses like no other company has ever done before.
To succeed, we need a team that reflects the diverse world
of the customers we support. We know that our success
comes from a culture where every Circler, regardless of
background, identity, or experience, feels the confidence
to bring their whole self to work.
In our fast-moving environment, we don’t just ‘accept’
diversity; we seek it out to help us spot opportunities
and find a better way. Whether you are a prospective,
new or existing Circler, we are committed to providing
an environment where you can thrive. Just as we back
our customers, we back our people by ensuring fairness
is woven into everything we do, from recruitment and
compensation to career development. This includes
ensuring all applications, including those from disabled
persons, are treated equally and fairly at every stage of
the journey.
We provide the space for you to take ownership and run
with it, ensuring that everyone has the platform to contribute
their ideas and the support to be successful. Being a Circler
means backing each other as much as we back small
businesses. We measure our success not just by individual
achievements, but also by the impact we have on others.
We cherish our diversity, across culture, gender, race,
disability, sexual orientation, and thought, and we stand
together to make it happen, every single day.
1. Defined as those employees in a “senior manager” role and above.
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Diversity, equity
and inclusion
Social impact Climate and environment Governance and
risk management
Our ambition and
commitment
To be best in class and live by
our DEI Statement, building an
inclusive and diverse culture.
Achievements in 2025
l 80% positive sentiment
score in the Inclusion
and Belonging category
of our engagement survey
(+3% year on year).
l Achievement of our HM
Treasury’s Women in
Finance Charter pledge for
women in senior leadership,
as detailed on page 28.
l Third year of the Female
Empowerment Programme,
focused on accelerating
career growth, and 14
Circlers trained as Mental
Health First Aiders,
providing additional
mental health support
alongside our Employee
Assistance Programme.
Goals and roadmap
for 2026
l Maintain our Belonging
score by scaling our
Circler-led impact, through
efforts including mentorship,
advocacy and visibility.
l Continue to make progress
against key DEI metrics and
targets, including women
in leadership and the
gender pay gap.
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.
Achievements in 2025
l 117,000 jobs, £7.9 billion in
GDP, and businesses in all
650 constituencies
supported through our
lending, as detailed on
pages 3 and 8.
l Silver Fair Payment Code
accreditation, highlighting
our commitment to ethical
SME payment practices.
l Free or discounted access to
Thrive Mental Wellbeing’s
NHS-trusted mental health
app to all UK SMEs.
l Fourth year backing
underserved entrepreneurs
through Hatch Enterprise
partnership, with 19
founders supported.
l 99 “Impact Days”
contributed by Circlers
volunteering with charities
including NishkamSWAT
and Earthwatch Europe.
Goals and roadmap
for 2026
l Engagement with internal
and external stakeholders
to identify opportunities
for social and sustainability
benefits for our customers.
l Continued focus on our
multi-year partnerships to
support UK SMEs and their
local communities.
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.
Achievements in 2025
l Development and
approval of internal climate
Transition Principles.
l Achievement of our interim
operational climate target.
l Exploration of financed
emissions data
improvements.
l £100k investment
commitment in Greenlee
Peatland Restoration
Northumberland National
Park project, over
2026–2027.
Goals and roadmap
for 2026
l Development of internal
flood risk and scenario
analysis capabilities.
l Continued focus on
financed emissions
data improvements.
l Engagement with materially
emitting suppliers without
net zero targets.
l Engagement with new
office building manager on
sustainability and heating
decarbonisation plans.
Our ambition and
commitment
To meet shareholder
and investor expectations,
and be viewed positively
in the market.
Achievements in 2025
l Board and Executive
engagement in climate
issues and trends.
l Initial gap analysis against
draft UK Sustainability
Reporting Standards.
l Continued upholding of
highest standards of risk
management and
l corporate governance more
broadly, as covered in the
sections starting on pages
57 and 72.
Goals and roadmap
for 2026
l Further integration of climate
risk management processes.
l Monitoring and preparation
for UK Sustainability
Reporting Standards.
commitments
Environmental, social and
governance(“ESG”)
Delivering on our
Our ESG Framework sets out our goals and roadmap for each strategic pillar
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.
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Our approach to ESG considers relevant risks and
opportunities, and is informed by our engagement with our
strategic stakeholders. Sustainability-related objectives are
included as part of non-financial objectives in determining
the CEO and CFO annual bonus, as outlined on page 104.
They cover committed and sustained focus on our roadmap
and goals for each of our ESG pillar.
For more detail on corporate governance and risk
management, and our climate-related disclosures,
please refer to the sections referenced on the right.
Relevant policies can be
foundontheCompany’s
Sustainability webpage
More detail on corporate governance is set out on
page 72.
More detail on risk management is set out on page 57.
Our Non-Financial and Sustainability Information
Statement is set out on page 44.
Our climate disclosures consistent with the Task Force
onClimate-relatedFinancialDisclosures(“TCFD”)are
set out on pages 32 to 42.
Social impact
We believe that supporting small
businesses is vital to a thriving
economy. Beyond our mission to back
them with business finance, we also
aim to deliver and support initiatives
that bring real benefits to SMEs and
their local communities.
Our customers and SMEs
We value the contribution of SMEs to the
economy through the jobs they create
and the potential multiplier effect they
can have on society. For 15 years, our
lending has helped businesses operate
and grow, and has sustained 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 across the UK.
Given the materiality of this impact vs.
our other social and environmental
impacts, we work with Oxford Economics
each year to carry out an economic
impact analysis focused on our activities
and the outcomes they drive. In 2025,
Funding Circle’s lending supported
117,000 jobs, £7.9 billion in GDP, and
helped businesses in every one of the
650 parliamentary constituencies.
Please see page 8 for more detail.
In January 2026, Funding Circle was
awarded the Silver Fair Payment Code
accreditation, highlighting its ongoing
commitment to ethical payment
practices and its role in fostering a
healthy ecosystem for SMEs, in particular
in an economic climate where cash flow
remains a primary concern for business
owners. The recognition demonstrates
that we consistently meet high standards
for prompt payment, upholding the
Code’s principles of being Clear, Fair
and Collaborative with suppliers.
We continued to offer UK SMEs free
or discounted access to Thrive Mental
Wellbeing’s NHS-trusted app, providing
SME owners and employees mental
health support anytime, anywhere.
Our most vulnerable customers also
have access to unlimited in-app therapy,
providing them with an alternative to
NHS pathways.
Above: Hatch Enterprise founders at the closing
event of the Get Ready to Start Programme,
hosted at Funding Circle, May 2025.
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Climate and environment
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
and includes
greenhouse gas (“GHG”) emissions
reporting per Companies Act 2006
regulations. Our disclosures remain
aligned to the TCFD recommendations,
considering proportionality and materiality
and recognising that certain areas will
continue to be deepened and enhanced
over many years. In anticipation of the
incoming UK Sustainability Reporting
Standards, we have undertaken a gap
analysis against the IFRS Sustainability
Disclosure Standards for Climate-related
Disclosures (“IFRS S2”). We also note the
expectations under Bank of England PRA
Supervisory Statement 5/25, which,
although not directly applicable to
Funding Circle as it is not regulated
by the Prudential Regulation Authority,
is anticipated to raise general standards
in our market.
1. The Company has also considered the 2021 TCFD Annex and the Supplemental Guidance for the Financial Sector.
Environmental, social and
governance(“ESG”) continued
Social impact continued
Wider societal contributions
and commitments
We are a signatory to the Investing in
Women Code and the HM Treasury’s
Women in Finance Charter, as outlined in
more detail in Our people on page 28.
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 44.
2025 marked our fourth year of partnership
with Hatch Enterprise, contributing to its
mission to build a fairer, more equitable
and more diverse business landscape.
In 2025 we supported 19 founders on the
inaugural Get Ready to Start Programme.
Through its programmes, Hatch supports
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.
We are proud of the diversity of our
Circlers and their social impact beyond
work, and seek to support their
engagement when it aligns with our
mission. In 2025 we co-sponsored a
‘shark tank’ style pitch event designed
to support underrepresented groups
(particularly the Somali community) in
accessing business support and funding.
The event attracted over 200 participants
and awarded a female-led start-up.
Under our Climate and environment
pillar, we focus on Beyond Value Chain
Mitigation (“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 35. In 2025 we continued to
support non-profit Earthwatch Europe’s
citizen science programmes through its
Great UK WaterBlitz, which helps build a
picture of freshwater quality across the
UK. We also aim to provide engagement
and learning opportunities for our
employees. In 2025 we held a Climate
Fresk workshop facilitated by Business
Declares, joining a global movement of
over two million people seeking to learn
about climate change and
climate solutions.
Above: Bicester participants of the Great UK
WaterBlitz 2025, courtesy of Earthwatch Europe.
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1. Strategy
1.1 Climate-related risks and opportunities
Funding Circle is a UK-based SME finance
platform that provides digital lending
services, supported by key technology
partners and employees who work flexibly
from our central London headquarters.
Our technology, data and product
capabilities enable SMEs to access fast,
hassle-free funding, while offering
institutional investors exposure to SME
debt opportunities. We manage the
lending originated through our platform
(Assets under Management, or “AuM”),
93% of which are Term Loans balances
funded by institutional investors
2
. The
remaining 7% are funded from Funding
Circle’s own balance sheet (“on-balance-
sheet lending”) and a senior bank facility.
We have assessed climate-related risks
and opportunities across our operations
and value chain over the short term (one
year or less), medium term (one to five
years) and long term (more than five
years). Our Enterprise Risk Management
Framework (“ERMF”) horizon is five years
– aligned to “medium term” in this context.
We recognise that climate-related issues
often manifest over longer time horizons.
However, with a weighted average
effective life of a Funding Circle Term
Loan of 2.1 years
3
and maximum term of
six years, these time horizons remain
most appropriate for our present
business model.
Factors considered in this assessment
include greenhouse gas emissions
including financed emissions, qualitative
and quantitative analysis of AuM, risk
analysis in line with our ERMF, and
feedback from stakeholders. These
factors have been reviewed by internal
subject matter experts and our external
sustainability advisers to assess potential
materiality, with recommendations made
for approval by relevant Committees (see
Governance on page 71).
There was no impact on our financial
position, performance or cash flow from
climate-related risks and opportunities in
the reporting period and our conclusion
remains that climate change does not
present financially material risks or
opportunities to our business over our
five-year ERMF horizon.
Table 1: Key climate-related risks and opportunities considered in assessing materiality
Category Driver Potential business impact Horizon Potential financial impact
Transition
risk
Market: changes
to SME and/or
institutional
investor demand
and preferences.
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:
l Compliance with more onerous
climate data, reporting or other
climate regulation or taxes could
increase costs for Funding Circle,
SME borrowers and investors.
l Transition investment by suppliers
may increase procurement costs.
Medium–
long
Reduced revenue from:
l lower demand for existing
products and services;
l deteriorating borrower credit
quality in higher-carbon sectors;
or
l write-offs, impairments and early
retirement of existing assets.
Increased costs from:
l compliance or carbon taxes;
l investment in data and
product innovation;
l reducing or compensating
for AI use; or
l suppliers passing on
transition-related costs.
Reduced access to capital/ liquidity
from:
l changes to investor risk appetite
or liquidity.
Policy and legal:
more demanding
climate policy
including
carbon taxes.
Medium–
long
Technology:
need for SMEs
and suppliers
to transition
to greener
technologies.
Medium–
long
Reputation:
climate-related
compliance or
delivery failures
negatively impact
public/stakeholder
perception.
Short–
medium
Materiality judgement: Likely to be below the threshold for financial materiality in the medium term.
Lending is well diversified across sectors, as shown in Table 7, and we support a diversified pool of institutional
investors. Around a third of lending is to a broad spectrum of “carbon-related” sectors (as defined by TCFD
4
).
As our lending is mostly unsecured, we are not exposed to the risk of transition-related devaluation of physical
assets used as loan security. We do not anticipate financially material transition risks to occur in the medium term.
2. We use our balance sheet minimally in the Term Loans business with limited co-investment in government guarantee schemes and R&D on new products to help
test and iterate the loans.
3. Term Loans, which have a weighted average life of 2.1 years, make up 93% of balances under management, with the remaining balances being up to 12 months
short-term, open-ended products (Funding Circle Cashback business credit card and FlexiPay drawn lines of credit).
4. Carbon-related sectors are defined in “Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures” (TCFD, 2021).
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33
Category Driver Potential business impact Horizon Potential financial impact
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 risk
appetite or liquidity due to impacts
of weather events on borrower
or investor operations.
All
horizons
Reduced revenue from:
l deteriorating borrower
credit quality;
l customer boycotting;
l lower demand for products
or services; or
l write-offs and early retirement
of existing assets.
Increased costs from:
l fines or litigation.
Reduced access to capital/liquidity
from:
l changes to investor risk appetite
or liquidity.
Chronic: e.g. 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.
Long
Materiality judgement: Likely to be below the threshold for financial materiality in the medium term.
Funding Circle has a minor, UK-only operational physical presence, which is not in an area of heightened flood
or subsidence risk. Assets under management are broadly distributed across the UK as shown in Table 8 and
are mostly unsecured, meaning no risk of assets relied on for loan collateral. Funding Circle’s forbearance
procedures were enhanced in 2025 to formally include our response for climate-related extreme events
impacting borrowers.
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 finance.
Platform and marketing
enhancements to increase efficiency,
reduce waste and utilise 100%
renewable electricity.
Short–
medium
Increased revenue from:
l access to new and emerging
markets; or
l new products and services
relating to climate transition,
resilience or adaptation.
Increased access to capital/liquidity
(for the same reasons).
Decreased costs from:
l reduced reliance on (volatile)
fossil fuels;
l increased energy efficiency; or
l lower resource use and waste.
Technology:
innovation in
circularity, energy
efficiency and
renewables.
Medium–
long
Materiality judgement: Likely to be below the threshold for financial materiality in the medium term.
An internal commercial review in 2023–2024 found muted customer demand and significant gaps between
loan pricing and institutional investors’ expectations for loan returns.
5. Bank of England Bankstats December 2025 data, Table A8.1.1 Stock of loans (total).
Environmental, social and
governance(“ESG”) continued
Climate and environment continued
1. Strategy continued
1.1 Climate-related risks and opportunities continued
Table 1: Key climate-related risks and opportunities considered in assessing materiality continued
Further detail on potential climate-related
risks in lending
Carbon-related sectors, as defined by
TCFD, typically have higher greenhouse
gas emissions today and therefore face
greater change – and associated climate
transition risks – to achieve low carbon
operations necessary for a net zero
economy. Around a third of Funding
Circle loans are made to businesses
operating in carbon-related sectors
(as detailed in Table 7 in Metrics and
targets) vs. a concentration of c.77%
of all UK SME lending according to
Bank of England statistics
5
.
These broad sectoral classifications are
useful only to provide a high level view
of potential materiality. They do not, for
example, differentiate between an electric
vehicle vs. an internal combustion engine
automotive firm.
Geographical concentrations may
heighten the physical climate-related
risks in Funding Circle’s lending if, for
example, a high number of businesses
in a certain area suffered acute weather
events that disrupted trading. As shown
in Table 8 in Metrics and targets, Funding
Circle’s loans are broadly distributed
across the UK. Within these high level
regional splits, we have not identified any
areas of geographical concentration risk.
We have started investigating the build of
internal capabilities to assess postcode-
level flood risk.
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1.2 Strategy and net zero
transition planning
Lending activities
We have an ambition to reach net zero
by 2050 across all emission scopes,
in line with the UK’s 2050 net zero
commitment. In 2025, our Board ESG
Committee approved a set of internal
Transition Principles, the first step
towards developing a transition plan
to support this ambition.
Our lending activity is by far our most
significant source of emissions.
Estimated financed emissions from the
balances we hold on our balance sheet
are broadly equivalent to 54 times our
operational and supplier emissions, and
financed emissions from AuM are 405
times. In 2025, we started to formalise
our thinking on financed emission
transition levers, recognising challenges
around a lack of primary data and our low
levels of influence over customer
decarbonisation, particularly given the
unsecured and relatively short-term
nature of the financing we facilitate
through our platform.
Actions undertaken or underway in
2025–2026 include plans and pilots to
improve data quality, participation in
industry-led working groups
6
and
proactive engagement with institutional
investors to understand any potential
future changes to their climate-related
lending requirements or appetite. Given
the above challenges and the volatility
of the UK and global climate policy
backdrop, we expect that our transition
planning – particularly in relation to
financed emissions – will continue to
evolve incrementally in the short term,
and we are not currently prioritising
the development of quantitative
decarbonisation targets for our lending.
In 2025, we made a minor update to our
forbearance procedures to specifically
recognise extreme climate-related
events. This supports our team in offering
flexible and tailored support to SME
borrowers impacted by such events.
We are satisfied that – over the medium
term at a minimum – 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. We remain committed to
providing finance to SMEs across a
diverse geographic and sectoral
distribution and do not anticipate any
significant strategy, business model,
resource allocation, or credit decisioning
changes as a result of climate-related
risks and opportunities.
Operations and supply chain
In 2024, following the sale of our US
business, we accelerated our interim
climate targets for certain of our
operational emissions scopes. Namely,
the minimisation of emissions across
Scope 1, 2 and 3.6 (business travel) and
mitigation of remaining hard-to-abate
emissions through investment beyond
our value chain
7
. We have now taken all
practical actions within our control to
minimise these emissions and have
purchased and retired high quality
carbon credits in excess of our residual
Scope 1, 2 and 3.6 emissions in 2025.
Excluding financed emissions, the
majority (>90%) of our emissions relate
to our supply chain (Scope 3.1, 3.2 and
3.4). In 2025, we conducted preparatory
analysis of our supplier emissions and
set a target for 2026 to assess suppliers
representing at least 67% of supplier
emissions and engage with any who
individually contribute >2% of emissions
and do not currently disclose science-
aligned net zero targets. We estimate
c.58% of supplier emissions are currently
covered by science-aligned targets.
Further detail on interim targets can be
found in Metrics and targets on page 38.
Beyond our value chain
In addition to the carbon credits purchased
to mitigate our residual Scope 1, 2 and 3.6
emissions, we increased our investment
in society’s broader transition to a low
carbon, nature-positive economy through
a two-year, £100k total investment
commitment in the Greenlee Peatland
Restoration Northumberland National
Park project. The site is one of the most
important wetland sites in Europe and
is designated as a Special Area of
Conservation, a Site of Special Scientific
Interest and a National Nature Reserve.
The 196 ha land has been managed as
a traditional upland beef and sheep farm
through agricultural tenancies, and the
park’s vision is to create a leading exemplar
of innovative and diverse nature recovery
and land management in the area linking
in with the wider Hadrian’s Wall Wetlands
Landscape Recovery project. The project
will undertake significant areas of peat
restoration works to the extensively
drained moorland, with the aim of creating
fully functioning peat bogs that can
ultimately sequester carbon, improve
water holding capacity and improve
water quality and biodiversity. The Park
Authority is currently leading the
development phase, working with
project members to establish a bespoke
management agreement for the whole
area with an implementation timeline
of over 20 years. Our contribution in
2026–2027 should result in 11 ha of
restored peatland.
1.3 Resilience of our strategy
In 2023–2024, we undertook, with
support of external experts, our first
qualitative analysis of the transition and
physical climate risks inherent in our
lending (total AuM, including defaulted
loans, as well as balances held on
Funding Circle’s balance sheet).
Transition risk vulnerability across the
sectors we lend to was assessed 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’s (“CFRF”) climate scenario
analysis narrative tool and the World
Bank Group’s carbon pricing dashboard.
The analysis showed a small proportion
(4.8% of FY 2024 balances) of lending
to sectors with higher exposure or
vulnerability to climate-related risks.
Our sectoral and geographic lending
distribution has not changed materially
between FY 2024 and FY 2025, as
shown in Tables 7 and 8.
We have also reviewed the qualitative
scenario analysis conducted last year
using the Network for Greening the
Financial System (“NGFS”) scenarios,
shown in Table 2. The potential impacts
of the three scenarios on climate-related
risks and opportunities are unchanged,
and we have updated the strategic
considerations to reflect the continued
evolution of our approach in 2025.
6. Working groups include: UK Finance Industry Working Group on ESG implications for SMEs, and the PCAF (UK chapter) Working Group on Business Loans and
Unlisted Equity.
7. In the 2024 Annual Report and Accounts, this target was worded as “Interim (2025) partial net zero (market based) for Scope 1, 2 and 3.6 (business travel)”.
Subsequently, we refined the wording to take account of the SBTi’s draft Corporate Net-Zero Standard v2 released November 2025 and its tighter criteria on the
use of net zero terminology. The intention – and outcome – of the target remain the same, however, and further details are disclosed in Metrics and targets.
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1. Strategy continued
1.3 Resilience of our strategy continued
As our AuM 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 vs. a baseline of no physical or
transition risk.
This qualitative approach to long-term
climate scenario analysis aligns
proportionately to the materiality of our
climate-related risks and opportunities
and to the short time horizons of our
lending. In May 2025, the NGFS released
new short-term climate scenarios – the
first publicly available framework to
analyse potential impacts of climate
policies and climate change within
Funding Circle’s five-year ERMF horizon.
In Q4 2025, we convened internal
subject matter experts and our external
sustainability advisers to consider the
potential future incorporation of the
NGFS short-term scenarios in our
existing annual stress testing scenarios.
This remains under consideration with
our Finance team, with a view to
developing a longer-term roadmap
to building our quantitative climate
scenario capabilities.
Environmental, social and
governance(“ESG”) continued
Climate and environment continued
Table 2: Summary of climate scenario analysis
Potential impacts
Characteristics
NGFS–OrderlyTransition(Net
Zero2050)
NGFS–Disorderly(Delayed
Transition) NGFS–HotHouseWorld(“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 1.4
O
C 1.6
O
C 2.6
O
C
Physical risks Low Medium High
Impacts and considerations
Time horizons affected Short, medium and long term Long term Long term
Potential impact on climate-
related risks and
opportunities
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 Forbearance procedures enhanced in 2025 to explicitly reference climate-related extreme events
and will continue to be monitored and evolved as necessary to support SMEs undergoing
temporary stress.
Continued development of capabilities to assess and manage
transition risks (e.g. financed emissions improvements) and
ongoing improvements to our climate approach and disclosures.
Continued development of capabilities to assess and manage
physical risks (e.g. postcode-level flood risk, scenario analysis).
No material change to strategy or financial performance currently anticipated.
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2. Governance
2.1 Board oversight
The Board of Directors at Funding Circle
holds ultimate responsibility for climate-
related risks and opportunities and
delegates certain matters to two
Committees, as outlined below. During
2025, the previous Chair of the Board and
ESG Committee, Andrew Learoyd, retired
from the Board and was replaced by
Ken Stannard, and Richard Harvey was
appointed Chair of the Risk Committee,
bringing a combined 60 years of industry
experience to their new positions. Helen
Beck, our Senior Independent Director,
is acting as Interim ESG Committee Chair
to provide steady leadership during a
review of the Committee’s structure.
With over 25 years in financial services,
and having received training in climate
transition planning, Helen ensures our
ESG oversight remains robust during
this transition.
During the ESGC’s November 2025
meeting, training was provided by our
external sustainability advisers, Perigon
Partners. This provided an overview of
the changing external and regulatory
landscape, how we are positioned vs.
UK banking peers, and views on priority
focus areas for 2026. This was followed
by a more technical session with Risk
and Finance teams on climate scenario
analysis and anticipated incoming UK
legislation and regulation.
In line with the assessed low materiality
of climate-related risks and opportunities,
no trade-offs were identified in 2025
in relation to our strategy, nor were
climate performance metrics included
in remuneration policies. Broader
sustainability-related objectives are
included as part of non-financial objectives
in determining the CEO and CFO annual
bonus, as outlined on page 104.
2.2Management’srole
Executive responsibility for climate-related
risks and opportunities is held by the CEO,
who delegates climate risk management
to the Chief Risk Officer (“CRO”).
Management responsibility for execution
and delivery of our climate (and broader
ESG) strategy sits with the Chief Legal
Officer and Company Secretary. Risk
oversight is provided by the Management
Risk Committee (“MRC”), which reports
into the Board RC described above.
The Enterprise Risk Management
Framework (“ERMF”) and Climate Risk
Management Framework (“CRMF”) are
the principal processes through which
management is regularly informed about
climate-related issues. Both are owned
by the CRO, reviewed by the MRC and
approved by the Board RC annually.
Additionally, in 2025, the majority of our
Executive team joined the externally
facilitated training session during the
ESGC’s November meeting.
3. Risk management
3.1 Identification and assessment of
climate-related risks
Climate-related risks are identified
and assessed annually under the ERMF
and CRMF review processes.
In the Enterprise Risk Taxonomy, climate-
related risk is an explicit Level 1 Key Risk
under the principal risk of Strategic Risk.
It is defined as a cross-cutting risk type
that may manifest through other principal
risk categories and covers transition
and physical risks. The Risk Appetite
Statement in relation to strategic risks is
that Funding Circle “will make efficient
use of its available resources to build a
sustainable, diversified and profitable
business that can successfully adapt
to environment and technological
changes, and respond adequately
to competition pressures”.
The construct and taxonomy of the ERMF
is refreshed and approved by the Board
RC each year, with no change in 2025
in relation to climate risk. Climate risk is
assessed annually through the ERMF
review cycle, which is approved by the
Board RC and the ERMF Risk and Control
Self Assessment process.
Evidence considered in the self-
assessment includes a market scan of key
climate-related risks and opportunities
(Table 1), qualitative scenario analysis
(Table 2), and sectoral and geographical
lending distribution (Tables 7 and 8). The
materiality of potential climate-related
impacts is assessed using our standard
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).
Table 3: Board oversight of climate-related risks and opportunities
Committee Climate-related Terms of Reference
Frequency of climate-related
updates
Key matters overseen or approved in
2025
Board Ultimate oversight as part of risk
management and strategic planning
processes.
Annual as part of ARA
1
approval process.
l Final approval of ESGC and RC
items listed below.
l ESG Framework outlining
approach to ESG.
ESG Committee
(“ESGC”)
Oversight of the Group’s ESG strategy
including climate-related opportunities.
Twice a year, with
additional written updates
as required.
l New internal Transition
Principles.
l Approach to climate targets.
l Progress against climate targets.
Risk Committee
(“RC”)
Responsibility for climate-related (and
broader ESG) risk management.
Annual ERMF
2
and CRMF
3
process.
l Climate as part of the ERMF and
Enterprise Risk Taxonomy.
l Climate risk appetite thresholds
in the CRMF.
Acronyms: 1. Annual Report and Accounts. 2. Enterprise Risk Management Framework. 3. Climate Risk Management Framework.
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3. Risk management
continued
3.1 Identification and assessment of
climate-related risks continued
As with 2023 and 2024, 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,
our SME customers and institutional
investors. The residual risk rating for climate
risk in 2025, considering the effectiveness
of controls in place, was “low” and
unchanged from the prior year.
Additionally, the CRMF sets risk appetite
thresholds for the proportion of AuM
subject to high exposure to physical risks
and carbon-intensive sectors. Physical
risks are taken from the UK National Risk
Register – those with a likelihood ≥5% and
impact of significant and higher – while
carbon-intensive sectors are defined as
agriculture, electricity and utilities, and
mining and quarrying as shown in Table 7.
Balances as at 31 December 2024 were
assessed and the adequacy of the
thresholds considered in February 2025,
with the process underway for 2025
year-end balances at the time of reporting,
as part of the annual CRMF and risk
metrics reviews.
3.2 Management and integration of
climate-related risks
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. 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.
We intend to integrate the current CRMF
data inputs into the annual risk metrics
process in 2026, and continue to explore
enhancements to data (e.g. financed
emissions accuracy and granular flood
risk information) and capabilities (e.g.
internal scenario analysis and climate risk
modelling). While current processes for
identifying, assessing and managing
climate-related risks are aligned to the
materiality of these risks, these steps will
ensure that processes remain robust,
proportionate and integrated.
4. Metrics and targets
4.1 Greenhouse gas emissions metrics
and targets
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 1, 2,
3.5, 3.6 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 2023/24,
eGRID2023, UK GHG Conversion Factor
2025, EPA GHG Emission Factor Hub 2025,
Base Empreinte Ademe 23.9, and Greenly
1.0) selected based on geographical
relevance and data quality.
We undertake annual independent third
party verification of our GHG emissions,
excluding Scope 3.15, in accordance with
ISO 14064-1. Verification of our 2024
emissions was completed at a limited level
of assurance, with a materiality threshold of
5%, covering all activities under our
operational control and all relevant
emissions categories, with any exclusions
(such as category 3.15) clearly identified.
Verification of our 2025 emissions is
scheduled for 2026.
Financed emissions
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 £ of revenue. 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.
In 2025, we transitioned from Exiobase
v3.9, base year 2019, to Watershed’s
Comprehensive Environmental Data
Archive (“CEDA”) dataset, base year 2022,
in line with PCAF’s principle of using the
most up-to-date and accurate data. For
comparability we have re-calculated 2024
financed emissions based on the new
CEDA emissions factors. 2023 emissions,
which used Exiobase country-level factors,
have not been re-calculated. As shown in
Table 4, financed emissions are broadly
stable vs. 2024 comparatives (+2%), despite
a small increase in corresponding AuM
(+7%). As a result, AuM emission intensity
has slightly decreased for FY 2025.
Our exposure-weighted data quality score
for 2025, based on the PCAF Standard,
was 4.01, where 1 is the highest data quality
and 5 is the lowest. This was also 4.01 in
2023 and 2024.
These methodology updates and data
limitations impact the accuracy of the
reported figures. We anticipate further
fluctuations until data quality and
methodologies improve and stabilise,
and continue to explore ways to
develop more accurate SME emissions
data through industry working groups and
pilots with data partners, recognising the
industry-wide challenges on sourcing
primary emissions data for SMEs.
As Funding Circle holds only a small
proportion of credit extended on its own
balance sheet (<7% of AuM), 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 volume of
on-balance-sheet loans) and the overall
emissions attributed to the total AuM.
Further detail is provided on page 41.
Comparative periods
We completed the sale of our US business
on 1 July 2024. In line with the GHG
Protocol for treatment of structural business
changes, emissions from our US business
were removed, where possible, from 2024
reported figures and comparative periods.
We have reclassified office heating
emissions from Scope 3 category 8 to
Scope 1, reversing the change made in
the 2024 report. While these emissions
were previously reported as Scope 3
due to limited direct control over building
systems under the GHG Protocol’s
operational control approach, a change in
building management and increased tenant
engagement on building decarbonisation
potentially alter the practical level of
influence we can exert. In light of this,
and to support clearer stakeholder
understanding of our operational emissions
boundary, we consider Scope 1 to be the
most transparent and decision-useful
classification for these emissions.
As described above, financed emissions
figures are not comparable between 2023
and 2024/2025.
Environmental, social and
governance(“ESG”) continued
Climate and environment continued
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38
Emissions and energy reporting
Table 4: Funding Circle Holdings GHG emissions
Global GHG emissions data for period 1 January to 31 December
2025
1
tCO
2
e
2024
2
(comparative)
tCO
2
e
2024
tCO
2
e
2021
tCO
2
e
Scope 1
3
37 110 — 129
Scope 2
4
– location based 36 51 51 340
– market based — — — 411
Total gross emissions (Scope 1 and 2) – location based 73 161 51 469
– market based 37 110 — 540
Scope 3 – category 1 purchased goods and services 4,618 5,363 5,718 n/a
Scope 3 – category 2 capital goods
5
154 766 766 —
Scope 3 – category 3 fuel and energy activity 18 15 15 n/a
Scope 3 – category 4 upstream transportation and distribution
6
433 355 — n/a
Scope 3 – category 5 waste generated in operations
7
11 29 29 3
Scope 3 – category 6 business travel 66 279 279 113
Scope 3 – category 7 employee commuting 321 230 230 n/a
Scope 3 – category 8 upstream leased assets
8
13 — 110 n/a
Total Scope 3 supply chain gross emissions 5,634 7,0 37 7,147 116
Total gross emissions (Scope 1, 2 and 3 excl. 3.15) – location based 5,707 7,198 7,198 585
– market based 5,671 7,147 7,147 656
Scope 3 – category 15 investments: financed emissions – AuM
9
2,310,832
2,269,616 2,798,767 n/a
– 3.15 – AuM: Scope 1 and 2 (tCO
2
e) 600,903 588,900 727,218 n/a
– 3.15 – AuM: Scope 3 (tCO
2
e) 1,709,929 1,680,716 2,071,549 n/a
– 3.15 – intensity ratio (tCO
2
e/£m)– AuM 537 565 697 n/a
Scope 3 – category 15 investments: financed emissions – balances on balance sheet 309,708 158,360 1 97,783 n/a
– 3.15 – balances on balance sheet: Scope 1 and 2 (tCO
2
e) 83,049 43,123 54,419 n/a
– 3.15 – balances on balance sheet: Scope 3 (tCO
2
e) 226,659 115,237 143,364 n/a
Total gross emissions (Scope 1, 2 and 3 incl. 3.15) – location based 315,415 165,558 204,981 n/a
– market based 315,379 165,507 204,930 n/a
Full-time employee (“FTE”) (average over the applicable reporting period) 739 788 788 929
Total income (£m) 222.5 161.7 161.7 206.9
Intensity ratio (Scope 1 and 2): tCO
2
e/FTE – location based 0.10 0.20 0.06 0.50
– market based 0.05 0.14 — 0.58
Intensity ratio (Scope 1 and 2): tCO
2
e/£m – location based 0.33 1.00 0.32 2.27
– market based 0.17 0.68 — 2.61
Intensity ratio (Scope 1, 2 and 3 excl. 3.15): tCO
2
e/FTE – location based 7.72 9.13 9.13 0.63
– market based 7.67 9.07 9.07 0.71
Intensity ratio (Scope 1, 2 and 3 excl. 3.15): tCO
2
e/£m
– location based 25.65 44.51 44.51 2.83
– market based 25.49 44.20 44.20 3.17
1. Figures for 2025 for Scope 1,2 and 3, excluding
3.15, are due for external verification in 2026
(limited assurance, 5% materiality threshold).
FY 2024 figures have been verified as described
on page 38.
2. We provide comparative 2024 figures following
the reclassification of office heating emissions
from Scope 3.8 to Scope 1, as per footnote 3.
Furthermore, 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). In
July 2024 we also fully relocated from two floors
to one, reducing our London office space.
3. Emissions from natural gas heating of our UK
leased office were reported as Scope 3 category
8 in the 2024 Annual Report, but reclassified as
Scope 1 for 2025, and the 2024 comparative
period shown, including comparative intensity
ratios. This reflects a change in building
management and increased tenant engagement
on building decarbonisation, which may
potentially improve the practical level of
influence we can exert over heating choices.
4. Scope 2 includes purchased electricity and as
per the GHG Protocol Corporate Standard we
also apply the market-based use of Renewable
Energy Certificates (“RECs”).
5. Category 3.2 capital goods emissions were
exceptionally higher in 2024 due to our London
office refit.
6. Category 3.4 upstream transportation and
distribution was included in 2025 for the first
time to show emissions from our direct mail
marketing separately (previously included in
category 3.1), and we provide comparative
figures for 2024.
7. Category 3.5 waste generated in operations
peaked in 2024, although the reasons remain
unclear and possibly partly due to service
provider data inconsistencies.
8. Category 3.8 reflects rented office equipment.
9. For transparency we report on financed emissions
for our on-balance-sheet balances, as well as
for total AuM, and we include defaulted loans.
In addition, we follow PCAF’s guidance to report
Scope 1 and 2 financed emissions separately
from Scope 3. We provide comparatives for
2024 to reflect the move to CEDA’s emissions
factors dataset.
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39
4. Metrics and targets continued
4.1 Greenhouse gas emissions metrics and targets continued
Emissions and energy reporting continued
Table 5: Regional breakdown of energy consumption data for period 1 January to 31 December
Kilowatt-hour
equivalent
(“kWhe”)
Scope 1
2
Scope 2
2025 2024 2023 2022 2021 2025 2024 2023 2022 2021
Region
1
UK 117,301 512,544
2
593,164 4 57,208 554,366 205,032 262,420 359,778 402,758 359,638
US n/a — — — 79,469 n/a n/a 385,700 545,219 643,284
Total 117,301 512,544 593,164 457,208 633,835 205,032 262,420 745,478 947,977 1,002,922
1. We completed the sale of our US business on 1 July 2024, and have only reported data for ongoing operations for 2024. In July 2024 we also fully relocated
from two floors to one floor, reducing the size of our UK London office.
2. We have restated 2024 Scope 1 data to reflect the reclassification in 2025 of emissions from gas heating of the UK leased office to Scope 1, from Scope 3
category 8 in 2024, following changes to the building management (see Table 4 footnote 3).
Targets and performance
Table 6: GHG emissions targets
Target
Emissions
scopes
Target
date 2025 performance Status Comments
Net zero All 2050 Total emissions
(Scope 1, 2, 3 incl.
3.15 balances on
balance sheet) ↑
91% vs. 2024.
Too early
to tell
Net zero target is in line with UK
Government’s 2050 net zero target.
Interim operational: Minimise
emissions and mitigate hard-
to-abate residual emissions
through investment beyond
our value chain
1
1, 2, 3.6 2025 Relevant emissions
↓ 74% vs. 2024 and
↓ 84% vs. 2021
(market based).
Met;
ongoing
mitigation
Emissions minimised to the extent of
Funding Circle’s influence. Verified
carbon credits in excess of residual
emissions have been purchased
and retired for 2025
2
.
Supplier emissions: Assess
suppliers representing
≥67% of supplier emissions
3
and engage with any which
individually contribute >2%
of emissions and do not
currently disclose science-
aligned net zero targets
3.1, 3.2, 3.4 2026 Preparatory analysis
in Q3 2025 showed
c.58% of supplier
emissions covered
by science-aligned
targets.
On track “Supplier emissions” refers to
Scope 3 category 1, 2 and 4
emissions not already included
in other scopes or categories of
emissions and excludes broker
commissions, which are treated
as nil-emission financial flows.
1. In the 2024 Annual Report, this target was worded as “Interim (2025) partial net zero (market based) for Scope 1, 2 and 3.6 (business travel)”. We have revised
the wording – but not the intention – of the target to clarify exactly what the target involves.
2. 250 tonnes of carbon removal credits were purchased in respect of residual 2025 emissions, which totalled 103 tCO
2
e across Scopes 1, 2 and 3.6 on a market
basis. Electricity purchased by Funding Circle is 100% renewable, backed by appropriate renewable energy certificates.
3. Supplier emissions are estimated on a spend basis with key emissions factors sources being Exiobase 3.8.2, Greenly 1.0, as well as supplier company reports
when available.
Environmental, social and
governance(“ESG”) continued
Climate and environment continued
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2025 was the first full year of UK-only
emissions following the sale of our US
business in mid-2024. Although
US-driven emissions were excluded,
where possible, from 2024 figures, we
were unable to disaggregate Scope 3
categories 1 and 6, so the reductions in
these areas in 2025 are likely driven
mostly by the US divestment.
Further efforts to minimise Scopes 1, 2
and 3 category 6 emissions in support of
our interim operational target included:
l maintenance of our travel policy, which
restricts flights to essential cases;
l continued supportive flexible working
policies, which minimise travel;
l a full year of impact from efforts
in 2024 to consolidate our London
head office onto one floor and
upgrade lighting;
l continued procurement of 100%
renewable electricity, backed by
renewable energy certificates; and
l initial engagement with the new
building management company of our
head office on sustainability plans,
including to decarbonise the heating.
Other actions to support near-term or
future decarbonisation included:
l preparatory analysis on supplier
emissions to conduct an initial
screening and develop a methodology;
l continued engagement of employees
on recycling, with our recycling rate
stable at 77%;
l updated financed emissions
methodology to use improved
economic emissions factors database;
l engagement and testing with external
data providers on emerging SME-focused
(financed) emissions solutions;
l development of internal Transition
Principles; and
l review of SBTi updated draft Corporate
Net-Zero Standard and Financial
Institutions Net-Zero Standard.
Funding Circle’s most significant category
of emissions – financed emissions – are
not currently subject to quantitative interim
targets and are responsible for the 91%
increase in total emissions (Scope 1, 2
and 3, including 3.15 balances on balance
sheet). Total location based emissions
excluding 3.15 were down 21% in 2025 vs.
2024 and Scope 1 and 2 location based
emissions were down 55% in the year and
84% from the 2021 baseline. The increase
in financed emissions, which dwarfs all
other emissions categories, is mostly due
to temporary fluctuations in the proportion
of assets under management held on
Funding Circle’s balance sheet. By way
of comparison, financed emissions for
all assets under management increased
by 2% while total portfolio balances grew
by 7%.
As discussed in earlier sections, we are
focused on improving data quality and
granularity to provide a more accurate
view of these emissions and continuing
to lay critical groundwork in our transition
thinking, including understanding the
impacts of temporary balance sheet
movements and business model
characteristics, before considering
targets. We do not incorporate climate-
related issues into remuneration policies
or targets as these are not assessed as
material, nor do we operate an internal
carbon price. Broader sustainability
objectives are, however, part of non-
financial objectives in determining the
CEO and CFO annual bonus, as outlined
on page 104.
Carbon credits
Funding Circle uses carbon credits to
mitigate its hard-to-abate residual
emissions across Scopes 1, 2 (market
based) and 3 category 6 (business travel)
from 2025, having exercised the actions
within its control to minimise these
emissions as far as possible. We source
quality carbon credits by targeting an
average purchase price of £30 per tonne.
This investment level aligns with current
voluntary carbon market indicators for
high integrity credits. Credits purchased
and retired in relation to 2025 emissions
were as follows:
l AgreenaCarbon nature-based carbon
removal credits: 250 tonnes CO
2
e.
AgreenaCarbon is a Verra Verified
Carbon Standard (“VCS”) project
operating across Europe, focused on
reducing agricultural GHG emissions and
increasing carbon removals through
regenerative farming practices.
4.2 Other climate-related risk metrics
and targets
Metrics used for monitoring
climate-related risk
Funding Circle monitors its sectoral and
geographical lending portfolio distribution
annually to inform its assessment of
climate-related physical and transition
risks, which are summarised in Tables 7
and 8 below. In 2024, we conducted a
high level assessment of physical risk
exposure by hazard type; however, we
have not repeated this assessment in
2025 as it did not add significant insights,
and CRMF metrics are under review as
we integrate them into the risk metrics
review cycle in 2026.
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Thresholds and performance
Internal thresholds for climate-related
physical and transition risks defined by
the CRMF were unchanged between
2025 and 2024. Balances as at
31 December 2024 were within these
thresholds as reported for 20248; we
expect no significant movement for
balances at 31 December 2025, and will
refresh the assessment for 2025 data
through our annual risk metrics review
cycle in 2026.
As described in the Risk management
section, physical risks are taken from the
UK National Risk Register – those with a
likelihood ≥5% and impact of significant
and higher – while carbon-intensive
sectors are defined as agriculture,
electricity and utilities, and mining and
quarrying as shown in Table 7. In 2025,
as for 2024, the physical risk on the
register rated as sufficiently likely and
impactful was ‘low temperature and
snow’. However, as global temperatures
continue to rise, we recognise the
increasing focus on physical risks and
adaptation, particularly noting the advice
issued by the Climate Change Committee
to the UK Government in October 2025,
which set out significant changes to the
UK’s weather and climate at 2°C of
warming above pre-industrial levels.
As such, and as discussed in the Strategy
and Risk management sections above,
we have started investigating the build of
internal capabilities to assess postcode-
level flood risk. Our lending continues to
support a broad geographical distribution
of SMEs across the UK as shown in
Table 8.
Environmental, social and
governance(“ESG”) continued
Climate and environment continued
8. Proportion of balances outstanding as at 31 December 2024 subject to high exposure to physical risks was <1%. Proportion of balances outstanding as at
31 December 2024 to carbon-intensive sectors was 1%.
4. Metrics and targets continued
Table 7: Sectoral lending distribution
Sector (based on CEDA BEA classification) AuM 2025 AuM 2024
Construction 18% 18%
Professional and Technical Services 14% 14%
Retail Trade 10% 10%
Administrative, Support and Waste Services
8% 8%
Manufacturing 8% 9%
Wholesale Trade 6% 7%
Other Services 6% 5%
Accommodation and Food Services 5% 5%
Health Care and Social Assistance 5% 4%
Transportation and Warehousing 4% 4%
Real Estate, Rental and Leasing 3% 3%
Information 2% 2%
Arts, Entertainment, and Recreation 2% 2%
Educational Services 2% 2%
Finance and Insurance 2% 2%
Agriculture 1% 1%
Utilities <1% <1%
Mining and Quarrying <1% <1%
Management of Companies <1% <1%
unknown 4% 4%
Total “carbon related” 35% 35%
Note: Sectors in bold indicate “carbon-related” sectors as per TCFD. Italicised
sectors indicate sectors identified by Funding Circle as “carbon-intensive”,
and are a subset of “carbon-related” sectors.
Table 8: Geographical lending distribution
UK region AuM 2025 AuM 2024
London 18% 18%
South East 16% 16%
Midlands 15% 16%
East Anglia 11% 11%
North West 10% 11%
South West 8% 8%
Yorkshire and The Humber 7% 7%
Scotland 5% 5%
Wales 4% 4%
North East 3% 3%
Northern Ireland 1% 1%
n/a 2% n/a
Note 1: In Tables 4, 7 and 8, we include defaulted loans for the estimation of
financed emissions and the climate-related risk analysis, whereas defaulted
loans are excluded when reporting AuM elsewhere in this Annual Report.
Note 2: In Tables 4, 7 and 8, we provide comparative data for 2024, following
the shift to CEDA’s sector classification for 2025, as well as a more granular
classification for UK regions (in Table 8) vs. the one used in our 2024
Annual Report.
4.2 Other climate-related risk metrics and targets continued
Metrics used for monitoring climate-related risk continued
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42
FundingCirclepowersFrontierEnergy’s
next chapter.
Barnaby Black, an electrician
with extensive experience in
renewables – including six years
building solar and battery back-up
systems in Tanzania – co-founded
Frontier Energy in 2023. The
company helps accelerate the
UK’s green transition by designing
and installing high quality
domestic and commercial solar
PV, battery storage, and electric
vehicle charging solutions
across the UK.
Frontier Energy’s mission delivers
both social and environmental
impact and is embedded in its
product and its people. Beyond
empowering its clients to lower
their carbon footprints, the
company actively employs and
trains up local labour alongside
its contractors and core team,
ensuring it builds the skilled
workforce required for the net
zero economy. Frontier Energy’s
work involves highly accredited
installations, including large-
scale commercial and agricultural
solar projects, that drive down
the UK’s energy dependence
on fossil fuels.
Due to the high capital outlay
and unpredictable nature of the
market (which Barnaby refers
to as the ‘solar coaster’), the
business needed cash flow
support. In 2024, Frontier Energy
was approved for a loan from
Funding Circle. This quick and
straightforward finance helped
smooth out the volatility, ensuring
consistent operations, covering
labour costs and allowing the
directors to focus on securing their
own larger commercial projects
and developing their Operations
and Maintenance services.
The process with
Funding Circle was very
straightforward and clear.
Itdid the job, helping to ease
out the unpredictable cash
flow curve so we could focus
on growing thebusiness.”
Barnaby Black
Co-Founder, Frontier Energy
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43
Non-financial and sustainability
information statement
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 32 to 42.
Reporting
requirement Policies and standards
Information necessary to understand our
business and its impacts Page reference
Environmental matters Funding Circle ESG Framework* ESG, including climate disclosures consistent
with TCFD 30 to 44
Risk management 57 to 60
Principal risks and uncertainties 61 to 68
Board decision-making and section 172(1) duties 78
Report of the ESG Committee 94 to 95
Our employees Funding Circle Code of Conduct*
People at Funding Circle*
Whistleblowing Policy*
DEI Statement
Communication Handbook
Our people 26 to 29
ESG 30 to 44
Risk management 57 to 60
Principal risks and uncertainties 61 to 68
Corporate governance report 76 to 83
Joint Report of the Audit and Risk Committees 88 to 93
Report of the ESG Committee 94 to 95
Social matters Funding Circle ESG Framework*
Customer complaints*
ESG 30 to 44
Social impact 30 to 31
Engaging our stakeholders 45 to 48
Our customers 18 to 19
Risk management 57 to 60
Report of the Directors 112 to 115
Human rights Human Rights Statement*
External Assurance
Supplier Standard*
Supplier Code of Conduct*
Modern Slavery Statement*
ESG 30 to 44
Corporate governance report 76 to 83
Report of the ESG Committee 94 to 95
Risk management 57 to 60
Principal risks and uncertainties 61 to 68
Anti-corruption and
anti-bribery matters
Anti-Corruption and
Bribery Policy*
Risk management 57 to 60
Principal risks and uncertainties 61 to 68
Principal risks and
risk management
Enterprise Risk Management
Framework Policy
Risk management 57 to 60
Principal risks and uncertainties 61 to 68
Viability Statement 69 to 70
Joint Report of the Audit and Risk Committees 88 to 93
Description of business model Our business model 12 to 13
Our strategy 14 to 15
Non-financial KPIs Our strategy 14 to 15
Engaging our stakeholders 45 to 48
*
Relevant policies
can be found on
theCompany’s
Sustainability
webpage
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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44
Engaging our stakeholders
Customers
How we engage
l Real-time monitoring of customer
insight from every stage of the
customer journey, human management
of Google and Trustpilot reviews,
and dedicated customer support
via social media.
l Regular SME surveys, focus groups,
in-depth interviews and in-person
borrower visits by the leadership and
broader team to shape our product
and user experience.
l Promotion of our SME customers
through video case studies across
marketing channels, including featuring
borrowers in our TV campaign across
TNT Sports for the first time.
l Encouraging Circlers to support our
borrowers through the ‘Purple Pages’
borrower directory, and sourcing office
supplies, gifts and services from
customers wherever possible.
l Brand monitoring to a nationwide SME
panel measuring sentiment, satisfaction
and comparison against competitors.
l Regular engagement with introducers
through our PREM Rugby sponsorship,
and presence at the biggest SME
broker events.
l Email updates to communicate new
product launches, the latest on
government schemes, new features
and service improvements for existing
customers as well as leads.
Outcomes of engagement
l We achieved a NPS (Term Loans) of 79
(2024: 79).
l Our Trustpilot score remains at
an ‘Excellent’ 4.6 rating.
l We added new features across
our products, and introduced a
shorter-term loan product to back
more SMEs in the UK with the
funding they need to win.
l We delivered a specially designed
Gen AI event for our borrowers,
inviting business owners to our
offices to help equip them with
the tools they need to use Gen AI
within their business.
We actively engage with
all our stakeholders
Our shared mission with borrowers, institutional investors, shareholders
and our people ensures 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 2025, we engaged in a variety of ways to ensure our stakeholders
continued to feel connected and supported at all times.
Section172(1)
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 72 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 page 78.
Innovative products and multiple customer
touch points enable us to engage with
and serve more SMEs than ever before,
whatever their business needs.
79
NPS (Term Loans)
4.6
‘Excellent’ Trustpilot score
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45
Circlers
How we engage
l Regular All-Hands meetings and our
biannual Company- wide events,
Full Circle and Circle In, providing
an opportunity to reinforce our values
and culture by bringing everyone
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.
l Internal recognition through our
values awards and recognising
Circlers monthly through our
‘Incredible Circler’ initiative.
l Providing Circlers with the right tools
and benefits to enable them to bring
their whole selves to work, including
our daily Just Eat lunch offering and
barista-made coffee, amongst others.
l Empowering Circlers with structured AI
literacy programmes, equipping every
team member with the skills to shape
their development and the future of the
business by becoming AI fluent.
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 our Female Empowerment
Programme for the third year, focused
on enhancing the careers of women
in the business.
l Backed Circlers with a passion for
sports, including Holly Errington
at Gravesend Women’s RFC
with sponsorship.
l Delivered an allyship training
programme to further strengthen
our education on diversity, equity
and inclusion.
l Supported Circler resource groups
in delivering over 43 initiatives
and events.
l 2025 engagement results achieved a
record overall score of 74% with 75%
recommending Funding Circle as a
great place to work.
l We are proud to announce that, as
of December 2025, we achieved our
HM Treasury’s Women in Finance
Charter pledge, which is a commitment
to support the progression of women
into senior roles in the financial
services sector.
74%
engagement score
75%
recommend Funding Circle
as a place to work
We’reonamissiontobacksmall
businessesandit’sourpeoplethat
make that happen. To succeed,
we create a culture where Circlers
thrive and share our mission, values
and ambition.
Above: Circlers at the annual Circle In event.
Left: Circlers at Circle In event social, celebrating
Funding Circle’s 15th birthday.
Engaging our stakeholders continued
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46
Institutionalinvestors(funders)
Providing stable, robust 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 Institutional demand to fund loans remains strong, with an
active investor pipeline for the future as well as the renewal
of a number of facilities in 2025.
l According to J.P. Morgan data, Funding Circle, on behalf of
our funding investors, is the largest issuer of public bonds
backed by UK SME loans in the last decade, thereby
achieving one of the central banks’ objectives of increasing
lending to the real economy via the capital markets.
l We cemented our position as a leading European/UK SME
ABS issuer by facilitating our ninth UK public Securitisation
(SBOLT 2025-1), with loans contributed by our long-term
funding partner, Waterfall Asset Management.
l In the year, our funding base continued to grow with the
renewal of our long-standing partnership with Waterfall
Asset Management, where a further £750 million
commitment saw us surpass a landmark £3 billion in total
financing together. We also extended our strategic
collaboration with TPG Angelo Gordon and Barclays through
a new £300 million forward flow deal, while securing a £200
million agreement with Deutsche Bank to specifically bolster
support for UK small businesses via our core Term Loans.
l Our partnership with Bayview Asset Management, LLC,
supported by credit facilities from J.P. Morgan and Citi,
successfully surpassed £1 billion in total funding. To fuel
the scaling of our products, we also secured a dedicated
£291 million credit facility from Citi for FlexiPay and our
shorter-term loan product. Together, they demonstrate
our ability to attract diverse, high quality capital to provide
the fuel for SMEs up and down the country.
£2.2bn
in forward flow commitments
for our Term Loans business
£2.2bn
SBOLT issued as at
31 December 2025
Shareholders
30
investors and advisers at
Capital Markets Day
17%
share capital purchased as
part of buyback programme
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 2025, we actively consulted with top shareholders
to get feedback on our proposed Remuneration Policy prior
to it being circulated for approval at our 2025 Annual General
Meeting (“AGM”).
l Held analyst and investor meetings and presentations/
roadshows, as well as ad hoc meetings and events with
shareholders and prospective shareholders.
l The 2025 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 shareholders through the year
when shaping Company strategy and other key developments,
including our new Remuneration Policy in 2025, as well as
announcing a further share buyback.
l We held our first Equity Capital Markets Day in June,
bringing together over 30 institutional investors and advisers.
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47
Communities
The SMEs we serve are at the centre
of our communities. We are passionate
advocates of community engagement
and charitable causes that deliver
societal benefits.
How we engage
l Continual evolution and implementation of our ESG strategy,
which sets out a framework for operating as a responsible
business and is overseen by our Board ESG Committee.
l Regular touch points with institutional investors, including
discussions regarding their ESG and sustainability
investment criteria as they apply to our lending products.
l Participation in industry forums on topics related to supporting
SMEs’ green transitions to a decarbonised economy.
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 the
Circler group, FC Impact.
Outcomes of engagement
l Progressed our ESG goals and strategy, including our
priorities for engagement with our various stakeholders.
l Extended our partnership with Thrive Mental Wellbeing,
a mental health app trusted by the NHS, providing free or
discounted mental health support for all UK small business
leaders and employees.
l Continued multi-year contribution to charities delivering
social and environmental value, such as Earthwatch’s
Great UK WaterBlitz citizen science campaign, and
Hatch Enterprise, which empowers underrepresented
entrepreneurs to launch and grow their businesses, also
with Funding Circle volunteers providing mentoring.
l Raised £11,935 for charity during 2025 and Circlers
contributed 99 volunteering Impact Days in support of a
range of good causes, including our charity of the year,
Great Ormond Street Hospital.
l In January 2026, we achieved Silver Fair Payment Code
accreditation from the Small Business Commissioner,
reinforcing our commitment to prompt and ethical
payment practices.
£12k
raised for charity of the year,
Great Ormond Street Hospital
99
Circler volunteering
impact days
117k
jobs supported by lending
through Funding Circle
£7.9bn
UK GDP contribution from
lending through Funding Circle
Government and regulators
Our goal is for Funding Circle to always
be known as a trusted and reputable
company, and to work with regulators
and industry to deliver the best outcomes
for our SMEs and our stakeholders.
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 rulemaking
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 We have advocated to make the Growth Guarantee
Scheme (“GGS”) a permanent fixture of the UK’s SME
finance landscape to provide long-term certainty for
both lenders and SMEs, avoiding ‘funding cliff edges’.
The British Business Bank (“BBB”) has since committed
to the scheme until 2030.
l Recent 2025 data shared with policymakers demonstrated
that lending via the platform supported 117,000 jobs and
contributed £7.9 billion to UK GDP.
l We responded to the Business and Trade Committee inquiry
into small business strategy, proposing policy solutions
such as supporting growth in the securitisation market.
l Lisa Jacobs represented the interests of SMEs at the
Treasury Committee’s inquiry into SME finance, advocating
for the importance of stability to give SMEs confidence to
invest and grow, and highlighting the vital role of non-bank
lenders in reducing the SME funding gap.
Engaging our stakeholders continued
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Financial review
Overview of the year ended 31 December 2025
We are pleased to report that the Group delivered strong revenue and sustainable
profit growth in 2025, demonstrating continued scalability following the move to
profitability in 2024. This performance was driven by growth across Term Loans
(a longer-term financial product offering) and FlexiPay (a shorter-term line of
credit product) which also incorporates the Cashback card (launched in H2 2024),
demonstrating the strength of our expanded product suite in meeting the diverse
financing needs of SMEs. FlexiPay and the Cashback card are presented as
one segment.
While these two business segments are at different stages of maturity, product
innovation has remained a driver for both. In our more established Term Loans
business, we have successfully expanded our product range to include our shorter-
term loan offering. Simultaneously, in our high growth FlexiPay segment, we have
continued to iterate on features to deepen customer engagement.
Credit extended
(Originations and Transactions) Assets under Management
FY 2025
£m
FY 2024
£m
31 December
2025
£m
31 December
2024
£m
Continuing operations
Term Loans 1,638 1,407 2,755 2,714
FlexiPay 815 492 206 119
Total 2,453 1,899 2,961 2,833
Overall, credit extended grew by 29% to £2.5 billion, with significant growth for
Term Loans and FlexiPay. Assets under management grew to £3.0 billion with credit
performance in line with management expectations.
Strong credit extended translated into revenue growth of 28% to £204.3 million
(2024: £160.1 million), achieving our 2026 revenue guidance a year earlier than
expected. The Group made a profit before tax of £20.3 million (2024: profit before
tax of £3.4 million before exceptional items, profit before tax of £0.8 million after
exceptional items).
Tony Nicol
Chief Financial Officer
We are pleased to report
that the Group delivered
strong revenue and
sustainable profit growth
in 2025, demonstrating
continued scalability
following the move to
profitability in 2024.”
expectations
and delivering growing PBT
Outperforming
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
49
Term Loans
Term Loans originations increased by 16%
to £1,638 million (2024: £1,407 million).
Growth was driven by product innovation
and increased borrower demand, with a
particularly strong Q4 2025.
We continue to look at ways to provide
access to finance for SMEs. Alongside our
principal longer-term financial product,
we met business needs through a range
of other products:
l We expanded our loan proposition with
a shorter-term loan (6 to 24-month
terms). To support the launch, whilst
we tested and iterated this product,
we funded it through our balance
sheet in line with our capital allocation
policy. It was funded through the same
leveraged warehouse as FlexiPay. The
product expansion has been a success
and we onboarded an institutional
investor, Waterfall Asset Management,
in January 2026 to fund the product
going forward. We also sold the
shorter-term loan portfolio to that
investor in line with the value it was
carried at.
l We continued to participate in the
government’s Growth Guarantee
Scheme (“GGS”) which enabled
us to provide finance to SMEs at a
lower cost than we would otherwise
be able to.
l We have also continued to grow
originations through our Marketplace
network of third-party finance
providers. This allows us to support
even more SMEs with access to a
wider range of financing options.
Under our off-balance-sheet funding
model, Term Loans are funded through
agreements with institutional investors.
During 2025, we signed five forward flow
arrangements with investors and we
have c.£2.2 billion future funding in
place including the institutional funders
we onboarded for shorter-term loans
earlier this year (31 December 2024:
c.£2.1 billion).
Assets under Management (“AuM”)
started to grow again and reached
£2.8 billion, as new lending outpaced
the amortisation of the legacy Covid-19
government-guaranteed loans. As at
31 December 2025, the legacy Covid-19
loans represented c.8% of total AuM
(31 December 2024: 27%).
The Term Loans business delivered
revenue of £167.4 million, growing 17%
(2024: £142.6 million). This growth
came principally from originations and
successful scaling of our shorter-term
loan offering. The income from shorter-
term loans is presented within investment
income as we earned interest whilst the
loans were on-balance-sheet. Going
forward this will move to a fee-based
model where we earn an upfront
transaction fee and a servicing fee in
line with our other Term Loans products.
Profit before tax was £32.2 million, up
from £19.0 million in 2024 (£16.7 million
in 2024 after exceptional items). PBT
margin increased to 19.2% (2024: 13.3%;
2024: 11.7% after exceptional items),
showing the strong efficiency and
scalability of our established
platform business.
Segmental highlights
31 December 2025 31 December 2024
1
Continuing operations Continuing operations
Term
Loans
£m
FlexiPay
£m
Total
£m
Term
Loans
£m
FlexiPay
£m
Total
£m
Transaction fees 105.8 1.2 107.0 84.7 0.6 85.3
Servicing fees 35.9 — 35.9 37.5 — 37.5
Interest income 5.6 44.6 50.2 8.3 22.6 30.9
Other fees 5.0 0.1 5.1 5.1 0.1 5.2
Operating income 152.3 45.9 198.2 135.6 23.3 158.9
Investment income 24.3 — 24.3 2.8 — 2.8
Total income 176.6 45.9 222.5 138.4 23.3 161.7
Fair value (losses)/gains (6.7) — (6.7) 4.2 — 4.2
Cost of funds (2.5) (9.0) (11.5) — (5.8) (5.8)
Net income (“revenue”) 167.4 36.9 204.3 142.6 17. 5 160.1
Profit/(loss) before tax (before exceptional items) 32.2 (11.9) 20.3 19.0 (15.6) 3.4
Exceptional items — — — (2.3) (0.3) (2.6)
Profit/(loss) before tax 32.2 (11.9) 20.3 16.7 (15.9) 0.8
1. The segmental results of the discontinued US business for 2024 are not presented above.
Financial review continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
50
FlexiPay and Cashback card
Our line of credit product, FlexiPay, has
demonstrated significant growth to date
and we continue to invest in it. FlexiPay
includes a line of credit product and a
Cashback card.
Transactions grew by 66% to £815 million
(2024: £492 million), driven by customer
growth and new features, increasing
customer engagement. We also continue
to scale Cashback card, launched in
H2 2024. Active accounts increased by
56% to nearly 20,000 in 2025, driving
transaction growth. AuM grew to
£206 million at 31 December 2025
(2024: £119 million), following transaction
and active account growth.
Revenue for FlexiPay was £36.9 million
in 2025, increasing from £17.5 million in
2024, primarily due to interest income
growth. This was driven by a rise in
transactions and fee growth. The average
fee for each drawdown grew to 7.3%
(2024: 5.8%), reflecting a longer average
repayment period after offering wider
repayment terms during 2024 of 1, 3, 6, 9
or 12 months.
The FlexiPay segment has two primary
products – FlexiPay, a line of credit and a
Cashback card. The line of credit offers
the instant ability to settle invoices or
withdraw cash via bank transfer or the
FlexiPay card. A one-off drawdown fee
is charged, with repayment spread over
1-12 months. There is no additional
interest. On our Cashback card, when a
customer transacts, an interchange fee
of 1.75% is earned alongside interest on
any revolving balances. The product
offers customers 2% cashback in the first
six months, followed by 1% thereafter.
FlexiPay is funded through Funding
Circle’s invested capital and a senior debt
facility with Citi. The lines of credit are
part of Funding Circle’s balance sheet.
The interest payable on this facility is
shown in “cost of funds” and is based
on SONIA plus a margin. This facility is
currently £240 million with the ability to
upsize further and is due for renewal in
April 2026. This facility now only funds
FlexiPay, however during 2025, the
facility also funded our shorter-term
loans and was £291 million at 31
December 2025, prior to an institutional
investor being onboarded for future
shorter-term loan funding.
Loss before tax was £11.9 million
(2024: loss before tax of £15.9 million
after exceptional items, loss before tax
of £15.6 million after exceptional items),
with continued investment to support
product momentum. Marketing costs and
expected credit losses are recognised
upfront, creating an initial “j-curve”
effect. However, given the recurring
nature of these products, we expect to
generate repeat revenues that drive
long-term profitability. Over 80% of the
2025 revenues came from customers
onboarded pre-2025 and earlier cohorts
are now cash generative.
Business Unit Revenue stream Driver Typical yield % of FY25 revenue
1
Term Loans
Transaction
fees
Drawdown
fees &
Cashback
card interest
Servicing
fees
Interchange
fees
Investment
income
52%
15%
20%
1%
9%
c.6.5%
Variable
c.1.3% p.a.
1.75%
Variable
Originations
Transactions
AuM
Transactions
Invested
capital
FlexiPay
Cashback card
1. Revenue also includes bank interest from corporate balances representing c.3% of revenue.
How we make money from different products
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
51
Profit and loss
31 December
2025
£m
31 December
2024
Before
exceptional
items
£m
31 December
2024
Exceptional
items
£m
31 December
2024
Total
£m
Transaction fees 107.0 85.3 — 85.3
Servicing fees 35.9 37.5 — 37.5
Interest income 50.2 30.9 — 30.9
Other fees 5.1 5.2 — 5.2
Operating income 198.2 158.9 — 158.9
Investment income 24.3 2.8 — 2.8
Total income 222.5 161.7 — 161.7
Fair value (losses)/gains (6.7) 4.2 — 4.2
Cost of funds (11.5) (5.8) — (5.8)
Net income (“revenue”) 204.3 160.1 — 160.1
Expected credit loss charge (18.3) (8.6) — (8.6)
People costs (68.4) (68.1) (2.3) (70.4)
Marketing costs (62.0) (45.6) — (45.6)
Depreciation, amortisation and impairment (11.1) (13.2) (0.3) (13.5)
Other costs (24.2) (21.2) — (21.2)
Operating expenses (165.7) (148.1) (2.6) (150.7)
Profit/(loss) before tax from continuing operations 20.3 3.4 (2.6) 0.8
Operating income includes transaction
fees, servicing fees, interest income from
loans held at amortised cost, interest on
cash balances and other fees and was
£198.2 million (2024: £158.9 million).
l Transaction fees, representing fees
earned on originations, increased to
£107.0 million (2024: £85.3 million),
driven by originations growth as the
business continued to expand its Term
Loans offering to more segments of
the market. Average yields in the Term
Loans business improved to 6.5%
(2024: 6.0%), driven by product mix.
l Servicing fees, representing income
for servicing AuM, were £35.9 million
(2024: £37.5 million). The fees move in
line with AuM and although year-end
AuM grew slightly compared to 2024,
total servicing fees were lower as a
result of a lower average AuM during
the year. We expect AuM to continue
to grow in 2026 now that new lending
has outpaced legacy amortisation.
Servicing yields remain similar to
2024 levels.
l Interest income includes:
i) FlexiPay interest income which is
a fee charged on transactions and
spread over a number of months,
in line with borrower repayments.
It has increased to £42.9 million
(2024: £21.3 million), driven by
transaction levels and the average
fees on transactions which were
7.3% in the year (2024: 5.8%) due to
longer average payment terms.
ii) Interest earned on cash and cash
equivalents decreased to £6.8 million
(2024: £9.2 million). This interest
applies to the Group’s unrestricted
cash as well as restricted cash drawn
from the Citi facility in anticipation
of future drawdowns. The interest
earned on cash has decreased in line
with the unrestricted cash balance
decrease, driven primarily by share
buybacks and investment in our
shorter-term loan offering where we
temporarily held loans on balance
sheet while we tested and iterated
the product. We have since sold
these loans to an institutional investor.
l Other fees arose principally from
collection fees we recovered on
defaulted loans.
Investment income represents the
income on loans held on balance sheet
at fair value. It increased to £24.3 million
(2024: £2.8 million), driven by the
shorter-term loan product which we held
on balance sheet and received interest
income on during the investment phase
before selling the loans post-year-end.
Net income (“revenue”), defined as
total income after fair value adjustments
and cost of funds, was £204.3 million
(2024: £160.1 million). The fair value
loss in the year of £6.7 million (2024:
£4.2 million gain) related primarily to fair
value movements on the shorter-term
loan products held on balance sheet.
Since year-end, we have sold these
loans to an institutional investor, in line
with the value at which they were held.
Financial review continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
52
The fair value gain in 2024 related to
certain investments 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.
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. This has increased to
£18.3 million (2024: £8.6 million), mainly
driven by growth in FlexiPay AuM.
Operating expenses: At an overall level,
operating expenses increased compared
with 2024. However, costs remain actively
and tightly managed with a 12% increase
in expenses before exceptional items
compared to a 28% growth in revenue.
The primary drivers of cost growth were
the variable expenses associated with
marketing and variable salary costs driven
by the financial outperformance during
the year. Marketing costs increased to
£62.0 million. The remaining costs
increased by 1%.
People costs (including contractors)
represent the Group’s largest ongoing
operating cost and include salary-related
costs plus share-based payments.
Total people costs of £68.4 million were
broadly flat (2024: £68.1 million before
exceptional items) with inflation and
new hires offset by the reduction in
share-based payments. The average
salary per head increased by 11% driven
by the variable costs including sales
team commissions and Group bonus
levels. Year-end headcount increase
was driven by volume related roles and
investment in product development.
The share-based payment charge for
the year, included in people costs, was
£5.9 million (2024: £7.8 million), the
reduction was largely driven by a large
share price increase in 2024 which
increased the national insurance costs
associated with the awards in that year.
Continuing operations
31 December
2025
£m
31 December
2024
£m
Change
%
Salary costs 71.3 69.3 3
Less capitalised development spend (“CDS”) (8.8) (9.0) (2)
Salary costs net of CDS 62.5 60.3 4
Share-based payments 5.9 7.8 (24)
Total people costs 68.4 68.1 —
Average headcount (incl. contractors) 739 788 (6)
Year-end headcount (incl. contractors) 778 726 7
Marketing costs comprise performance
marketing (direct mail and online), brand
spend and broker commission payments.
Marketing costs increased in the year
to £62.0 million (2024: £45.6 million).
This was in line with growth in credit
extended, together with an increase in
the mix of broker commissions which has
a higher cost per acquisition compared to
performance marketing. Additionally, we
continued sponsorship of PREM Rugby
and launched a business partnership
with TNT Sports.
Depreciation, amortisation and
impairment costs of £11.1 million
(2024: £13.2 million before exceptional
items) largely represent the amortisation
of the cost of our capitalised technology
development and the depreciation of
right-of-use assets related to our office
lease. The reduction is driven by some
legacy technology assets reaching the
end of their amortised life during 2025.
Other operating costs, consist of loan
processing costs, data and technology,
professional fees and employee and
office-related costs. Revenue growth
drove an increase in the variable element
of these costs, alongside inflation.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
53
Balance sheet and investments
The Group’s net equity was £228.4 million at 31 December 2025 (31 December 2024: £216.5 million). This increase reflects the profit
generated and recognition of deferred tax assets, partially offset by share buybacks. A deferred tax asset of £23.6 million on brought
forward losses has been recognised at 31 December 2025 as the Group becomes increasingly profitable, and it is probable that there
will be future taxable profits to offset previous losses. A further £2.5 million has been recognised in relation to RDEC tax credits to
offset tax payable. The recognition of a deferred tax asset results in a tax credit increasing the profit for the year and resulting in a
higher earnings per share (“EPS”) figure compared to the position if the deferred tax asset had not been recognised. Note 9 provides
further detail of the impact of deferred tax on EPS.
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
Shorter-term
lending
£m
CBILS/
RLS/GGS
co-investments
£m
31 December
2025
Total
£m
31 December
2024
Total
£m
SME loans and lines of credit 2.1 172.9 120.4 12.3 307.7 118.8
Cash and cash equivalents
Unrestricted 100.8 0.1 — — 100.9 150.5
Restricted — 41.9 5.9 3.7 51.5 37.1
Other assets/(liabilities) — 10.1 (1.8) — 8.3 6.3
Borrowings — (168.8) (98.5) — (267.3) (101.9)
Cash and net investments 102.9 56.2 26.0 16.0 201.1 210.8
Other assets 65.7 — — — 65.7 45.3
Other liabilities (34.7) — — (3.7) (38.4) (39.6)
Equity 133.9 56.2 26.0 12.3 228.4 216.5
The table below provides a summation of Funding Circle’s net invested capital in products and vehicles:
Investment in product/vehicles
31 December
2025
£m
31 December
2024
£m
1. CBILS/RLS/GGS co-investments
1
12 18
2. Shorter-term loans
1
26 —
3. Other — 2
Net invested 38 20
FlexiPay
1
56 34
Total net invested capital 94 54
1. The vehicles through which the funding and lending is generated are set up to be bankruptcy remote, see note 29 of the financial statements for details.
Financial review continued
Deliver
growth strategy in MTP
Invest
to make platform stronger
Future
growth opportunities
Distribute
to shareholders
Capital required to deliver the medium-term plan with existing products
Investment in products to drive opportunities, e.g. co-investment in government guarantee
schemes and seeding products before onboarding institutional funders
Capital for future opportunities to accelerate the Group’s strategy
Further consideration of buybacks and other shareholder distributions, including dividends,
with sufficient cash-backed profits. To date, we have bought back 17% of issued share capital
Capital allocation framework: A disciplined approach to managing capital
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
54
CBILS/RLS/GGS co-investments –
as part of our historical participation
in the CBILS and RLS government-
guaranteed loan schemes and our
ongoing involvement in GGS, we were
required to co-invest c.1% alongside
institutional investors.
Shorter-term loans – this relates to
our shorter-term loan offering which
we launched during 2025 as part of our
Term Loans business with terms from 6
to 24 months. Whilst the product was
tested and iterated, we funded it using
our balance sheet, through the same
leveraged warehouse as FlexiPay, in line
with our capital allocation framework.
The loans were treated as held for sale
and therefore accounted for at fair value.
Cash flow
At 31 December 2025, the Group’s
total cash position was £152.4 million
(31 December 2024: £187.6 million).
Of the total cash balance, £100.9 million
(31 December 2024: £150.5 million) is
unrestricted in its use with £51.5 million
(31 December 2024: £37.1 million) being
restricted. Restricted cash relates to cash
held in the senior debt facility with Citi
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 movements in unrestricted cash
during 2025 have principally been
driven by:
i. trading performance;
ii. ongoing investment in FlexiPay lines
of credit and shorter-term loan
product with external bank debt;
iii. monetisation of on-balance-sheet
SME loans as they have continued
to pay down; and
iv. purchase of shares as part of the
share buyback programme.
Unrestricted free cash flow, which is
an alternative performance measure, has
significantly improved year-on-year
and is positive, driven by the profitability
of the business.
Unrestricted free cash flow 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, Cashback card and shorter-term
loan product. This excludes restricted
cash and cash flows. 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:
2025
£m
2024
£m
Profit before tax from continuing operations 20.3 0.8
Depreciation, amortisation, impairment and modification gains 11.1 13.2
Purchase of tangible and intangible assets and payment of lease liabilities (11.4) (13.6)
Exceptional items — 0.3
Share-based payments and social security costs 5.0 7.2
Fair value adjustments 6.7 (4.2)
Working capital/other (0.9) (0.1)
Unrestricted free cash flow 30.8 3.6
Net movement in trusts, co-investments and SME loans at amortised cost 7.6 12.3
Net movement in lines of credit (net of borrowings) (22.2) (15.7)
Net movement in loans at fair value through profit and loss (net of bonds) (27.6) 3.6
Share buyback/purchase of own shares (39.2) (33.7)
Net proceeds from sale of US business — 30.6
Other (distribution from associates and proceeds from exercise of share options) 1.0 1.4
Movement in the year (49.6) 2.1
Cash and cash equivalents at the beginning of the year 150.5 148.4
Cash and cash equivalents at the end of the year 100.9 150.5
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
55
Share buybacks and share purchases
In May 2025, we announced our third
share buyback programme, for up to
£25 million, which is currently ongoing.
This follows two earlier share buyback
programmes announced in 2024 which
returned £50 million to shareholders. Of
this total of £75 million, c.£64 million has
been purchased through 2024 and 2025
leaving up to c.£11 million remaining.
In the year to 31 December 2025,
23.0 million shares were bought back
and cancelled (2024: 33.5 million shares)
for consideration of £27.6 million
(2024: £33.7 million) inclusive of fees
and expenses under the programme
representing c.7% (2024: c.9%) of the
called-up share capital at the start of
the year.
Additionally, the Group bought back
2.3 million shares that were not cancelled
and were held in treasury for cancellation
or to be used to satisfy share awards. The
consideration was £3.0 million inclusive
of fees and expenses, representing 0.7%
of the called-up share capital at the start
of the year.
A further 7.7 million of ordinary shares were
purchased by the EBT for consideration of
£8.6 million (2024: £nil) for the purposes
of satisfying employee share option plans.
Subsequent events - sale of shorter-term
loan assets
The shorter-term loans held by the Group
were held at a fair value of £120.4 million
at 31 December 2025 (2024: £nil). Since
the year end, an agreement was signed
to sell the loans to a third party, alongside
the signing of a forward flow agreement
for the go forward origination of
the product.
The loans were sold with an economic
cut-off date of 31 December 2025, for an
amount materially aligned with their fair
value at the balance sheet date resulting
in net invested capital of £26 million
being monetised and a post-sale
unrestricted cash of £126.9 million.
Of the £126.9 million, there remains up to
c.£11 million usage for the ongoing
buyback programme and management
holds an operational cash buffer of c.£40
million. We are not regulated like a bank
with regulatory capital, but we hold a
stress buffer for operational purposes. This
leaves c.£76 million of future deployable
cash.
The below table illustrates the post-
balance-sheet impact of the sale as if
applied to 31 December 2025 with the
loans sold, related borrowings repaid
and the net unrestricted cash available
for use in the operating business.
Proforma
balance
sheet post sale
1
Total
£m
31 December
2025
Total
£m
SME loans and lines of credit 187.3 307.7
Cash and cash equivalents
Unrestricted 126.9 100.9
Restricted 45.6 51.5
Other assets/(liabilities) 10.1 8.3
Borrowings (168.8) (267.3)
Cash and net investments 201.1 201.1
Other assets 65.7 65.7
Other liabilities (38.4) (38.4)
Equity 228.4 228.4
1. Proforma balance sheet as at 31 December 2025 post the impact of sale of shorter-term loans post-year-end.
Financial review continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
56
Risk management
Belkacem Krimi
Chief Risk Officer
sustainable
growth in an evolving landscape
Delivering
Funding Circle delivered a
strong 2025. By balancing
our deep credit expertise
with the opportunities
presented by AI, we
are well positioned to
navigatethe evolving
risklandscape of 2026.”
2025: Strong execution amidst a
complex recovery
2025 was a year of delivery. We
executed our strategic pivot successfully,
establishing Funding Circle as a
multi‑product platform that covers
the full spectrum of UK SME needs:
borrowing, paying, and spending.
We managed this transformation
during a time of volatile economic
recovery where lingering uncertainty
dampened business growth. Yet, our
credit portfolios showed remarkable
resilience. That performance proves two
things: the discipline of our underwriting
models, and the adaptability of UK SMEs.
Despite broader economic caution,
demand for lending remains robust.
Although the acute inflation of recent years
has subsided, the macro environment is
still mixed. Interest rates are stabilising, but
we remain watchful of the effect from past
policy tightening. Recent fiscal uncertainty
has naturally weighed on consumer and
business confidence, creating an
environment where prudent, data‑driven
underwriting remains as critical as ever.
We monitor our portfolios closely to
ensure our credit appetite stays aligned
with economic reality.
Evolving threats: the dual nature of AI
and cybersecurity
Artificial intelligence is reshaping financial
services. For us, AI is a powerful lever
for efficiency, distribution, and better
customer service. But this shift inevitably
alters the risk landscape. New technology
brings a new generation of challenges,
from sophisticated fraud to sharper
competitive pressure. To address this,
we have embedded AI oversight directly
into our Enterprise Risk Management
Framework and are committed to rigorous
governance over these emerging risks.
The intersection of AI and cybersecurity
is now a focal point of our risk strategy.
We know AI can amplify threat capabilities,
especially in social engineering and
adaptive malware. Consequently, we are
evolving our controls and continuously
investing in advanced detection tools. We
are committed to developing a rigorous
governance. This ensures our defences
remain robust against emerging threats,
safeguarding the data and financial
interests of our stakeholders.
Looking ahead
We enter 2026 confident in our ability
to perform. While the consensus points
to a period of slow growth, we are alert
to financial stability risks in the wider
market, such as asset price corrections
or volatility in private credit.
We are well equipped to navigate this.
Our diversified funding, rigorous control
frameworks, and deep credit expertise
provide a resilient foundation for a stable
risk outlook amidst a fast‑evolving
environment. By maintaining a disciplined
approach to risk while responsibly
embracing innovation, we will support
UK SMEs through the cycle and create
sustainable, long‑term value.
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Risk management continued
Risk management framework
Funding Circle has embedded an Enterprise Risk Management Framework (‘‘ERMF’’)
that supports the consistent and effective identification, assessment, and management
of risks. It outlines the principles for risk management by setting out our risk appetite,
systems of governance and risk management processes.
Board oversight
The Board is responsible for setting the
strategy, corporate objectives, and risk
appetite. It has delegated responsibility
for reviewing the effectiveness of the our
risk management framework to the Risk
Committee. On the advice of the Risk
Committee, 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.
Risk governance
Funding Circle has a robust risk
governance framework, as outlined
in the Enterprise Risk Management
Framework (‘‘ERMF’’). The Board is
ultimately responsible for defining and
approving the ERMF, with delegations
of authority granted to the Group Board
Risk Committee.
The Risk Committee is supported by
the Management Risk Committee
(‘‘MRC’’), composed of members
of the Executive Committee.
Chief Risk Officer (‘‘CRO’’) and the
Enterprise Risk Management (“ERM”)
function
Our CRO leads the ERM 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 ERMF. He is also
responsible for providing assurance to
the Board that the principal risks are
appropriately managed and that we
operate within risk appetite.
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.
Three lines
We operate a Three lines model to
ensure robust risk governance. The first
line consists of functions that own and
manage risks, comprising both the
Business team and Support functions.
The second line is formed of functions
that provide oversight and challenge to
the first line of defence, specifically the
Enterprise Risk and Compliance team.
The third line is Internal Audit, which
provide independent assurance across
our governance, risk management, and
control frameworks.
Policy governance framework
We have established a policy governance
framework to ensure policies are aligned
to the ERMF risk management principles
and to establish accountability for the
governance and maintenance of policies.
Policies are designed in accordance with
our risk taxonomy to ensure a structured
framework for identifying, mitigating
and controlling our most impactful risk,
and are periodically reviewed.
Risk appetite
We have defined the level of risk that we
are prepared to accept whilst pursuing
our business strategy, recognising a
range of possible outcomes as business
plans are implemented. The Board owns
and sets the risk appetite for the
Company and reviews the risk profile
against appetite periodically.
Risk appetite provides a guideline for
shaping strategies and defining the
level of controls we need to apply in
the management of risk. The appetite
is expressed in the form of qualitative
Risk Appetite Statements and quantitative
risk appetite limits and risk indicators.
Furthermore, risk appetite establishes a
foundation for ongoing dialogue between
management and the Board regarding our
current and evolving risk profile, enabling
strategic and financial decisions to be
made with greater insight and confidence.
Risk taxonomy
As part of its responsibilities under the
ERMF, the Board has formally recognised
a series of risks that are continuously
present in Funding Circle and which
can materially impact the achievement
of our objectives. These risks have been
organised under a consistent and simple
taxonomy with a hierarchy of risk
categories, which facilitates risk
management and oversight.
Board oversight
Risk governance Risk culture Risk appetite Three Lines
Risk taxonomy
Identification
Risk and control
self assessment
(‘‘RCSA’’)
Risk reporting
Policy governance
framework
Risk assessment
and management
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Risk assessment and management
A standard risk assessment framework is
used to evaluate risks at both the business
and product 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. Assurance on
the management of risk is provided by
the Three Lines model including the
Internal Audit function. We also execute
external annual controls assurance
reports for Term Loans (e.g. ISAE 3402)
certified by auditors.
To ensure risks remain within appetite,
we employ four types of risk responses:
l accept the risk as within appetite
and continue the activity as is;
l mitigate the risk as it is outside risk
appetite and take the necessary
mitigation actions such as
enhancing controls;
l avoid the existing activity/do not start
the proposed activity; or
l transfer risks to another party
(e.g. insurance) while continuing the
activity. This excludes the outsourcing
of activities to a third party as, in such
cases, we remain accountable for
managing the associated risks.
Risk and Control Self Assessment
(‘‘RCSA’’)
Risk evaluation is carried out at all levels
of the organisation, beginning with the
Board‑level strategic plan, and must be
performed by the individuals, teams,
and departments best placed to identify
and assess potential risks. The minimum
requirement is for the Risk and Control
Self Assessment (‘‘RCSA’’) process to be
conducted at least once annually. Risk
evaluation at Funding Circle includes
measuring risks in terms of impact and
probability, and assessing them on both
an inherent and residual basis and
evaluating the performance of key
controls for each risk.
Risk taxonomy review
Reviewed the inherent risk rating for each
risk in the taxonomy to determine materiality
of the impacts if the risk were to materialise
for the Company.
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A rigorous framework for compliance with Provision 29
Risk and control review
We created a Steering Committee to review
and evaluate material risks and their
corresponding controls.
Control mapping
Conducted a thorough evaluation of all the
material controls identified and managed via the
existing RCSA methodology.
Independent assurance
Established an assurance mechanism to provide
the Board with an independent validation of
controls effectiveness.
Compliance with changes in
the UK Corporate Governance
Code: Provision 29 Readiness
On 22 January 2024, the
Financial Reporting Council
updated the UK Corporate
Governance Code, which we
report against. A significant
change, Provision 29, now
requires the Board to declare the
effectiveness of material controls
at year end. This necessitates
a formal assurance strategy
from management to the Audit
Committee and Board, providing
comfort for this declaration.
This new requirement becomes
effective for our financial
reporting year starting 1 January
2026, and will be reflected in
the 2026 Annual Report. A
robust and well established
ERMF will allow us to develop
our programme of compliance
with the upcoming Provision 29
requirements. Work has been
underway to identify the
material risks and controls to the
Company, working with the
Chairs of the Risk and Audit
Committees and external
advisers, to enable the Board’s
effective monitoring of our risk
management and internal
control framework.
Management Risk Committee
The Management Risk Committee
provides oversight in assessing all
principal and other emerging risks. It
supports and 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.
Term Loans Risk Committee
The Term Loans Risk Committee
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
The FlexiPay Risk Committee 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 FlexiPay and Cashback
card products.
Technology Risk Committee
The focus of the Technology Risk
Committee 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.The Committee
is also responsible to monitor the
compliance with the Technology
Risk Management Policy.
Balance Sheet Valuation Committee
The Balance Sheet Valuation Committee
provides oversight of all balance sheet
items originated and managed by
Funding Circle, in line with the balance
sheet management objectives of
maximising returns, guarding against
risk and embedding and maintaining
a framework of guardrails, all whilst
ensuring the balance sheet is deployed
in support of the operating platform.
Funding Risk Committee
The Funding Risk Committee facilitates
and monitors the implementation of
effective management of funding risk
across the business. The Committee
is also responsible to monitor the
compliance with the Funding Risk
Policy. The Committee provides
strategic oversight and governance
for the Capital Markets team’s
business plan.
Disclosure
Committee
Risk Committee
Management Risk Committee
CASS Compliance
Sub-Committee
Supplier Risk
Sub-Committee
Financial Crime
Sub-Committee
Funding Circle Holdings plc Board
Nomination
Committee
Remuneration
Committee
Remuneration and
Incentive Committee
Audit Committee
Term Loans Risk
Committee
FlexiPay Risk
Committee
Technology Risk
Committee
Balance Sheet
Valuation Committee
Funding Risk
Committee
Risk management continued
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Funding Circle governance structure
Risk Sub-Committees
Management and
implementation
committees
Executive and
governance committee
Board governance and
Compliance
Principal risks and uncertainties
Risk trend key
Improving Stable Deteriorating
The Board confirms that throughout 2025 a robust assessment of the principal and
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 plan or build a sustainable, diversified and profitable business.
Risk appetite
We will make efficient use of our available resources to build a sustainable, diversified and profitable business that can
successfully adapt to environment and technological changes (in particular artificial intelligence (‘‘AI’’)), and respond adequately
to competition pressures.
Risk(s) and potential impact Key risk considerations and mitigation actions
Strategy execution
Risk that we are unable to effectively
deliver the strategy selected due to
inadequate investment, prioritisation,
organisational design or execution or
fails to monitor the achievements of
strategic objectives. This would result
in the business not meeting key
objectives, impacting our competitive
advantage.
The risk trend over the year
Macroeconomic instability persisted throughout the year and we continues to evolve
our product mix to ensure sufficient diversification to meet customer demand.
The Executive Committee and Senior Leadership team are responsible for the
execution of the defined strategy through regular planning, robust performance
monitoring, and market research and analysis.
Regular review and tracking through the development of Objective and Key Results
(‘‘OKRs’’) enable close assessment of progress against strategic plans. At least
annually, the Board has oversight of strategic risk and approves strategic business
plans.
Rapid advances in Gen AI technology and usage are both a risk and an opportunity.
By embedding a Gen AI strategy into our business operations and upskilling all
employees in AI fluency, we prepare ourselves for the opportunities and manage
the evolving challenges brought by Gen AI.
Environmental, social and governance risk
Environment, social and/or governance
events or circumstances could cause
an actual or potential material negative
impact on our financial performance or
reputation.
The risk trend over the year
We have further integrated climate‑related risks into the ERMF, having approved the
Climate Risk Management Framework.
The Board retains ultimate responsibility for providing the strategic focus, support,
and oversight for the implementation of the ESG strategy. The Board has delegated
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 Risk Committee is responsible for oversight of risk management related to ESG
risks, including climate‑related risks.
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Principal risks and uncertainties
continued
Funding and finance risk
Funding and finance risk relates to the potential for adverse impacts on the Group’s ability to source and maintain sufficient
capital to support the origination of SME financial products, and also the potential for adverse impacts on the Group’s financial
position, performance, or reputation arising from various sources, including inadequate liquidity, operational failures affecting
financial data, errors in accounting and reporting, deviations from strategic financial goals, and issues related to the balance
sheet structure and asset management.
Risk appetite
We will make efficient use of our balance sheet, optimise and diversify funding and liquidity sources to enable a balanced
funding strategy while limiting downside risk and maximising profits.
Risk(s) and potential impact Key risk considerations and mitigation actions
Funding risk
Risk that demand from borrowers for
credit cannot be met by institutional
investors providing the funding.
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.
The risk trend over the year
Our business model is to be a lending platform that efficiently matches the supply of
capital to the demand of SME borrowers.
Demand continued from institutional investors which demonstrated the trust funding
partners place in our risk management and operational processes. Returns to
investors remain robust and stable.
We continue to manage this risk through:
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 our 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 relevant risk management forums; and
l leveraging an experienced Capital Markets team for sales and transaction structuring.
We are closely monitoring the volatility within the Private Credit markets and are
confident in our ability to respond to higher scrutiny from investors. Our processes are
well established and annually tested through multiple external audits.
Corporate liquidity
The risk that balance sheet funded
investments lose value or cannot be
exited at viable prices, and that liabilities
cannot be met timely or cost effectively.
The risk trend over the year
Funding for FlexiPay and Cashback card continued on balance sheet, with senior
financing from Citi. Both products continued to perform in line with 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.
We continue to manage this risk through:
l setting clear guardrails for our 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.
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Regulatory, reputation and conduct risk
Regulatory, reputation and conduct risk relates to activities that detract from our 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. Legal Risk is also included within this principal risk, which includes, but is not limited to,
exposure to fines, penalties, or punitive damages resulting from supervisory actions, as well as private settlements.
Risk appetite
We will not engage in activities that detract from our 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(s) and potential impact Key risk considerations and mitigation actions
Conduct risk
Failure to satisfactorily deliver
fair customer outcomes leading
to regulatory censure, and
reputation damage.
The risk trend over the year
Enabling our customers to achieve positive outcomes is at the core of our business.
We maintain robust product design and governance processes that assess and
monitor the expected product outcomes and behaviours, and respond appropriately
where indicators of harm are identified.
The Board and Senior Leadership team are focused on the right conduct culture
across the organisation, setting expectations for the broader business.
We further manage conduct risk through:
l complying with applicable laws and regulations, and ensuring positive customer
outcomes and these continue to be fundamental priorities for Funding Circle;
l embedding conduct rules, including training, across the Group to ensure processes
and activities are designed to deliver fair customer outcomes; and
l maintaining a dedicated Business Support team focused on assisting our
vulnerable customers.
Regulatory risk
The risk of changing regulations which
impact our operations, or our business
practices do not align to regulatory
expectation leading to customer
detriment, reputation damage and
regulatory censure.
The risk trend over the year
Our regulatory risk management focus remains highly engaged, monitoring key
developments that could influence our operating environment and risk profile:
l we maintain vigilance around policy shifts, and proactively engage with industry
bodies and policy makers, highlighting our platform’s 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; and
l we recognise that the adoption of Gen AI creates potential risks to ethical business
practices and compliance with certain legal and regulatory regimes and we established
governance structures to oversee the responsible use of such technologies.
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Principal risks and uncertainties
continued
Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events.
This definition includes operational failures resulting from the use of AI systems, such as flawed model outputs leading to poor business
decisions, process automation failures, inadequate ‘human-in-the-loop’ oversight, or fraud losses resulting from AI enabled attacks.
Risk appetite
Funding Circle will operate well managed processes with reliable performance and effective controls preventing significant
and non‑anticipated operational risk losses.
Risk(s) and potential impact Key risk considerations and mitigation actions
Process risk
Failure to originate and service loans in
line with our internal policies, investor
guidelines and third party loan
guarantees (e.g. BBB) may result in us
repurchasing loans from investors.
The risk of an 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.
The risk trend over the year
Our process risk profile remained stable over the past year, successfully maintaining
a steady risk environment while sustaining the growth and expansion of our multi‑
product offering.
We continue to automate key controls to reduce manual intervention and maintain
rigorous assurance testing to ensure control effectiveness.
Risk Committees review Key Risk Indicators (‘‘KRIs’’) as a standing priority. We also
ensure that operational errors are reported, reviewed, and resolved expeditiously to
minimise impact.
To address external dependencies and third party risks, we perform comprehensive
supplier due diligence during onboarding and are consistently working towards
enhancing ongoing performance monitoring.
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.
Fraud risk
Fraud risk is the threat of external
unauthorised activities, including fraud
committed by borrowers, investors, or
related parties. Fraud risk also includes the
risk of internal fraud by employees against
the organisation, its customers, or third/
fourth parties for personal gain.
The risk trend over the year
The expansion of the our product suite has introduced a broader range of customer
behaviours. These have been proactively embedded into our existing anti‑financial
crime framework to ensure comprehensive coverage. In response to an evolving
external risk landscape, we maintain a continuous cycle of reviewing and monitoring
of our control design and effectiveness.
We actively manage financial crime risk through a structured approach that integrates
regulatory requirements directly into our day‑to‑day operations:
l we have adopted Board Level policies to address financial crime, and implemented
standards, procedures, and preventative and detective controls to operationalise
these requirements;
l we conduct ongoing risk assessments to evaluate financial crime risks and ensure
our approach is targeted and effective; and
l we maintain 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.
To combat external threats ranging from identity theft to account takeover, we employ
a risk‑based, multi‑layered defence framework:
l all applications are rigorously assessed against high risk indicators from a variety
of crime prevention tools, including the National Fraud Database;
l advanced biometric facial verification employed at application stage and
multi‑factor authentication (‘‘MFA’’) for account access;
l continuously monitor fraud trends and adjust our controls to address evolving
threats, including AI attacks; and
l deliver ongoing fraud prevention guidance to borrowers and employees.
Our internal fraud controls are designed around the principles of restricted access,
oversight, and the elimination of single‑point failures. Role‑Based Access Control
(‘‘RBAC’’) access rights are strictly aligned with specific job responsibilities to prevent
unauthorised activity.
Our People team also serves as the first line of defence against internal threats by
conducting exhaustive pre‑employment screening. Candidates undergo global
education, employment, criminal, ID, and sanction & enforcement checks. We also
conduct UK specific verification including UK credit and address checks prior to
employee onboarding.
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Risk(s) and potential impact Key risk considerations and mitigation actions
Change risk
The risk arising from the inability
to manage business changes in a
timely and controlled manner. This
includes large and complex change
programmes as well as small and
incremental enhancements,
including product changes.
The risk trend over the year
To maintain operational stability during periods of transformation, we utilise a
structured change management programme for all major initiatives. This framework is
specifically applied to changes that impact multiple teams or require cross‑functional
effort.
Our approach to managing change risk focuses on rigorous assessment and expert
execution. We utilise a team of expert project managers dedicated to overseeing
changes. This ensures that transitions are managed in a controlled environment,
facilitating effective and timely delivery.
People risk
Failure to plan appropriately may lead
to loss of subject matter expertise
and may have a detrimental impact
to business resilience.
Employees do not have the right
level of training and skills to match
job requirements leading to poor
deliverable outcomes. Includes
key person reliance.
The risk trend over the year
We maintain strong capabilities within our Talent Acquisition team to ensure capability
of managing hiring needs.
We conduct ongoing reviews of our employee proposition and reward packages.
This includes compensation benchmarking and the evaluation of individual benefits
to ensure our offering remains competitive in the market.
We utilise employee engagement surveys to identify both positive trends and areas
for improvement. We maintain comprehensive, regularly updated policies and
procedures addressing diversity, discrimination, wellbeing and pay. These provide
clear guidelines and expectations for all employee, supported by formal and informal
channels to manage and resolve concerns.
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Principal risks and uncertainties
continued
Credit risk
Credit risk is the risk of financial loss 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 the portfolio level in line with Funding Circle
management’s expectations, in terms of net loss rate, risk-adjusted rate of return and volatility through economic cycles. This
includes management of potential risks from AI and machine learning (‘‘ML’’) models integrated in the credit risk assessment.
Risk appetite
Whether or not Funding Circle owns any credit risk, credit risk resulting from our lending activities will be managed with the
utmost care and attention to deliver credit performance and returns in line with expectations.
Risk(s) and potential impact Key risk considerations and mitigation actions
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 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.
Such risks, unmitigated, could impair
Funding Circle’s capabilities to source
funding for new loans at reasonable
terms, and be adverse to the financial
performance of the Company.
The risk trend over the year
Our aim is for well‑balanced loan portfolios that generate positive returns for investors
through the economic cycle. Our portfolio remained resilient throughout the year and
we continue to utilise up‑to‑date data to adjust the risk appetite and underwriting
policies as needed.
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 performing credit
risk stress tests;
l implementing adequate procedures and controls for model risk (including the
independent validation and monitoring of credit scoring models);
l having adequately staffed and well trained Collections and Recoveries 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.
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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, user errors, and security vulnerabilities specific to AI systems.
Risk appetite
We will manage our technology, data, and security risks with effective controls preventing significant and non‑anticipated loss
of confidentiality, integrity and availability of systems and data.
Risk(s) and potential impact Key risk considerations and mitigation actions
Technology resilience
Failure of the technology platform could
have a material adverse impact on our
business, results of operations,
financial condition or prospects.
The risk trend over the year
Technology is central to our operations and we continue to make significant
investments in our technology platform to ensure it is resilient and scalable to support
business growth.
We continue to demonstrate high levels of operational resilience, maintaining a strong
track record of platform availability.
Cybersecurity
The risk of unauthorised access to IT
systems and data, including as a result
of a cyber attack, which threatens the
confidentiality, integrity, and availability
of data and/or systems.
The risk trend over the year
The external threat landscape is constantly evolving, including several high profile
cyber attacks this year, and we continuously monitor potential threats, as well as the
potential security implications of the proliferation of AI, to inform our priorities. We
continue to invest into our control environment and will conduct an ongoing review of
our controls and strategies.
We have formalised our response structure to any crisis, including that of a cyber
event, and established a clear Crisis Management Team (‘‘CMT’’), which defines the
governance pathway for critical decisions, including specific escalations to the Board.
Emerging risks
In 2026, the risk landscape is
characterised by a rapid acceleration of
technological change and heightened
global volatility. Our ERMF is designed to
proactively identify and mitigate these
emerging threats to ensure business
resilience and strategic continuity.
Identifying and managing emerging risks
In an increasingly volatile landscape, we
have continued to evolve our methodologies
for identifying, assessing, and monitoring
emerging risks. A proactive approach is
central to our resilience, ensuring that
we remain ahead of shifting global trends
rather than merely reacting to them.
Horizon scanning remains a foundational
pillar of our strategy, providing critical
insights into the changing risk environment
and allowing us to anticipate disruptions
before they materialise. To ensure these
risks are managed with consistency
and rigour throughout the year, they
are reviewed through our core
governance structures
Through this structured governance,
we ensure that emerging risks are not
viewed in isolation but are consistently
evaluated and addressed as a vital
component of our enterprise‑wide risk
management framework.
Economic and
Geopolitical Risk
Financial
instability
Trade/
supply
chains
Political/
social
risks
Exogenous risks
Climate
risk
Artificial
intelligence
Global
shocks
Cyber
security
risks
New technology
risks
Emerging
risks
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
67
Emerging risks continued
Identifying and managing emerging risks continued
Emerging risk 2026+ Outlook Risk management approach
New technology risk
l AI
l Cybersecurity
As 2026 marks a pivotal
year for widespread AI
integration, we face new
strategic and tactical
challenges spanning
distribution, customer
experience, fraud and
talent management.
Our Board‑led AI strategy and dedicated Gen AI Steering Committee
oversee the ethical and operational integration of AI. We have
embedded AI risk assessments directly into our ERM framework.
We anticipate that AI will supercharge social engineering, malware
creation, and impersonation campaigns. In response, technology
security remains a top priority, supported by robust crisis
management policies and incident preparation and incident
management expertise in house.
Throughout the year, we also aim to train our employee base to
ensure they are equipped with the knowledge and expertise to
recognise the opportunities of the risk of the AI and at the same
time implementing guardrails to ensure ethical use and mindful
dependency on the new technology.
Economic and
geopolitical risks
l Financial instability
l Disruptions in trade and
supply chains
l Political and social
fragmentation
The global economic outlook
for 2026 suggests modest
growth, yet significant
volatility persists due to
structural shifts in trade
and financial stability.
We recognise the high risk of asset price corrections, particularly
in tech and AI sectors and the potential for a private credit meltdown.
We maintain resilience through rigorous stress testing, healthy
cash buffers, and prudent underwriting.
With global trade growth forecast to slow sharply (~0.5%) due
to US tariffs and inventory unwinding, we are focusing on
portfolio diversification and continuous monitoring of supply
chain dependencies.
A global trend of public mistrust and geopolitical fragmentation
creates an unstable business environment.
Our approach focuses on fostering a strong DEI culture and
maintaining ongoing regulatory screening to navigate shifting
landscapes.
Exogenous risks
l Climate related risks/
global shocks (pandemics,
wars, etc.)
Climate and environmental
risks heightened regulatory
expectations and the
increasing frequency of
severe climate events
contribute to rising insurance
and damage costs.
We do recognise the first
order risk is highly
unpredictable; however, the
second order is likely in the
form of a hit to the economy.
Our dedicated ESG Committee leads our response through
scenario planning and climate‑specific stress testing, ensuring
our crisis management protocols are equipped for unpredictable
environmental shocks.
Overall we do maintain an adequately adaptable crisis
management programme along with periodic stress testing.
Principal risks and uncertainties
continued
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68
Viability and going concern statements
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 2028 constitutes an appropriate period over
which to perform the assessment as:
l it is within the time period that 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 12 to 15 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 lending 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 2026 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 stress 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 assets under
management (“AuM”);
l levels of repayments, prepayments, defaults and recoveries,
which drive movements in AuM;
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 or 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
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69
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 61 to 68. 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 £101 million of unrestricted cash
together with £94 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
Management prepared a severe but plausible short‑term
downside scenario, in which:
l further macroeconomic volatility continues through the
period with elevated inflation and interest rates reducing
originations as borrower demand for loans at higher interest
rates reduces and investor funding appetite reduces;
l a downside scenario is applied to Term Loans assets under
management resulting in reduced servicing fees;
l a downside scenario applied to the on‑balance‑sheet lines
of credit results in reduced net interest margins with higher
cost of funds; and
l other operational events occur, including impact on critical
suppliers, buyback of loans and lower corporate cash levels,
resulting in lost revenues and cash outlays.
In addition, in the medium term under a severe but plausible
downturn it is expected that originations are subdued with AuM
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.
Link 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 2027.
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 2025, the Group had net
assets of £228 million, together with unrestricted cash of
£101 million and £94 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.
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 2027. This covers 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 and going concern statements
continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
70
72 Chair’s introduction
73 Governance at a glance
74 Board of Directors
76 Corporate governance report
84 Report of the Nomination Committee
88 Joint Report of the Audit
and Risk Committees
94 Report of the ESG Committee
96 Directors’ remuneration report
112 Report of the Directors
115 Statement of Directors’
responsibilities in respect
of the financial statements
corporate
governance
Funding Circle Holdings plc | Annual Report and Accounts 2025
71
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Chair’s introduction
I am delighted to introduce Funding Circle’s
Corporate governance report for the
financial year ended 31 December 2025,
which is my first report as Chair of
Funding Circle.
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
2025 was a year of consolidation and
growth for the Group. It was also a year
of change for the Board. Key areas of the
Board’s focus included agreeing a new
Remuneration Policy for shareholder
approval in 2025, Board and senior
management succession planning, Group
strategy, risk management and controls
oversight (in particular Provision 29
readiness), and Committee governance
enhancements. We cover these updates
within the respective delegated
Committees’ reports later in this report.
Board succession
2025 was a year of significant change
for the Board, with the appointment of
myself as Chair, Tony Nicol as Chief
Financial Officer and Executive Director,
and Maeve Byrne and Richard Harvey
as Non-Executive Directors and Chairs
of the Audit Committee and Risk
Committee. The Board also said farewell
to Andrew Learoyd and Geeta Gopalan,
and our existing Non-Executive Director
Helen Beck was appointed Senior
Independent Director.
Ken Stannard
Chair
2025 was a year of
consolidation and
growth for the Group.
It was also a year of
change for the Board.”
resil ient
Maintaining
oversight during a period of change and growth
We also said goodbye to Lucy Vernall,
former Chief Legal Officer and Company
Secretary, after 11 years with Funding
Circle, succeeded by Sarah Whiteley
effective 1 January 2026. Sarah’s
biography can be found on page 75.
Our new Directors have completed a
thorough induction and have quickly
integrated into the Board’s culture,
already contributing a wealth of fresh
perspective and robust challenge to our
strategic and technical discussions.
Reflecting our commitment to robust
governance, we consistently evaluate the
Board’s composition to ensure that our
independence, diversity, and range of
experience stay aligned with the Group’s
strategic direction. Further insights into
our Board composition and focus areas
for 2026, including our approach to
diversity and independence, are set out
in the Nomination Committee Report.
Governance
Confirmation of how we have complied
with the 2024 Code for the year under
review is set out on page 80 (excluding
Provision 29, which will apply from FY
2026). Funding Circle is finalising the
procedures and framework for internal
control measures 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.
Ken Stannard
Chair
5 March 2026
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
72
Governance at a glance
Rolling three-year female
representation on the Board
2023 20252024
38%30% 38%
Board changes during 2025
January 2025
Ken Stannard was appointed as Non-Executive Director
and Chair Designate and Tony Nicol was appointed
as Chief Financial Officer.
May 2025
Andrew Learoyd retired as Board Chair and was
succeeded by Ken Stannard at the 2025 AGM.
July 2025
Helen Beck was appointed as Senior Independent Director.
June 2025
Maeve Byrne was appointed Non-Executive Director and
incoming Chair of the Audit Committee.
Geeta Gopalan (existing Audit Committee Chair and
Senior Independent Director) resigned from the Board.
August 2025
The Board approved the transitioning of the Audit and
Risk Committee into two separate Committees.
Richard Harvey was appointed as Non-Executive Director
and Risk Committee Chair.
Board gender balance
(as at 31 December 2025)
Male
Female
Board independence
(excluding Chair, as at
31 December 2025)
Executive Director
Independent Non-Executive Director
Non-independent Non-Executive Director
Board ethnicity
(as at 31 December 2025)
White
Board tenure
(as at 31 December 2025)
0–3 years
3–6 years
6+ years
38%
62%
100%
2
3
2
25%
25%
50%
Code principles
Please see below for details regarding the application of the principles of the Code.
Board leadership and
company purpose (A-E) Pages
Risk management 57 to 68
Our people and
engagement
26 to 29, page 76
Engaging our
stakeholders
45 to 48, page 76
Division of
responsibilities (F-I) Pages
Corporate governance
report
76 to 83
Composition,
succession and
evaluations (J-L) Pages
Report of the Nomination
Committee
84 to 87
Directors’ biographies 74 to 75
Board effectiveness
review
82
Audit, risk and internal
control (M-O) Pages
Corporate governance
report
76 to 83
Joint Report of the Audit
and Risk Committees
88 to 93
Risk management 57 to 68
Viability Statement 69 to 70
Remuneration (P-R) Pages
Directors’ remuneration
report
96 to 111
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
73
Board of Directors
Board Committees
A
Audit Committee
R
Remuneration
Committee
N
Nomination Committee
Ri
Risk Committee
E
ESG Committee
D
Market Disclosure
Committee
Committee Chair/
Interim Chair
4
1
7
5
2
8
6
3
9
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
74
7
Maeve Byrne
A
N
Ri
D
E
Non-Executive Director
Term of office: Maeve was appointed to the
Board as a Non-Executive Director in June 2025.
Independent: Yes.
Skills and experience: Maeve has 30 years’
experience within financial services, having held
senior executive roles at Royal Bank of Scotland
Group plc. Most recently, she was seconded as
Chief Financial Officer of the Non-Core division
of RBS. Prior to her executive roles, she was
a partner at KPMG. Maeve is a Chartered
Accountant and is a fellow of the Chartered
Institute of Accountants in Ireland. Maeve has
a BCom from University College Dublin.
External appointments: Maeve serves as
a Non-Executive Director at M-Kopa Holdings
Limited and LendInvest Plc (where she is
Chair of the Audit and Risk Committee).
8
Richard Harvey
Ri
A
N
R
Non-Executive Director
Term of office: Richard was appointed
to the Board as a Non-Executive Director
in August 2025.
Independent: Yes.
Skills and experience: Richard has over
30 years’ experience within financial services,
having held senior roles at HSBC, GE Money and
Barclays, most recently as Global Head of Retail
Banking Products at HSBC Holdings plc and
Chief Executive of GE Money (UK Unsecured).
Richard previously served as a Director on the
boards of GE Capital Bank UK and HSBC Bank
of Nevada. Richard has a BA in English
Literature from the University of Bristol.
External appointments: Richard is currently
Non-Executive Director at both the Financial
Services Compensation Scheme and the UK
Money and Pensions Service, an arm’s length
body of the DWP. In addition, Richard is a
Trustee Director of Citizen Advice (Runnymede
and Spelthorne).
1
Ken Stannard
N
R
D
Chair
Term of office: Ken was appointed to the
Board as a Non-Executive Director in January
2025 and as Chair in May 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
also a Non-Executive Director of Verastar Ltd.
and Chair of its Remuneration Committee, and
Lead Director of Cepal Hellas Financial
Services S.A.
2
Lisa Jacobs
D
Chief Executive Officer
Term of office: Lisa was appointed to the Board
as Chief Executive Officer in 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 held roles
in NGOs in Tanzania and India. Lisa holds
a MA in Philosophy, Politics and Economics
from the University of Oxford.
External appointments: None.
3
Tony Nicol
D
Chief Financial Officer
Term of office: Tony was appointed to the Board
as Chief Financial Officer in January 2025.
Independent: No.
Skills and experience: Tony joined Funding
Circle in 2018 as Director of Finance. 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
Helen Beck
R
N
A
Ri
E
Senior Independent Director
Term of office: Helen was appointed to the
Board as a Non-Executive Director in June
2021. Helen is the Workforce Engagement
Non-Executive Director. Helen was appointed
as Senior Independent Director in July 2025.
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 St James’s Place
plc (where she is Chair of the Remuneration
Committee), as Non-Executive Director of
Hampshire Trust Bank plc (where she is
Chair of the Remuneration Committee), and as
Non-Executive Director of Picton Property
Income Limited (where she is Chair of the
Remuneration Committee). Helen is an
independent adviser for the Wellcome
Foundation’s Remuneration Sub-Committee,
and an independent member of the
Remuneration Committee for The British
Olympic Association.
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.
9
Sarah Whiteley
D
Chief Legal Officer, Company Secretary
Term of office: Sarah was appointed
Company Secretary in January 2026.
Independent: Not applicable.
Skills and experience: Sarah has over
20 years’ experience advising listed and
private equity-backed financial services
firms across Europe and the US. Prior to
joining Funding Circle, Sarah was Group
General Counsel and Company Secretary of
Cabot Credit Management, Non-Executive
Director of the Credit Services Association
and previously in private practice at Clyde
& Co. Sarah has a Master of Laws from
King’s College, London.
External appointments: Sarah is
currently Non-Executive Director of the
Dame Vera Lynn Children’s Charity.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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75
This mission is underpinned by Funding Circle’s values and the
founding entrepreneurial spirit with which Funding Circle was
established. The Board embraces the Company’s 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 2 to 70.
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,
and 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 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 Workforce
Engagement Non-Executive Director, providing a vital
connection between the Board and our Circlers. In 2025, Helen
held two employee focus groups 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
the annual employee survey. Two ‘Meet the Board’ sessions
were held during the year, providing employees opportunities
to engage with, and ask questions to, the Non-Executive
Directors. Further information on how we engage with our
employees can be found on pages 26 to 29 and page 46.
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 2026.
Our workforce policies and practices are regularly reviewed by
the Board and its 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 Committee receives regular
whistleblowing updates. Further information can be found in
the Joint Report of the Audit and Risk Committees on pages 88
to 93.
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 45
to 48.
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. Details on our engagement with
shareholders who had significantly voted against certain
resolutions in the 2025 AGM can be found on page 114.
Board leadership
and Company purpose
Funding Circle’s mission is to build the place where small businesses
get the funding they need to win. When small businesses succeed, they
create jobs, support local communities and drive the economy forward.
Corporate governance report
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76
Board activities
The Board meets formally at least five 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 2025.
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 2025 is set
out below. In addition, some examples of key decisions taken
by the Board in 2025, in the context of its section 172(1) duties,
are set out on page 78. 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 2025. The attendance for the Committee
meetings is detailed in each of the Committee reports.
Director No. of meetings Attendance
Ken Stannard 8/8 100%
Lisa Jacobs 8/8 100%
Tony Nicol 8/8 100%
Helen Beck 8/8 100%
Hendrik Nelis
1
7/8 87.5%
Neil Rimer 8/8 100%
Andrew Learoyd
(Resigned 15 May 2025) 3/3 100%
Maeve Byrne
(Appointed 2 June 2025) 4/4 100%
Geeta Gopalan
(Resigned 18 June 2025) 4/4 100%
Richard Harvey
(Appointed 1 August 2025)
3/3 100%
1. Hendrik Nelis was unable to attend one Board meeting during the year due to
a pre-existing commitment. Prior to the meeting, he was fully briefed on all
agenda items and provided his views and comments to the Chair to ensure
they were incorporated into the Board’s discussions. He was also updated on
the meeting’s outcomes immediately thereafter.
Key topics discussed by the Board
l Group’s Half-year and Full-Year financial results
l KPIs and milestones review
l Annual budget approval and quarterly forecasts review
l Capital allocation framework review and approval of third
share buyback
l Funding model review
l Risk updates and macro and credit deep dives
l Committee updates and approval of separation of the Audit
and Risk Committees
l Internal evaluations of the Board and Committees
l Cybersecurity deep dive
l Review compliance with the Economic Crime and Corporate
Transparency Act 2023
l Review and approval of key Group policies
l Appointment of new Company Secretary
l Customers and market deep dive
l Approval of strategy for FY 2026 and medium-term plan
l Review and approval of product propositions including launch
of Short Term Loans
l Technology deep dive (including Gen AI)
l People and culture deep dive
l Shareholder engagement updates
l Workforce Engagement Non-Executive Director’s updates on
employee focus group feedback
l Board engagement with employees
l Borrower engagement updates
Governance, risk
and compliance
Culture and
engagement
Financial performance Strategy
Key stakeholders
Communities
Government
and regulators
Shareholders
Institutional
Investors
BorrowersCirclers
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77
Board leadership and Company purpose 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 45 to 48.
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 45. 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 Short
Term Loan product
and funding strategy
Borrowers
Institutional
investors
Circlers
Shareholders
Communities
During the year, the Board approved the launch of a new Short Term Loan (“STL”)
product. This decision was made to address a market gap for further flexible,
short-term loan products for UK small businesses that require more agile financing
as they navigate shifting economic cycles. Small businesses are the backbone of
the UK economy. The Board recognised that providing new finance opens up new
customer segments and helps support the preservation of local employment and
reinforces the economic stability of the communities in which our borrowers operate.
The Board specifically considered and approved the decision to fund these initial
originations via the Group’s balance sheet through to the end of 2025. The Board
recognised that to secure long-term, sustainable institutional funding, it is essential
to demonstrate the performance and credit resilience of the STL product with
‘real-world’ data. By temporarily utilising our own capital, we were able to provide
data for attracting a high-quality institutional investor at scale, which happened
in early 2026.
Initiation of third
share buyback
programme
and holding of
treasury shares
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. During 2024 and early 2025, a second share buyback
programme had been ongoing. At the time of the full-year results in March 2025, the
Company held significant distributable reserves of c.£291 million. In May 2025, upon
completion of the second buyback programme, the Board announced a third share
buyback programme up to £25 million, with the option for repurchased shares to be
cancelled or held in treasury to satisfy awards under the Company’s employee share
schemes. The Board concluded that the buyback represented the most disciplined
use of capital, balancing immediate shareholder returns with the long-term stability
of the Group. Additionally, a key factor in the decision to hold repurchased shares in
treasury was to have flexibility to satisfy future obligations under our employee share
schemes. The Board considers this vital for aligning employee interests with Group
performance and aiding long-term retention.
Appointment of new
Audit Committee
and Risk Committee
Chairs and approval
of change to
Board governance
framework
Borrowers
Institutional
investors
Shareholders
Government and
regulators
The decision to separate the former Audit and Risk Committee into two designated
Committees was driven by the growing complexity of our financial and risk environment
(including credit and cyber risk). Additionally, the appointment process proved
challenging to find a single Non-Executive Director with the appropriate depth
of expertise to simultaneously oversee both complex audit matters and the evolving
risk landscape. Consequently, the Board decided to appoint two highly specialised
Non-Executive Directors and formally separate the Committees.
While the Risk function focuses on the technical resilience of the loan book, alongside
broader business risk, the Audit function provides independent assurance that our
lending practices remain transparent and compliant with the evolving regulatory
landscape, alongside broader audit matters. This dual-layered approach ensures
that as we scale new products, we do so without compromising the ethical standards
that our stakeholders expect of Funding Circle.
Additionally, this enhanced oversight provides institutional investors with the
confidence that our credit risk appetite is monitored with granular precision, ensuring
the long-term stability and reliability of our funding partnerships.
Corporate governance report
continued
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78
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 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 60.
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.
Risk
Committee
Audit
Committee
Board
Market
Disclosure
Committee
Remuneration
Committee
ESG
Committee
Nomination
Committee
Chief Executive Officer
Executive Committee (ExCo)
Executive and Governance Committees, and Management and Implementation Committees
(see Risk Committees structure on page 60)
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 six Board Committees: Audit, 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. 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
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Composition, succession
and evaluations
Board composition and succession
The Nomination Committee reviews the structure, size and
composition of the Board to maintain and develop a robust
succession plan for the Board and ExCo.
As noted under Governance at a glance on page 73, there
have been a number of changes to the Board during 2025 and
up to the date of this report. One of the Board’s 2025 priorities
was to refresh its composition to ensure it had the appropriate
skills, experience and knowledge to support the Company’s
continued execution of its simplified business strategy. The
Board’s Nomination Committee 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 recommending the appointment
of new Directors, having oversight of Board induction processes
and considering the results of the Board effectiveness review.
At the 2025 AGM, Andrew Learoyd retired from the Board after
a nine-year term as Chair. Geeta Gopalan also retired from the
Board in June 2025 after a seven-year term as Non-Executive
Director, Chair of the Audit Committee and Senior Independent
Director. Ken Stannard and Tony Nicol joined the Board as Chair
Designate and CFO respectively on 1 January 2025. There were
two further independent Non-Executive Director appointments
during the year. Maeve Byrne joined on 2 June 2025 and was
subsequently appointed as Chair of the newly reconstituted
Audit Committee and Richard Harvey joined on 1 August 2025
and was appointed as Chair of the newly reconstituted Risk
Committee. More details on how the Nomination Committee
led these appointment processes are noted in its Committee
Report on pages 84 to 87.
Board skills
The Nomination Committee uses a skills and experience
matrix to regularly review the expertise of the Board and its
Committees, as well as considering each Director’s skills
and experience, length of service and time commitment.
The Board’s skills matrix can be found below.
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. We are reporting against the 2024
Code, except for Provision 29, which we will report
on in 2026.
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. The Company was compliant with all the
provisions of the Code, except for Provision 11.
During 2025, the Board did not comply with Provision 11
regarding Board independence. Following the various
Board changes during the year (as noted on page 73),
our composition (excluding the Chair) consisted
of five Non-Executive Directors, two of whom were
non-independent, shareholder-representative Directors.
The Board considers that these non-independent Directors
provide vital alignment with our long-term investors and
contribute deep sector expertise that supports our strategic
goals. Despite the current lack of a formal majority of
independent Directors, the Board maintains a culture
of open challenge, ensuring that no single individual
or small group dominates the Board’s decision making.
Corporate governance report
continued
Board skills
(as at 1 January 2026)
FS/fintech
Technology (future oriented)
Product innovation (digital focus)
Risk management (including regulation, cyber)
Unsecured credit/lending (data intensive)
Customer focus (experience & marketing)
Commercial/strategic
Transformational change management
Remuneration/people
Core skill: Represents a primary area of professional expertise where the Director
possesses a deep, expert-level capability.
Supplemental skill: Represents a strong functional proficiency gained through
regular Board-level exposure and practical experience, though it is not the Director’s
primary specialisation.
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Board induction process
An effective induction programme is integral to a director’s
ability to quickly thrive in their role and provide the
‘constructive challenge’ necessary for a high-growth fintech.
Upon appointment, each Director receives a comprehensive,
formal induction tailored to their individual experience and
the specific requirements of their Committee leadership.
The induction is designed to enable new Directors to familiarise
themselves with our business operations, risk and governance
arrangements. It includes briefings on industry and regulatory
matters, our strategy and business model, risk management
and risk appetite, and meetings with senior management in key
areas of the business.
These are supplemented by induction materials such as recent
Board papers and minutes, organisational structure charts,
governance matters and relevant policies.
New Directors also meet our external auditors, brokers and
advisers, and attend a presentation from the Company Secretarial
team and, when applicable, external legal counsel on the roles
and responsibilities of a UK-listed company director.
Details of the Chair’s induction are published in the 2024
Annual Report.
In addition to the above, bespoke features of their induction
programme included:
Strategic and operational: Beyond briefings on our 2025
strategy, Maeve and Richard spent time with our Chief
Technology Officer and Credit Risk team. This ensured
a ‘bottom-up’ understanding of the Group’s proprietary
underwriting model and how its statistical approach to risk
underpins its risk appetite.
During 2025, we welcomed Maeve Byrne and
Richard Harvey as Non-Executive Directors and
Chairs of the Audit and Risk Committees respectively.
Given the specialised nature of these roles within a
regulated environment, their inductions were bespoke,
focusing on the intersection of data-led credit analytics,
financial resilience and culture.
Reflecting on my first six months, the induction
process has confirmed that our strategy is built
on a culture of high-integrity behaviour, robust
internal controls, and a data-led approach that
never loses sight of our role as a responsible
SME lender. It is the transparency in our financial
reporting and the discipline of our proprietary
systems that ensure we remain accountable to
our stakeholders while delivering the agility
small businesses need to thrive.”
Maeve Byrne
Audit Chair
Six months in, I have developed confidence
in the ability of the team to balance growth
with appropriate oversight. Dialogue with the
teams has demonstrated to me how practical
through the credit cycle experience coupled
with disciplined data-led underwriting underpins
our strategic resilience. I have also been pleased
to note, in my early interactions, both an open
culture of risk-awareness and a clear mission
to support the growth of UK SMEs.”
Richard Harvey
Risk Chair
Culture and engagement: To ensure a well-rounded induction,
Maeve and Richard prioritised getting to know the people behind
the platform. Through an informal ‘Meet the Board’ All-Hands
Q&A and a Senior Leadership breakfast, they engaged directly
with employees in an open, unscripted environment.
To ensure a seamless transition of Committee leadership,
Maeve and Richard also held one-on-one deep dives with:
Audit focus: Lead External Audit Partner, Head of Internal
Audit and the CFO and wider members of the Finance team
to review accounting judgements, the control environment,
and to better understand FlexiPay’s ECL methodology.
Risk focus: CRO and Head of Compliance to analyse the
Group’s Risk Appetite Statement and ERMF; Chief Credit
Officer to better understand the Group’s underwriting model
and data lineage; and Chief Financial Officer to review the
Group’s funding strategy and risk.
New Director perspectives: The first six months
Onboarding our new
Committee Chairs
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81
Board effectiveness review
The Board takes its continuous improvement and development very seriously and, at the end of 2025, 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
Secretarial team worked
together to determine the
proposed scope and approach
of the questionnaire to be
circulated for completion.
Obtaining feedback
A 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.
2025 effectiveness review 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 2026, included:
l expanding the Board’s annual strategy review cycle to bi-annual sessions, providing the Board with greater opportunity
to evaluate near-term performance trends alongside long-term strategic evolution;
l scheduling regular updates on Gen AI/technology and cyber risk; and
l ensuring regular review of the Group’s capital allocation framework.
Progress against actions identified in 2024 effectiveness review
Set out below is the progress during 2025 against actions identified through the 2024 Board effectiveness review:
Action for 2025 Progress
Continuing to review Board succession plans and
performance, including appointing new Non-Executive
Directors with the appropriate skills required for the reduced
Board size, particularly audit and risk skills.
Maeve Byrne and Richard Harvey were appointed during
2025 which has addressed audit and risk succession planning
requirements, with further succession plans to continue
during 2026.
Reviewing and enhancing processes for Board oversight of
people and culture.
Consistent with prior years, a ‘People deep dive’ was
scheduled at the July 2025 Board meeting, which reviewed
the People strategy, capability assessment, and people/DEI
metrics. The Workforce Engagement Non-Executive Director
scheduled, and provided various updates to the Board on,
employee engagement sessions during the year. The Chief
People Officer also provided an update to the Board on the
results of the annual employee survey.
Increase Board’s employee engagement. The Board significantly increased its employee engagement
throughout the year by participating in various panel events
held at the Company’s All-Hands meetings and in celebration
of International Women’s Day, attending two designated
sessions with the Senior Leadership Team, and attending two
employee focus groups led by the Workforce Engagement
Non-Executive Director.
External evaluation
The Board discussed the value of an externally facilitated evaluation at length including the recommendation in Provision 21 of
the 2024 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 2026. An external evaluation is planned to take place during 2026.
Corporate governance report
continued
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82
The Board has delegated to the Audit Committee 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 Audit Committee’s role,
activities and relationship with the external auditors are on pages
88 to 93 of the Joint Report of the Audit and Risk Committees.
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 Joint Report of
the Audit and Risk Committees on pages 92 to 93.
The Board delegates responsibility for ensuring the integrity
of the financial and narrative statements to the Audit
Committee. Further detail can be found on pages 88 to 93.
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 117 to 123.
Enhancing governance oversight
With effect from 1 August 2025, the Board approved
transitioning the Audit and Risk Committee back out into two
separate 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
Risk Committee. The Risk Committee 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.
The Internal Audit function provides an independent and
objective assessment to the Risk Committee on the robustness
of the ERMF and the appropriateness and effectiveness of
internal controls. The Risk Committee and Audit Committee
provide regular updates to the Board on their review of the
Group’s risk management and internal control systems as
discussed in their Committee meetings.
During the year, the Board, supported by the Risk Committee,
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
management section and in the Joint Report Audit and Risk
Committees. These 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 Risk Committee.
Further details on the above are outlined in the Risk
management section on pages 57 to 60 and the Joint Report of
the Audit and Risk Committees on pages 88 to 93.
Audit, risk and inte rnal control
Provision 29 readiness and material controls Board training and risk oversight
In preparation for Provision 29 of the Code coming into
effect in 2026, the Company initiated a robust review
of its material risks and associated controls, leveraging
our existing ERMF and risk taxonomy as the foundation.
This ensured that the identification of material financial,
operational, technological, compliance and reporting
controls remained deeply integrated and consistent with
the Group’s established approach to risk management.
This initiative was led by the Management SteerCo.
The framework underwent a formal review and challenge
by the Risk Committee to assess its integrity and design
effectiveness before being recommended to the
Audit Committee and subsequently approved by
the Board in December 2025.
Throughout 2026, the Group will continue its
scheduled programme of testing and monitoring
of these material controls, ensuring their ongoing
operational effectiveness in support of the Board’s
inaugural declaration at the 2026 year-end.
Continuous professional development for the Board is
facilitated through a combination of technical regulatory
updates, facilitated workshops on specialised topics,
and individualised induction and training plans tailored
to each Director’s specific Committee responsibilities.
During the year, the Board participated in several
dedicated sessions to deepen its oversight of the
Group’s key risk areas, including:
l credit risk;
l cyber and data security;
l Provision 29 material controls review; and
l climate risk and reporting.
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83
On behalf of the Board, I am
pleased to present the Nomination
Committee Report for the year
ended 31 December 2025.
This has been a period of significant
evolution for our Board. Following the
retirement of our long-standing Chair,
Andrew Learoyd, and our Senior
Independent Director and Audit
Committee Chair, Geeta Gopalan,
the Committee has been focused on
a structured Board refresh. We would like
to thank both Andrew and Geeta for their
exceptional service and leadership.
The Committee met five times during
2025, with a primary focus on Board
succession. While we remain committed
to enhancing Board diversity and
independence, we must balance these
objectives with the need for specialised
expertise essential to a fast-growing
fintech environment. Following our
previous announcement last year
regarding Neil Rimer’s planned transition
to retirement towards the end of 2025,
the Board has recommended extending
his tenure to allow for a deliberate and
thorough search for his successor.
This ensures the right skills match
for the Group’s next phase of growth
while maintaining continuity. Where our
current composition departs from the
2024 UK Corporate Governance Code,
we have provided a clear explanation to
demonstrate why our approach is in the
best interests of Funding Circle and its
stakeholders 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 consider the appropriate skills and
expertise to match the Company’s
strategic direction. Details of the Board’s
skills are outlined on page 80.
Board appointments
In addition to my appointment as
Non-Executive Director on 1 January 2025,
Tony Nicol also joined the Board as CFO
and Executive Director. On 15 May 2025,
I was appointed as Chair after the
resignation of Andrew Learoyd.
Subsequently, Geeta Gopalan resigned
on 18 June 2025 as Chair of the Audit and
Risk Committee and Senior Independent
Director. Maeve Byrne was appointed as
Non-Executive Director on 2 June 2025
and subsequently became Chair of the
Audit and Risk Committee (later
reconstituted as the Audit Committee)
on 18 June 2025. Helen Beck was
appointed as Senior Independent Director
on 3 July 2025. Richard Harvey was
appointed as Non-Executive Director
and Chair of the newly constituted Risk
Committee on 1 August 2025.
Report of the NominationCommittee
Ken Stannard
Chair
This has been a period
ofsignificant evolution
for our Board.”
Members and attendance
Member Meetings Attendance
Ken Stannard 5/5 100%
Helen Beck 5/5 100%
Maeve Byrne
(Appointed on 2 June 2025)
1/1 100%
Richard Harvey
(Appointed on 1 August 2025)
1/1 100%
Andrew Learoyd
(Resigned 15 May 2025)
3/3 100%
Geeta Gopalan
(Resigned 18 June 2025)
2/3 66%
2025 Committee activity
l An overwhelming majority of the Committee’s
work during the year related to the extensive
search and recruitment processes for the new
Audit Committee and Risk Committee Chairs.
l Recommended refresh to Board Committees’
composition and the separation of the Risk
and Audit Committees.
l Recommended new Senior Independent
Director appointment.
l Reviewed Board and senior management succession
plans, including the Board’s skills matrix.
l Reviewed Director conflicts and NED time commitment
and recommended Directors to stand for re-election
at the AGM.
The Committee’s focus for 2026
l Drive forward the process of continued succession
planning for the Board and increase the Board’s
independence and diversity.
The Committee’s role and key
responsibilities are defined in its
Terms of Reference which can be
found on our website
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84
Board diversity
The Committee recognises that diversity, in its broadest sense,
is a strategic imperative for a high-performing Board. Our
approach is guided by the recommendations of the Parker
Review on ethnic diversity and the FTSE Women Leaders
Review on gender representation, alongside the core principles
of the UK Corporate Governance Code. These frameworks
are integrated into our Board Diversity Policy (available on
our website), which governs our approach to inclusion across
the Board, its Committees, the Executive Committee, and
their direct reports.
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 29. We are pleased to have maintained representation
of women at the ExCo and direct report level at 43% under the
FTSE Women Leaders Review (2024: 43%) and to have also
achieved the Women in Finance Charter’s target for senior
leadership (defined as ExCo and the two layers below).
The Committee considers this a stable platform as the Group
continues to evolve its initiatives, some of which include our
female empowerment and senior leader development
programmes and reverse mentoring, to drive towards even
greater representation in the future. 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 for parents returning to work).
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 we recognise it does not currently meet the minimum 40% female
representation on the Board, this is offset by two female Directors in senior positions, being CEO and SID roles, which is above
the FCA’s requirement.
Following a recent change in our Board composition, we do not currently meet the target of having at least one Director from
an ethnic minority background. As a fintech-focused organisation with a lean Board structure, we recognise that individual
departures can have a disproportionate impact on our diversity percentages. We operate in a highly competitive market for
Non-Executive Directors with specific digital and financial services expertise; however, we remain steadfast in our commitment
to the Parker Review’s and FCA’s targets. The Committee has mandated our search partners to prioritise a diverse longlist for
current vacancies, ensuring that ethnic representation is a core pillar of our long-term succession planning.
Gender representation in the Board and senior management – 31 December 2025
Number of
Board members
Percentage
of the Board
Progress
from
2024
Number of senior
positions on the
Board (CEO,
CFO, SID and
Chair)
Progress
from
2024
Number
in Executive
management
Percentage
of Executive
management
Progress
from
2024
Men 5 62% 2 5 71%
Women 3 38% 2 2 29%
Ethnicity representation in the Board and senior management – 31 December 2025
Number of
Board members
Percentage
of the Board
Progress
from
2 0 2 4
1
Number of senior
positions on the
Board (CEO,
CFO, SID and
Chair)
Progress
from
2024
Number
in Executive
management
Percentage
of Executive
management
Progress
from
2024
White British
or other White
(including minority-
White groups)
8 100% 4 6 86%
Asian/Asian British — — — — —
Other ethnic group — — — 1 14%
1. The reduction in ethnic representation on the Board is due to the change in our Board composition during the year.
2. The reduction in ethnic representation within Executive management is due to the resignation of one role during 2025, which has not yet been replaced.
Key
Improving No change Deteriorating
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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Process for the appointments of new Chairs
of the Audit and Risk Committees
Stage 1: Strategic review and composition analysis
The Committee conducted a comprehensive review of the Board’s skills matrix and succession plans
to replace the existing Audit and Risk Committee Chair. With the decision to separate the Audit and Risk
Committees, the Committee identified a specific requirement for a new Non-Executive Director with
a specialised risk background to lead the standalone Risk Committee, while ensuring the Audit
Committee remained under the leadership of a seasoned financial expert.
Stage 2: Search firm engagement and candidate identification
The Committee approved detailed role specifications for the two roles and appointed Teneo¹ to identify
suitable candidates from a diverse candidate pool in line with the Board Diversity Policy, focusing on
individuals with deep expertise in financial services risk management and regulatory compliance.
Stage 3: Shortlisting and preliminary interviews
Teneo identified a long list of high-calibre individuals, which the Committee narrowed down to a short list
based on objective criteria, including technical risk expertise and cultural alignment with Funding Circle’s
mission. These candidates underwent initial interviews with members of the Nomination Committee
and the CEO to assess their strategic fit and capability to lead the dedicated Committees.
Stage 4: Stakeholder engagement and final evaluation
Preferred candidates met with the remaining members of the Board and key Executive stakeholders,
including the Chief Risk Officer (“CRO”) and Chief Financial Officer (“CFO”). The Committee agreed
the preferred candidates based on the range of skills, experience and knowledge that complemented
those of the existing Board members and unanimously recommended the same to the Board.
Stage 5: Board approval and appointment
The Board considered the candidates on their merits and approved the appointment of Maeve Byrne as
Non-Executive Director effective 2 June 2025 (and Chair of the Audit Committee effective 18 June 2025)
and Richard Harvey as a Non-Executive Director and Chair of the Risk Committee effective 1 August 2025.
1. Teneo is an independent global advisory firm. Teneo’s People Advisory business (formerly Ridgeway Partners) has no other connection
to the Company or any individual Director. Teneo is a signatory to the Standard Voluntary Code of Conduct for Executive Search Firms and
is fully accredited by the FTSE Women Leaders Review for its commitment to gender diversity. In 2024, 50% of Teneo’s Non-Executive Director
appointments were female, and it continues to partner with the Board to ensure our recruitment processes remain inclusive and representative.
Report of the NominationCommittee
continued
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Director conflicts and independence
The Committee conducted its annual review of individual
Director conflict authorisation as recorded in the Conflicts
of Interest Register. Additionally, the Board considers conflicts
of interest at every meeting.
The Conflicts of Interest Register sets out any actual or
potential conflict of interest situations that a Director has
disclosed to the Board in line with their statutory duties.
When reviewing conflict authorisations, the Committee will
consider any other appointments held by the Director as well
as the findings of the Board effectiveness review. Following
the review, the Committee will recommend to the Board
whether any conflict authorisations remain appropriate.
In the current year, there were no conflict authorisations
to be approved by the Board.
The independence of the Non-Executive Directors is formally
reviewed annually by the Committee. Two of the Non-Executive
Directors are not independent due to their position as shareholder
representative Directors. The Committee and Board consider
that there are no circumstances that are likely to affect the
independence of the remaining Non-Executive Directors and
that they continue to demonstrate independence.
Time commitment
The expected time commitment of the Chair and Non-Executive
Directors is assessed, together with any existing external
appointments, during the recruitment process. Time commitment
is reviewed by the Committee on an annual basis and both the
Committee and Board continue to consider that all Directors
have sufficient time to undertake their roles effectively.
Board and Committee effectiveness
The Committee reviewed the 2025 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 82.
Progress on actions from 2024 Committee effectiveness review
Feedback from the 2024 effectiveness review noted that the
Committee needed to focus more on the Board’s succession
planning, and particularly the Chair succession planning,
which was actioned by the end of 2024. Five Committee
meetings took place during 2025, which focused on the
selection process and ultimate appointment of two additional
Non-Executive Directors.
2025 Committee effectiveness review
The Company Secretarial team facilitated an effectiveness
review of the Committee at the end of 2025. A comprehensive
questionnaire was distributed to all the Committee members
and the Chief People Officer, all of whom responded and
engaged well during the evaluation process.
Overall, scores were positive across all elements of the
questionnaire of the Committee’s effectiveness. There was
consistent commentary amongst all members that Board and
senior management succession planning should remain a key
priority for 2026 particularly in relation to increasing diversity.
Re-election
The Committee has recommended to the Board that all Directors
stand for election or re-election at the forthcoming AGM.
Senior management succession
The Committee’s responsibilities include keeping the Executive
leadership needs of the Group under review, with a view to
ensuring it continues to compete effectively in the market.
During the year, some members of the Committee participated
in the appointment process for a new Group Chief Legal Officer
and Company Secretary by meeting with candidates and
providing the CEO with feedback prior to the appointment
of Sarah Whiteley as Group Chief Legal Officer and Company
Secretary effective 1 January 2026.
Board succession, composition and the year ahead
As noted earlier in this report, there have been several changes
to our Board since the Annual General Meeting in 2025. 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 2026.
Ken Stannard
Chair of the Nomination Committee
5 March 2026
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Joint Report of the Audit and
RiskCommittees
Members and attendance
Member
Combined Audit and Risk
Committee meetings
(Pre-1 August 2025)
Audit
Committee
meetings
Risk
Committee
meetings Attendance
Maeve Byrne (Audit Chair)
(Appointed on 2 June 2025)
1/1 2/2 1/1 100%
Richard Harvey (Risk Chair)
(Appointed on 1 August 2025)
— 2/2 1/1 100%
Helen Beck 3/3 2/2 1/1 100%
Geeta Gopalan
(Resigned on 18 June 2025) 3/3 — — 100%
Both Committees’ roles
and key responsibilities
are defined in their
Terms of Reference
which can be found on
our website
On behalf of the Board, we are pleased
to present the Joint Report of the Audit
and Risk Committees for the year ended
31 December 2025. To enhance our
governance framework, we have
transitioned back to separate Audit and
Risk Committees following former Audit
and Risk Committee Chair, Geeta
Gopalan’s departure in June 2025,
which aligns with our Board succession
strategy. On behalf of the Committees,
we extend our thanks to Geeta for her
exceptional leadership and technical
expertise as former Audit and Risk
Committee Chair.
The Committees have navigated a period
of transition well. We continue to be
impressed by the depth of management’s
reporting and its proactive approach to
risk. We remain satisfied that our internal
control frameworks are not only robust,
but are evolving appropriately alongside
the business.
2025 key activities
Risk
l Appointing the Chair of the newly
separated Risk Committee.
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.
l Receiving updates on emerging risks
(including current regulatory-related
matters) and principal risks including
strategic, funding and finance, credit,
operational (including people), regulatory
and reputational, and technology risks
(including cyber and Gen AI), including
applying scrutiny to information security
and technology risk and receiving
updates on their mitigation plans.
l Reviewing risk assessments associated
with FlexiPay, Cashback card and Term
Loans, including the launch of Short
Term Loans as a new product.
l Reviewed and approved the Group’s
risk appetite and amendments to the
Enterprise Risk Management Framework,
including the review of, and update to,
a number of key risk policies to ensure
our approach keeps pace with the
changing risk landscape.
l Attending workshops on Provision 29
material controls preparedness and
credit risk and recommending
approach to the Audit Committee.
2025 key activities
Audit
l Appointing the new Chair of the newly
separated Audit Committee.
l Reviewing the integrity of the Group’s
half-year and full-year financial
statements and considering key
disclosure matters, including the going
concern and viability statements at
year end.
l Evaluated the quality, effectiveness
and independence of our internal and
external auditors.
l Attended deep-dive sessions with
management on updates to the proposed
modelling methodology for expected
credit loss impairment for FlexiPay.
l Challenging, monitoring and evaluating
the effectiveness of both financial
and non-financial controls in the Group,
including working in collaboration
with the Risk Committee on overseeing
Provision 29 materials controls
preparedness, and recommending
approach to the Board.
l Reviewing Internal Audit reports and
approving 2026 Internal Audit Plan.
l Reviewed approach to deferred tax
recognition (further detail on page 90).
l Reviewed letter from FRC and
management’s response (further
detail on page 90).
Maeve Byrne,
Chair of the Audit Committee
Richard Harvey
Chair of the Risk Committee
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2026 key priorities
Risk
l Continue to review the Group’s key and emerging risks,
paying close attention to the macro environment, fraud risk
and maintaining oversight of the business’s approach to
responsible lending to mitigate reputational risk.
l Increased focus on cyber risk and business resilience.
l As the Group continues to embrace new products and
increase automation, particularly with new technology
initiatives (including Gen AI), 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 Support the Audit Committee and Board with continued
oversight of the implementation of the Provision 29 material
controls attestation requirements.
2026 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 over new products and new features.
l In collaboration with the Risk Committee, support the Board
with continued oversight of the implementation of the
Provision 29 material controls attestation requirements.
Committee composition, skills and experience
The membership of the Audit 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 Audit 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. Members of the Risk
Committee have relevant risk management experience,
including Richard Harvey, who is a risk specialist.
The Audit Committee meets privately to discuss matters with
the external and internal auditors, which regularly attend all
meetings, without management present.
The Risk Committee Chair meets the CRO regularly to discuss
risk oversight matters.
Significant matters considered in relation to the financial statements
The Audit 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 Audit Committee during the year are set out below.
Reporting issue Audit 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.
The impact of the UK government budget
and ongoing global instability has continued
to weigh on SMEs. These factors have been
considered in the above assessments.
The Audit 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 61 to 68;
l assessing and reviewing the adherence to the risk appetite set by
the Audit 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 Audit 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.
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89
Reporting issue Audit Committee action
Expansion of shorter-term lending product
The Group holds SME loans at fair value
through profit and loss of £120.8 million, the
majority of which are related to the shorter-term
lending product.
The majority of the assets were sold in
January 2026 after the balance sheet date.
The Audit Committee received papers from management covering the
accounting treatment and financial statement disclosures related to the
shorter-term lending product and the subsequent sale after the balance
sheet date and concluded:
l the measurement of the product was at fair value through profit and loss
due to the intention to sell following a period of on-balance-sheet funding
as proof of concept;
l the valuation of the assets was appropriate using market-driven inputs
into the discount rate applied in a discounted cash flow methodology;
l the disclosures in relation to the sensitivity to estimation uncertainty from
discount rate and loss rate assumptions was clear and appropriate; and
l the subsequent events note detailing the sale of the assets after the
balance sheet date was clear and appropriate.
Having reviewed the disclosures and treatment, the Audit Committee
concluded that the application was correct and the disclosure was clear
and transparent in the 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 Audit 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.
Members of the Audit Committee attended deep-dive sessions with
management on updates to the proposed modelling methodology and
enhancements to the monitoring and governance processes as the
balances become more material.
The Audit Committee considered the disclosures within the Annual Report
and after due challenge concluded that the estimates were reasonable
and the disclosures were appropriate.
Deferred tax recognition
The UK business is in an underlying taxable profit
position for the year ended 31 December 2025, and
expected to be in subsequent years and consideration
was given as to whether a deferred tax asset should
be recognised as at 31 December 2025 in relation
to carried forward losses, having not recognised this
in previous years.
It was concluded that a deferred tax asset should
now be recognised as there is sufficient certainty
regarding the probability of sustained future taxable
profits and a deferred tax asset of £26.1 million
was recognised.
The Audit Committee reviewed a paper from management, which set
out evidence related to the decision to recognise a deferred tax asset along
with the assumptions taken from the Board approved medium-term plan
forecasts and probability weightings related to the probability of generating
those taxable profits. The Audit 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 concluded there was; and
l considered the number of forecast years taken into the deferred tax asset
calculation and the probability of generating the taxable profits in each
year from which losses would be applied.
It was determined that the decision to recognise a deferred tax asset at
31 December 2025 was appropriate, and the estimate of the deferred tax
asset recognised was reasonable.
The disclosures related to the deferred tax recognition were reviewed
and considered clear.
Financial Reporting Council (“FRC”) letter
The Group received a letter from the FRC requesting
clarifications related to the 2024 Annual Report and
Accounts along with certain other observations in
the appendices to the letter.
The Audit Committee reviewed the letter from the FRC and management’s
proposed responses and:
l concurred with management’s response and promptly replied to the FRC
providing the requested clarification; and
l reviewed the observations in the appendices and are satisfied these have
been implemented in the 2025 Annual Report and Accounts.
l The FRC were satisfied with the response provided.
Significant matters considered in relation to the financial statements continued
Joint Report of the Audit and
RiskCommittees continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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90
Reporting issue Audit 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 2025 Annual Report and Accounts,
when taken as a whole, is fair, balanced and
understandable. The Group uses APMs in its
reporting such as profit before tax (before
exceptional items) and unrestricted free cash
flow 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 with
the KPIs, financial review and glossary on pages
17, 50 and 187.
At the request of the Board, the Audit Committee has assessed the
information contained within the Annual Report, including 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 Audit Committee also discussed the contents
of the Annual Report with the external auditors.
In addition, the Audit 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 Audit 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
Audit Committee has concluded that, in its judgement, the 2025 Annual Report
and Accounts, when taken as a whole, is fair, balanced and understandable.
Risk management and internal controls
Principal and emerging risks
On 1 August 2025, we transitioned to separate Audit and Risk
Committees to ensure more focused risk governance. This split
enabled the Risk Committee to refine its annual agenda, providing
the dedicated time needed to monitor the Group’s risk profile. A key
priority for the Risk Committee remains overseeing the Group’s
adherence to the ERMF (detailed on page 58) and ensuring our
internal controls evolve alongside our business.
The Risk 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 Risk Committee when identifying an emerging
risk requiring immediate attention. During the year, the Risk
Committee also received updates regarding the following:
l reviewing the Group’s position against the deterioration
in private credit markets; and
l the CRO’s assessment of the 2026 and beyond emerging
risk landscape and setting the business risk management
priorities for those risks; specifically, mapping the Group’s
exposure against the global trends identified in the World
Economic Forum’s latest Global Risks Report.
The Risk Committee considers these and other risks that may
impact the Group’s strategy and operations and assesses its
aggregated risk profile, more details of which are in the
Principal risks and uncertainties section on pages 61 to 68.
Throughout 2026, the Risk Committee will also expand its
oversight of technology risk, with a particular focus on the
migration to scalable, growth-enabling infrastructure and
overseeing the development of a comprehensive policy
framework that aligns AI adoption to the Group’s risk appetite.
Review of effectiveness of internal controls and risk
management systems
During the year, to bring greater transparency to the assurance
the Audit Committee and Risk Committee receives and to gain
greater comfort over the Group’s management of risks, monitoring
of internal controls and the accuracy of reporting, the following
was reviewed by either the Audit Committee or Risk Committee:
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 senior
management, ensuring leadership-led accountability
and a strong risk management culture within 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 Internal Audit’s Plan and recommendations across strategic,
operational and compliance risk areas;
l annually, the financial crime risk assessments, including
fraud risk and AML/CTF risk;
l oversight of climate-related risks to ensure continued
alignment with the Group’s risk appetite, and reporting the
same to the ESG Committee;
l specific risk mitigation actions in relation to information
security risk and data risk;
l the 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, the Risk Committee conducted a focused
deep dive with the CRO and Chief Credit Officer into credit risk,
specifically examining portfolio performance and expected
credit losses (“ECL”). This formal oversight is complemented
by a continuous information flow, with monthly credit
performance briefings provided by the CRO.
The Risk Committee also reviewed an update on the evolving
financial crime landscape, including industry-wide enforcement
trends, and management’s proactive benchmarking self-assessment
of the Group’s financial crime controls. We are pleased to report
that this cycle of active monitoring and internal validation continues
to support the Group’s robust defence against financial crime.
Based on these activities, the Risk Committee confirmed to
the Audit Committee and to the Board its assessment that the
Group’s internal controls and risk management systems were
sufficiently robust and operating effectively.
Provision 29 preparedness
During the year, the Risk Committee engaged in a dedicated
workshop with the Material Controls Management Steering
Committee. This session was designed to review and challenge
management’s approach to the design and testing of the Group’s
material controls, ensuring the Group’s preparedness for the
inaugural Provision 29 attestation in 2026. Both the Risk and
Audit Committees reported back to the Board on this progress.
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External audit
Auditor independence and external audit fees
External auditors: PwC
Length of tenure: 11 years (appointed in 2015)
Lead audit partner: Heather Varley
Lead audit partner tenure: 2 years
Total audit fees payable to
auditors in the year: £1.0m
The Audit 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 Audit 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, and was successful in a competitive tender of external
audit services for FY 2024 conducted by the Committee.
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.
Non-audit fees
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
that requires Committee approval for non-audit services. This
policy is in line with the FRC’s Revised Ethical Standard 2024
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.
In 2025, £0.4 million was paid to PwC for non-audit and
audit-related services related to CASS reporting, ISAE 3402
controls assurance and half-year reporting. All non-audit fees
have been approved in accordance with the Non-Audit
Services Policy, with a summary of all new services being
provided at each Committee meeting.
The Audit 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 Audit Committee through
an effectiveness questionnaire distributed to management and
Audit 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 2025, 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
forecasts and probability weightings applied in the recognition
of the deferred tax asset in the year and the assessment of
indicators of impairment and consideration of impairment risk
related to the Parent Company investment in subsidiaries.
Joint Report of the Audit and
RiskCommittees continued
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92
Internal Audit
Through the year, the Audit Committee, challenged, approved
and monitored the FY 2025 Internal Audit Plan. The plan was
regularly assessed to ensure it remained focused on the
Group’s key risks, priorities and assurance requirements. All
proposed audit plan adjustments were considered, challenged
and approved by the Committee. Areas assessed by the
Internal Audit team during 2025 included:
l FlexiPay and Cashback business credit card billing process;
l Marketplace;
l financial crime and external fraud;
l third party risk management;
l underwriting;
l new product launch – Short Term Loan (STL); and
l product management process.
Three additional reviews from the FY 2025 plan: technology
performance, credit exposure management, Risk Management
Framework, will be executed in Q1 2026.
The Internal Audit Plan for 2026 was approved by the Committee
in December 2025 and aligns to areas of high inherent risk and
strategic, operational and regulatory priority, including:
l cybersecurity;
l data;
l new product launch – STL product enhancements;
l FlexiPay and Card Platform;
l Gen AI; and
l Provision 29.
The team also continued to validate and close open audit
issues raised in the previous years.
Internal Audit effectiveness review
An effectiveness review was conducted by the Audit
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
enhancements per the refreshed Audit and Risk Committees.
These will be appropriately progressed during 2026.
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 Group’s Code of Conduct. During the
year, the Audit Committee reviewed the adequacy and security
of the Group’s whistleblowing arrangements, which included
regular whistleblowing updates. The Committee also provides
whistleblowing updates to the Board where appropriate.
As an enhanced control to our whistleblowing processes, the
Group maintains an independent third party anonymous
reporting option for employees, which is regularly tested for
effectiveness. During 2025, there were no incidents reported
through any of the Group’s reporting channels.
Committee effectiveness
During the year, a review was undertaken of the effectiveness
of the Audit and Risk Committees. Overall, the results of the
effectiveness review were positive. Feedback on the meeting
cycles of the newly separated Committees 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. Both Committees agreed that Provision 29
readiness would be a key area of focus during 2026.
Maeve Byrne
Chair of the Audit Committee
5 March 2026
Richard Harvey
Chair of the Risk Committee
5 March 2026
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Report of the ESG Committee
Members and attendance
Member Meetings Attendance
Helen Beck (Interim Chair) 2/2 100%
Neil Rimer 1/2 50%
Maeve Byrne
(Appointed 2 June 2025)
1/1 100%
Andrew Learoyd
(Resigned 15 May 2025)
1/1 100%
On behalf of the Board, I am pleased to
present the ESG Committee’s Report for
the year ended 31 December 2025.
The Committee would like to thank its
former Chair, Andrew Learoyd, for his
leadership in chairing the ESG Committee
since its establishment in 2020.
The Committee met twice this year, in
accordance with its 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 2025 ESG Framework
goals were completed to its satisfaction,
and is comfortable with the level of
ambition set for 2026.
In 2025, the Company made good progress
in delivering against its ESG objectives,
taking into consideration how the business
is evolving, and ensuring our ambition
statements for each of our key pillars
– environmental, social impact, DEI and
governance – 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 Environmental, social and
governance section of our Strategic
Report from page 30 and the Climate and
environment section from page 32.
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 Circle In
event in October, spotlighting the vibrant
culture and values at Funding Circle.
In 2025, 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.
We are proud to have achieved our HM
Treasury’s Women in Finance Charter
pledge as of December 2025 (40% female
senior leadership), reflecting our
multi-year commitment to unbiased hiring
and promotion. While our reported gender
pay gap ratio in 2026, based on the
April 2025 “snapshot date”, compared
to 2025 (April 2024 “snapshot date”) has
increased, we assess our progress based
on the long-term downward trend of the
metric rather than a single year in isolation.
To ensure our underlying trajectory
remains
positive, we continue to invest
in strengthening
our recruitment practices
and initiatives like our Female Empowerment
Programme, which drives retention and
succession planning to ensure our
leadership remains representative of
our wider workforce.
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
Funding Circle’s 2025 Oxford Economics
impact report demonstrates the vitally
important economic and job-sustaining
value delivered through the Company’s
lending activity, as it continues to serve
UK SMEs’ finance needs.
The Committee’s role and key
responsibilities are defined in its
Terms of Reference, which can be
found on the Company’s website
Helen Beck
Interim Chair of the ESG Committee
In 2025, the Company
made good progress
in delivering against its
ESGobjectives.”
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We were pleased to renew our
partnerships with Hatch Enterprise for a
fourth year, to support underrepresented
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 that
Circler volunteering continues, with 99
impact days used in 2025 across a number
of great social and environmental causes.
Climate and the environment
The Company successfully completed
independent third party verification
(ISO 14064-1:2018) of its 2024 GHG
emissions data for all activities under its
operational control (excluding Scope 3
category 3.15). We achieved our interim
operational climate target and continue
to evolve our understanding of our wider
Scope 3 emissions, including financed
emissions data.
We were particularly pleased to support
a new investment commitment of £100k
across 2026 and 2027, for the Greenlee
Peatland Restoration Northumberland
National Park project.
We appreciate the potential challenges
and opportunities that a transition to
a lower-carbon future brings for the
Company, its customers and other
stakeholders. In 2025, the Committee
approved a set of internal Transition
Principles, the first step towards
developing a transition plan to support
Funding Circle’s ambition to reach net
zero by 2050, in line with the UK
Government’s target.
Governance and risk management
The Committee is pleased with the progress
made against our roadmap this year. We
continued to integrate climate risk into our
Enterprise Risk Management Framework
processes. Our disclosures are consistent
with the TCFD recommendations, and
we carried out an initial gap analysis
against draft UK Sustainability Reporting
Standards (“SRS”).
In 2025, training was provided to the
Committee and Executive management
members by our external sustainability
advisers. This provided an overview
of the changing external and regulatory
landscape, benchmarking analysis, and
views on priority focus areas for 2026.
I have been pleased to act as the Interim
Chair whilst we are still considering ways
of maintaining Board-level expertise on
ESG topics and look for a permanent Chair.
Additionally, I have continued with my 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
I then fed back to the Board.
Key activities in 2026
In 2026 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 continue to engage
transparently with our stakeholders,
and work towards preparing for UK SRS.
Our goals and roadmap for 2026 are
outlined in the ESG section on page 30.
Helen Beck
Interim Chair of the ESG Committee
5 March 2026
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Directors’ remuneration report
Annual Statement from the Chair
On behalf of the Board, I am pleased
to present the Directors’ Remuneration
Report for the year ended
31 December 2025.
2025 has been another year of strong
delivery for Funding Circle. Following
the strategic reshaping of the business
in 2024, the Group has successfully
executed against its medium-term plan,
delivering robust growth and profitability.
Performance and reward in 2025
The Group has outperformed expectations
for the year with revenue of £204.3 million
and profit before tax of £20.3 million, which
was ahead of market expectations. These
strong results reflect the outcome of the
Group’s strategic transformation and
the strength of Funding Circle’s platform,
brand and underlying technology and
data capabilities. The outperformance
was driven by two factors: continued
strong demand despite macroeconomic
conditions, and product innovation
opening up new customer segments
and use cases.
Reflecting performance, the 2025 annual
bonus outcomes for the Executive
Directors are 90% of the maximum
opportunity. The Committee believes
this payout fairly reflects the progress
made in both financial delivery and
strategic execution during the year, and
therefore determined that no discretion
was required. For Tony Nicol, 40% of
the bonus will be deferred into shares
as he is building up to his shareholding
requirement. With a shareholding of
c.300% of salary at year end (exceeding
the 250% of salary requirement), the
Committee exercised its discretion to
reduce deferral to 30% for Lisa Jacobs,
reflecting her strong shareholder alignment
and in line with our Remuneration Policy.
The 2023 Restricted Share Awards,
granted to Lisa Jacobs and Oliver White
(the former CFO) in March 2023, were
subject to performance underpins and
a three-year vesting period ending in
March 2026. The financial underpin
required average total income of at least
£130 million over the three-year period
(2023–2025). This target was exceeded,
with an actual outcome of £182.1 million.
The Committee also confirmed that all
qualitative underpins were met, ensuring
no material risk or reputational issues
occurred. Consequently, the Committee
determined that no discretion was
required, and the awards will vest in full.
Implementation of the new
Remuneration Policy
At the AGM in May 2025, shareholders
approved our new Directors’ Remuneration
Policy with c.98% of votes cast in favour.
I would like to thank our shareholders for
their strong support and engagement
during the consultation process.
This new Policy introduced the Funding
Circle Performance Share Plan (“FC PSP”),
replacing the previous Restricted Share
Plan. In May 2025, following the approval
of the Policy, we made the first PSP grants
under this new Policy to Lisa Jacobs and
Tony Nicol, which were 350% and 250%
of salary respectively. These awards are
subject to stretching performance
conditions based on Relative TSR and
Adjusted PBT, measured over three years.
Further details on the performance
conditions are set out in the Annual Report
on Remuneration on page 105.
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
2025 has been another
year of strong delivery for
Funding Circle.”
Members and attendance
Committees members Number of meetings attended
Helen Beck (Chair) 5/5
Ken Stannard 5/5
Richard Harvey
(Appointed 1 August 2025)
2/2
Andrew Learoyd
(Resigned 15 May 2025)
3/3
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Executive Director remuneration
arrangements for 2026
For the coming year, the Committee
intends to implement the Remuneration
Policy as follows.
CEO salary:
In last year’s report, we communicated
our intention to apply a phased increase
to the CEO’s salary, increasing her salary
from £424,350 to £450,000 in March 2025
(an increase of 6.0%) with a view to
moving to £475,000 effective March 2026.
In our discussions with major shareholders,
it was suggested that this phasing was
supported. Since the disclosure, the
Committee has undertaken a fresh
detailed review of the remuneration
package, taking into account the
exceptional performance delivered and
growth of Funding Circle under Lisa’s
leadership, in addition to relevant market
data as disclosed on page 110.
The Committee strongly believes that
a salary of £500,000 is more appropriate
for her tenure and calibre, and this increase
would remove the deficit that resulted from
Lisa waiving higher increases during a
period of cost control at Funding Circle.
While this represents an 11.1% increase –
higher than the 5.5% originally proposed
and exceeding the 3.5% average awarded
to the wider workforce – the Committee
considers this a necessary structural
“re-basing” to align her remuneration
with the market and reflects her significant
contribution to the Group.
CFO salary:
Tony Nicol was appointed as Chief
Financial Officer on 1 January 2025 with
a starting salary of £350,000. Consistent
with our policy on recruitment, this salary
was set at a prudent level for a newly
promoted Executive Director, with the
intention of reviewing it as he developed
into the role.
Over the past year, Tony has proven
himself to be highly effective in the role,
navigating a year of significant transition
and contributing to our strong financial
discipline. To reflect his development and
successful performance in the post, the
Committee has approved a salary increase
of 7.1% to £375,000. While this is above
the average increase awarded to the wider
workforce, it is broadly consistent with
the increase for those being promoted.
The Committee considers this increase
essential to align his remuneration more
closely with the market rate for the role
now that he has established himself
as CFO.
Annual bonus:
For 2026, the maximum bonus opportunity
remains at 150% of salary for the CEO and
100% for the CFO. These awards are tied
to performance measures weighted towards
the strategic priorities of growth and
profitability. Specifically, 70% of the bonus
is determined by financial measures –
split equally between Group revenue and
Group profit before tax “PBT” – while the
remaining 30% is based on strategic and
non-financial measures.
Consistent with our policy to ensure
long-term alignment with shareholders,
up to 40% of any bonus earned will be
deferred into shares for three years.
The specific level of deferral applied
will depend on the Executive Director’s
shareholding at the time of payment.
FC PSP:
In line with our policy, we intend to grant
awards under the FC PSP at 350% of
salary for the CEO and 250% for the CFO.
Performance measures are expected to
be the same as the 2025 award (Relative
TSR and PBT).
Remuneration arrangements for Circlers
In another significant year for the
business, I wish to thank all our Circlers
for their dedication and commitment over
the course of 2025. The Group annual
bonus for 2025 is being awarded at 138%
of target in aggregate, with payment being
based on similar financial measures as
used for the Executive Directors.
In 2025, we continued our Share
Incentive Plan, where Circlers buying
“partnership” shares in Funding Circle
receive two “matching” shares for every
“partnership” share purchased. We also
paid an increased bonus of up to £1,500
(up from £1,000) for junior Circlers in
December to reflect the performance
of the business.
The most significant change in 2025,
was to also include the Executive
Committee members in the FC PSP on a
similar basis as the Executive Directors.
This ensures that the most senior Circlers
are aligned on driving the performance
of the business over the long term.
The Committee receives regular updates
on overall pay and conditions in the
Group, and these are taken into account
when setting Executive Directors’
remuneration. As Workforce Engagement
Director, I also hold engagement
sessions with Circlers to understand
their views on remuneration, reward
and recognition and feed these back
into Committee discussions.
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. We were delighted with
the support received from shareholders
at the 2025 AGM and we hope to continue
to receive your support at our 2026 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
5 March 2026
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130.1%
At a glance: Remuneration outcome for 2025
The charts below show the potential 2025 remuneration opportunity and actual achievement.
Lisa Jacobs, CEO Tony Nicol, CFO
Minimum Minimum
On-target On-target
Maximum Maximum
2025 actual 2025 actual
2024 actual
473 369
1,252
544
1,587 719
1,520
1,348
684
0 500 1000 1500 2000 0 200 400 600 800
Salary Benefits Pension Bonus Restricted shares
2025 annual bonus outturn
The chart below shows the outcome of the 2025 annual bonus. A summary of overall business performance is on pages 49 to 56.
Performance measure Weighting
Threshold
0% payout
Target
50% payout
Maximum
100% payout
Outcome
(% of maximum)
Group revenue 35%
Actual £204.3m
100%
£160m £180m £200m
Group PBT 35%
Actual £20.3m
77%
£5m £15m £25m
Strategic/non-financial
(including FlexiPay)
30%
Performance of strategic/non-financial objectives exceeded
expectations, and with significant strategic value delivered in 2025.
See page 104 for further details.
94%
Outcome
(% of salary)
Total (CEO) 90% 135%
Total (CFO) 90% 90%
Payments for 2025 cover a time period of five years
Element
Maximum opportunity
for 2025
Awarded
for 2025 2025 2026 2027 2028 2029
Salary n/a CEO: £450k
CFO: £350k 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: 150% of salary
CFO: 100% of salary
135% of salary
90% of salary
70% paid in cash
60% paid in cash
30% deferred into shares for three years
40% deferred into shares for three years
FC PSP
(granted
20 May 2025)
350% of salary CEO: 350%
of salary
CFO: 250%
of salary
Three-year performance/vesting period
(performance conditions tested following completion
of performance period)
Post-vesting holding period of two
years
Shareholding guidelines for Executive Directors as at 31 December 2025
800%
600%
400%
200%
0%
Total
CEO (Lisa Jacobs) CFO (Tony Nicol)
297.4%
Guideline
Shareholding
(% of salary)
Unvested awards Unvested awards (not subject to performance)
Vested but unexercised Beneficially owned shares
Shareholding as a percentage of salary is based on the three-month
average share price to 31 December 2025 of 124.2 pence. Unvested
awards subject to performance conditions are not taken into account in
the assessment of the shareholding until such time as they vest.
Directors’ remuneration report
continued
Guideline
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Element of
Remuneration Policy Current Policy Implementation in 2026
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.
As of 1 March 2026, Executive Director salaries
are as follows:
l CEO: £500,000.
l CFO: £375,000.
Benefits and
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 pension 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:
• CEO: 150% of salary.
• Other Executive Directors: 100% of salary.
l Normally, at least 60% of the annual bonus will be based on financial
measures.
l Up to 40% of any bonus earned will be deferred into Funding Circle
shares and will cliff vest after three years. The deferral level is
dependent on the shareholding of individual Executive Directors.
A minimum level of deferral will always apply (e.g. 20%).
Maximum opportunities of:
l CEO: 150% of salary.
l CFO: 100% of salary.
70% of bonus based on financial measures,
30% strategic/ non-financial.
Up to 40% of any bonus earned will be deferred
into Funding Circle shares and will cliff vest after
three years. The deferral level is dependent on
the shareholding of individual Executive Directors.
A minimum level of deferral will always apply
(e.g. 20%).
FC PSP
l PSP. Grants of up to 350% of salary, with typical award sizes
of 350% for the CEO and 250% for the CFO.
l Awards will vest after three years subject to the achievement of
performance metrics. A post-vesting holding period of two years
will apply.
Maximum opportunities of:
l CEO: 350% of salary.
l CFO: 250% of salary.
Performance conditions:
l Relative TSR: 60%.
l PBT: 40%.
Awards will vest after three years subject to the
achievement of performance metrics. A post-
vesting holding period of two years will apply.
At a glance: Policy overview and implementation for 2026
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
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Summary of Directors’ Remuneration Policy
The table below summarises the operation and performance metrics for each of the
elements of remuneration set out in the Directors’ Remuneration Policy approved by
shareholders at the 2025 AGM. The full Policy can be found on pages 94 to 100 of the
2024 Annual Report.
Element of remuneration Operation
Executive Directors
Salary
Salaries are reviewed annually in March, with no prescribed maximum increase. Reviews take into account the external market,
individual role and experience, and the wider employee context. Increases are generally aligned with the workforce, though
higher increases may be awarded in specific circumstances such as a change in scope, development in role, or significant
change in Company size/complexity.
Benefits and
pensions
Executive Directors receive benefits in line with other UK employees, including private medical insurance and life assurance.
Pension contributions are capped at the level available to the wider workforce, currently 5% of salary, payable as a contribution
to the Company plan or as a cash allowance.
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.
Annual bonus
The maximum opportunity is 150% of salary for the CEO and 100% for the CFO. Performance is assessed annually against
financial (typically at least 60% weighting) and strategic/non-financial measures. 40% of any bonus earned is deferred into
shares for three years, although this deferral may be reduced if the Director has already met their shareholding requirement.
The Committee has the discretion to pay the annual bonus wholly in cash for the year of departure and, if relevant, for the
prior year in the event of loss of office. In the event a Director loses their office, the Committee reserves the right to exercise
its discretion to pay the annual bonus entirely in cash for both the year of departure and, if applicable, the preceding year.
Malus and clawback provisions apply.
FC Performance
Share Plan “PSP”
Awards are granted annually with a maximum opportunity of 350% of salary (typical grants are 350% for CEO and 250% for
CFO). Vesting occurs after three years subject to the achievement of stretching performance conditions (e.g., Relative TSR
and Adjusted PBT) and continued employment. Vested shares are subject to a further two-year holding period. Malus and
clawback provisions apply.
In-post shareholding
requirement
Executive Directors are required to build and maintain a shareholding equivalent to 250% of salary for the CEO and 200%
for other Executive Directors. This requirement should be met within five years of appointment.
Post-exit
shareholding
requirement
Executive Directors must normally retain shares equivalent to the lower of their in-post shareholding requirement (250%
of salary for CEO, 200% for others) or their actual holding on departure for a period of two years after ceasing employment.
This applies to shares vesting from incentive plans.
Non- Executive Directors
Fees
The Chair receives an all-inclusive fee determined by the Committee. Non-Executive Directors receive a basic fee determined
by the Board, with additional fees payable for additional duties such as acting as Senior Independent Director or chairing Board
Committees. Fees are reviewed periodically against market practice and time commitment.
Full details on the malus and clawback provisions, including the circumstances in which they can be used and the time period
over which they apply, can be found on page 96 of the 2024 Annual Report. The provisions were not used in the year under review.
Directors’ remuneration report
continued
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Annual Report on Remuneration
This part of the report sets out how the Remuneration Policy has been applied in 2025
and how the Committee intends to apply the Policy in 2026. This part of the report will
be subject to an advisory shareholder vote at the 2026 AGM.
Role of the Committee
The Committee’s primary role is to determine the remuneration of the Executive 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 the 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. During the year, for the period between Andrew
Learoyd stepping down and Richard Harvey being appointed the committee had two members, although no Committee meetings
took place and no decisions were taken. The Company Secretary acted as Secretary to the Committee.
Committee members Number of meetings attended
Helen Beck, Chair 5/5
Ken Stannard 5/5
Richard Harvey1 2/2
Andrew Learoyd2 3/3
1. Richard Harvey joined the Committee on 1 August 2025.
2. Andrew Learoyd stepped down from the Board at the Annual General Meeting in May 2025.
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.
2025 Committee workstreams
l Consulted with shareholders on the proposed Remuneration Policy ahead of its renewal at the 2025 AGM.
l Determined the payout of the Executive Directors’ 2024 annual bonus.
l Approved the payout of the 2024 annual bonus for Circlers.
l Approved the design of the 2025 annual bonus for Circlers and the equity plans.
l Set the 2025 annual bonus targets for Executive Directors.
l Set the 2025 FC PSP performance conditions and approved the grants for Executive Directors and Executive Committee members.
l Reviewed other variable pay plans in the Group.
l Approved reward decisions relating to members of the Executive Committee and reviewed Circler compensation.
2026 Committee priorities
l Approve the remuneration arrangements for the Executive Directors and Executive Committee members, including their equity
grants and 2025 bonus outcomes.
l Approve the design of the 2026 annual bonus for Circlers and the equity plans, and review other non-Group incentives such
as sales bonuses.
l Set the 2026 annual bonus targets, ensuring they align with Funding Circle’s strategy as well as its ESG priorities.
l Set the 2026 FC PSP performance conditions and approve the grants for Executive Directors and Executive Committee members.
l Continue to monitor remuneration practices across the Company as a whole, keeping abreast of current and evolving
market practice.
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Committee effectiveness
The Committee undertook an effectiveness review at the end of 2025, whereby each Committee member and, by invitation,
the Chief People Officer 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 2025. 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 and is a member of the Remuneration Consultants Group and a signatory to its Code of Conduct.
The fee paid to Alvarez & Marsal in 2025 in relation to advice provided to the Committee was £25,000 (excluding VAT),
which was based on time spent. Alvarez & Marsal provided 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
Ken Stannard 1 January 2025 1 January 2028 One month One month
Helen Beck 3 July 2024 3 July 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
Richard Harvey 1 August 2025 1 August 2028 One month One month
Maeve Byrne 2 June 2025 2 June 2028 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 2025 AGM
received the following votes from shareholders:
Number of votes
Remuneration Policy
(2025 AGM)
Annual Report on Remuneration
(2025 AGM)
Votes cast in favour 233,970,779 98.2% 238,136,993 100.0%
Votes cast against 4,181,355 1.8% 14,637 0.0%
Votes withheld 18,134 n/a 18,638 n/a
Total votes cast (excluding withheld) 238,152,134 100.0% 238,151,630 100.0%
Annual Report on Remuneration continued
Directors’ remuneration report
continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
102
Single total figure of remuneration (audited)
The following tables set out the aggregate emoluments earned by the Directors in the year ended 31 December 2025 and
2024 respectively.
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
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Executive Directors
Lisa Jacobs 446 423 5 5 22 21 602 480 445
3
419
4
1,520 1,348
473 449
1,047
899
Tony Nicol 350 n/a 2 n/a 17 n/a 315 n/a —
5
n/a 684 n/a 369 n/a 315 n/a
Non-Executive Directors
Andrew Learoyd
6
78 207 — — — — — — — — 78 207 78 207 — —
Ken Stannard
7
161 n/a — — — — — — — — 161 n/a 161 n/a — —
Geeta Gopalan
8
44 80 — — — — — — — — 44 80 44 80 — —
Helen Beck
9
80 70 — — — — — — — — 80 70 80 70 — —
Maeve Byrne
10
44 n/a — — — — — — — — 44 n/a 44 n/a — —
Richard Harvey
11
31 n/a — — — — — — — — 31 n/a 31 n/a — —
Hendrik Nelis
12
— — — — — — — — — — — — — — — —
Neil Rimer
12
— — — — — — — — — — — — — — — —
1. Taxable benefits for Executive Directors principally include private medical cover and life assurance cover and awards made under the Share Incentive Plan
(including matching shares). In each year, 2025 and 2024, Lisa Jacobs purchased £1,800 of Partnership Shares under the Share Incentive Plan and received
£3,600 on a 2:1 matching basis.
2. Executive Directors were eligible for a 5% of base salary pension contribution; £10,000 was paid into each of Lisa Jacobs and Tony Nicol’s Company pension
with the remainder paid as cash in lieu.
3. Shows the value of the vesting of the 2023 Restricted Share Award based on a three-month average share price to 31 December 2025 of 124.2 pence. This
award was granted on 30 March 2023, was based on a fixed number of shares and was worth 46.7% of salary for the CEO using a share price of 54.0 pence 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. The
proportion of the vested value that is attributable to share price growth is 56.5% of the value, or £251k for the CEO. The Remuneration Committee reviewed the
vesting outcome and is satisfied that the increase in share price reflects the underlying performance of the business over the period. Accordingly, the
Committee concluded that the vesting does not result in any “windfall gains” and did not exercise its discretion to reduce the award.
4. The value vesting of the 2022 Restricted Share Award has been updated to reflect the actual share price on the vesting date of 117.0 pence.
5. Tony Nicol was appointed to the Board on 1 January 2025. Consequently, he did not hold any long-term incentive awards granted as an Executive Director that
were eligible to vest in respect of the year ended 31 December 2025.
6. Andrew Learoyd stepped down from the Board at the Annual General Meeting in May 2025. The fees shown reflect the period from 1 January 2025 to the date
he stepped down.
7. Ken Stannard was appointed as Non-Executive Director and Chair Designate on 1 January 2025 and succeeded Andrew Learoyd as Chair of the Board following
the 2025 AGM. His fees include a pro-rated Non-Executive Director base fee until the AGM and the Chair fee thereafter.
8. Geeta Gopalan stepped down from the Board in June 2025. The fees shown reflect the period from 1 January 2025 to the date she stepped down.
9. Helen Beck was appointed as Senior Independent Director on 3 July 2025, succeeding Geeta Gopalan. The fees shown reflect her role as Remuneration
Committee Chair for the full year and the pro-rated Senior Independent Director fee from the date of her appointment.
10. Maeve Byrne was appointed to the Board on 2 June 2025. The fees shown reflect the period from her appointment date to 31 December 2025.
11. Richard Harvey was appointed to the Board on 1 August 2025. The fees shown reflect the period from his appointment date to 31 December 2025.
12. Hendrik Nelis and Neil Rimer are non-independent Non-Executive Directors and have waived their entitlement to a fee.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
103
2025 annual bonus (audited)
The maximum opportunities for 2025 were 150% of salary for the CEO and 100% of salary for the CFO. As announced in last
year’s Directors’ Remuneration Report, the weighting on financial measures was 70%, split equally between Group revenue
and Group PBT (pre-exceptionals). The remaining 30% on strategic/non-financial was based on delivering key 2025 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 Company 2025 guidance.
Structure of the 2025 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%) £160m £180m £200m £204.3m 100%
Group PBT (pre-exceptionals) (35%) £5m £15m £25m £20.3m 77%
Strategic/non-financial (30%) See below 94%
Total (% of maximum) 90%
Total (% of salary) 135% 90%
Final outcome (£k) 602 315
In this overall performance context, the outcome of the bonus assessment against the agreed targets was 90% of maximum.
The Committee considers this an appropriate reflection of the overall performance delivered for stakeholders, and therefore
no discretion was applied. Lisa Jacobs’ shareholding is currently 297% of salary, significantly above her shareholding guideline
of 250% of salary, therefore, in line with our Remuneration Policy, the Remuneration Committee has determined that 30% will
be deferred in shares with the remainder being paid in cash. 40% of Tony Nicol’s bonus payout will be deferred into shares
for three years as his current shareholding of 130% of salary is below our guideline given his recent appointment to the Board.
Strategic/non-financial measures
Category Details on objectives and performance
Strategy
Delivery of key
2025 strategic
objectives
l Expansion of product suite: Successfully launched the Short Term Loan “STL” product in Q2 2025,
surpassing growth targets and transitioning the product to a scalable platform funding model.
Additionally, launched Company cards capability and progressed digital wallet enablement.
l Customer experience and scaling: Scaled FlexiPay end of month balances above £200 million and
launched “Dual Product” capabilities. Maintained a sector-leading Net Promoter Score “NPS” of 79,
exceeding the goal of >75%.
l Profitability and growth: Delivered strong revenue growth of c.28% against cost growth of c.11%, driven
by efficiency improvements. Initiated strategic investments in technology, AI, and go-to-market strategy.
l Shareholder engagement: Hosted inaugural Capital Markets Day in June and successfully onboarded
five new major institutional investors.
Stewardship and
sustainability
Delivering business
goals in the right
way
l Risk management: All credit, technology, and data risk metrics remained within appetite, with technology
security maturity improving year on year. The Board approved a robust plan for Provision 29 reporting
preparedness.
l Culture and engagement: Achieved an all-time high employee engagement score of 74% (exceeding the
expectation of 65%) and an eNPS of 69%. Voluntary attrition remained low at c.19%.
l Diversity and inclusion: Successfully ran the third year of the Female Empowerment Programme and
increased Women in Senior Leadership to 39%. Launched new partnerships to support employee
wellbeing.
l ESG progress: Continued to evolve the climate strategy in line with emerging standards, focusing on
emissions targets and climate risk management. Continued to build on existing social partnerships,
including offering mental health support to SMEs.
The Remuneration Committee determined that as performance against strategic/non-financial objectives exceeded
expectations, and with significant strategic value delivered in 2025, that 94% of the strategic/non-financial element should pay
out. This has been a year of considerable progress for Funding Circle.
Restricted shares awarded in 2023 vesting in respect of 2025 (audited)
The 2023 Restricted Share Awards granted to Lisa Jacobs and Oliver White (former CFO) were based on a number of shares
that were fixed at the beginning of the 2021 Remuneration Policy. Awards of 358,177 and 269,306 shares were made to the CEO
Directors’ remuneration report
continued
Annual Report on Remuneration continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
104
and former CFO on 30 March 2023. This represented c.47% and c.24% of salary respectively, a reduction of approximately 65%
on the Policy levels at that time (being 133% of salary for the CEO and 100% for the former CFO). The awards were subject to
financial and qualitative underpins to safeguard against payment for failure.
l Financial underpin: The awards were subject to a financial underpin requiring average total income for the Group to be at
least £130 million over the three-year performance period (1 January 2023 to 31 December 2025). The actual average total
income achieved over the period was £182.1 million, significantly exceeding the threshold.
l Qualitative underpins: The Committee assessed whether there had been any serious breach of regulation, material reputational
damage, or gross misconduct during the period. The Committee confirmed that no such events occurred and that the qualitative
underpins were fully met.
Based on this assessment, the Committee determined that the vesting outcome is a fair reflection of the underlying performance
of the business and the value created for shareholders since the date of grant. In reaching this conclusion, the Committee
was satisfied that no windfall gains had arisen. Accordingly, the Committee determined that the awards should vest in full
on 30 March 2026 without the exercise of any downward discretion. The awards remain subject to a two-year post-vesting
holding period.
Pro-ration was applied to Oliver White’s award upon his departure on 31 December 2024, as disclosed in the 2024 Annual
Report. Therefore, the number of shares to vest for Oliver White will be 179,537 (approximately two thirds of the original
grant amount).
FC PSP Awards granted during 2025 (audited)
FC PSP Awards were granted to the Executive Directors on 20 May 2025 under our new Policy. The CEO was granted 350%
of salary and the CFO 250% of salary. Details of the awards are set out below:
Face value at grant
1
Type of award Number of shares £k % of salary Grant date Vesting date Holding period
Lisa Jacobs Nil-cost option 1,451,212 1,575 350% 20 May 2025 20 May 2028 20 May 2030
Tony Nicol Nil-cost option 806,229 875 250% 20 May 2025 20 May 2028 20 May 2030
1. In line with Funding Circle’s established approach, based on a three-month average share price to the grant date of 108.53 pence and salaries of £450,000 for
Lisa Jacobs and £350,000 for Tony Nicol.
The vesting of the FC PSP Awards is subject to performance targets, measured over three financial years to 31 December 2027.
These measures are Relative Total Shareholder Returns (rTSR), which is weighted 60%, and Adjusted PBT, which is weighted
40%. The Relative Total Shareholder Returns is measured against the FTSE 250 excluding Investment Trusts, which reflects our
ambition to enter, and progress through, the FTSE 250. We subsequently entered this index in January 2026. The Adjusted PBT
targets for 2027 were 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 £20m £60m
There is 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.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
105
Directors’ shareholding and share interests (audited)
Table of Directors’ share interests as at 31 December 2025
Beneficially
owned shares
Vested but
unexercised
awards
Unvested
awards
(not subject to
performance
conditions)
Unvested
awards
(subject to
performance
conditions)
Total that counts
towards
shareholding
guidelines
(including
unexercised
awards
net of tax)Total
Executive Directors
Lisa Jacobs 154,132 1,094,319 642,762 2,815,580 4,706,793 1,074,785
Tony Nicol 11,801 206,349 461,400 806,229 1,485,779 365,708
Non-Executive Directors
Andrew Learoyd
1
1,789,991 — — — 1,789,991 n/a
Ken Stannard 202,589 — — — 202,589 n/a
Geeta Gopalan
2
13,216 — — — 13,216 n/a
Helen Beck 9,235 — — — 9,235 n/a
Maeve Byrne — — — — — n/a
Richard Harvey — — — — — n/a
Hendrik Nelis
3
— — — — — n/a
Neil Rimer
3
— — — — — n/a
1. Andrew Learoyd stepped down from the Board in May 2025.
2. Geeta Gopalan stepped down from the Board in June 2025.
3. Hendrik Nelis and Neil Rimer are representatives of major shareholders and do not hold personal share interests in the Company.
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. Executive Directors are expected to build and maintain a shareholding equivalent to at least 250% of salary for the CEO and 200% of salary for other
Executive Directors. This requirement should be met within five years of appointment, subject to personal circumstances. As at the end of the FY 2025, the CEO
(appointed 1 January 2022) held 1,074,785 share interests that count towards the shareholding guidelines including unexercised awards net of tax, equivalent
to 297% of salary. The CFO (appointed 1 January 2025) held 365,708 share interests that count towards the shareholding guidelines including unexercised awards
net of tax, equivalent to 130% of salary. These shareholdings are calculated based on a three-month average share price to 31 December 2025 of 124.2 pence.
The calculation includes unexercised awards (on a net-of-tax basis), but excludes unvested awards subject to performance conditions.
Directors’ remuneration report
continued
Annual Report on Remuneration continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
106
Table of Directors’ vested and unvested share awards (audited)
Award type
1
No. of
awards at
1 January
2025
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
2025
Exercise
price
Market
price
on
exercise
Executive Directors
Lisa Jacobs
Unapproved 150,000 — — — — 150,000 £0.44 n/a
2018 LTIP 586,142 — — — — 586,142 £0.00 n/a
Share Incentive Plan
2
19,176 3,080
3
— — — 22,256 n/a n/a
Restricted shares 1,722,545 — — 358,177
4
— 1,722,545 £0.00 n/a
2021 Deferred Bonus Plan 469,126 166,186
5
— — — 635,312 £0.00 n/a
FC PSP — 1,451,212
6
— — — 1,451,212 £0.00 n/a
Tony Nicol
2018 LTIP 6 67,749 — — 206,349
7
— 667,749 £0.00 n/a
Share Incentive Plan
3
11,801 — — — — 11,801 n/a n/a
FC PSP — 806,229
6
— — — 806,229 £0.00 n/a
1. Other than in certain circumstances as set out in the Remuneration Policy on page 98 of the 2024 Annual Report (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. Executive Directors have participated in the all-employee Share Incentive Plan on the same basis as other employees since it’s introduction. From 2020 to 2022,
annual grants of up to £3,600 free shares to all eligible Circlers were made, with the opportunity for employees to purchase up to £1,800 partnership shares
and receive up to £1,800 matching shares on a 1:1 basis. In 2023, the grants of free shares were discontinued, however the matching ratio was increased to 2:1
which meant that a purchased of up to £1,800 partnership shares was matched by up to £3,600 matching shares.
3. Lisa Jacobs purchased £1,800 of partnership shares (1,540 shares) and was granted £3,600 of matching shares (3,080 shares) based on the 2:1 matching ratio
offered to all Circlers on 16 May 2025. Her matching shares will vest on 16 May 2027.
4. See page 105 for details in the “Restricted shares awarded in 2023 vesting in respect of 2025” section.
5. 40% of Lisa Jacobs’ 2024 bonus (£192.1k) was deferred into nil-cost options for three years on 27 March 2025, using a three-month average share price.
6. See page 105 for details in the “FC PSP Awards granted during 2025” section.
7. Relates to nil-cost options granted to Tony Nicol prior to his appointment to the Board. This award was granted on 30 March 2023 and vested on 30 March 2025
and were not subject to performance conditions.
Payments for loss of office (audited)
There were no payments made to any Directors for loss of office during the year.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
107
Payments to former Directors (audited)
As set out in the “Restricted shares awarded in 2023 vesting in respect of 2025” section above, the performance period for the
2023 Restricted Share Award ended on 31 December 2025. The Committee assessed the performance conditions and
determined that the award will vest in full.
Accordingly, Oliver White will receive 179,537 shares, which will vest on 30 March 2026. The estimated value of this award is
£223k (based on the three-month average share price to 31 December 2025 of 124.2 pence). This award was pro-rated to reflect
his time in role.
No other payments were made to former Directors during the year.
Performance graph
The chart below illustrates the Company’s TSR performance compared with that of the FTSE All Share 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 All Share Index on that date
to the end of each subsequent financial year.
1 Jan 2019 1 Jan 2020 1 Jan 2021
Funding Circle plc FTSE All Share Index
1 Jan 2022 1 Jan 2023 1 Jan 2024 1 Jan 2025
150.0
100.0
50.0
0.0
Value of £100 invested
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 2025
CEO Samir
Desai
Samir
Desai
Samir
Desai
Samir
Desai
Samir
Desai
Lisa
Jacobs
Lisa
Jacobs
Lisa
Jacobs
Lisa
Jacobs
CEO total remuneration
1
(£000)
204 4,081 211 201 629 661 701 1,348 1,520
Annual bonus payout
(% maximum)
2
n/a n/a n/a n/a 78.4% 45.0% 48.9% 85.4% 90.0%
Long-term incentives
(% maximum)
3
n/a n/a n/a n/a n/a n/a n/a 100% 100%
1. The 2018 figure includes share options that were granted prior to IPO, that 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.
Group revenue and Group PBT have been presented as these are two key performance measures used by the Directors in
assessing Funding Circle’s performance.
2025 2024 % change
Group revenue £204.3m £160.1m +27.6%
Group PBT £20.3m £3.4m +497.1%
People costs £68.4m £68.1m +0.4%
Average number of employees 685 721 -5.0%
Directors’ remuneration report
continued
Annual Report on Remuneration continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
108
Percentage change in Directors’ remuneration compared with employees’
The table below sets out the annual percentage change in remuneration from 2020 to 2025 for each individual who was a
Director during 2025, 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 Benefits Annual bonus
2024
to
2025
2023
to
2024
2022
to
2023
2021
to
2022
2020
to
2021
2024
to
2025
2023
to
2024
2022
to
2023
2021
to
2022
2020
to
2021
2024
to
2025
2023
to
2024
2022
to
2023
2021
to
2022
2020
to
2021
Executive Directors
Lisa Jacobs
1
+5.5% +2.7% +2.9% n/a n/a +3.8% +3.4% +2.7% n/a +25.3% +79.3% +12.0% n/a n/a
Tony Nicol
2
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
Non-Executive
Directors
Ken Stannard 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 n/a
Andrew Learoyd -62.4% — +0.6% +2.9% +5% -100% -100% n/a n/a n/a n/a n/a n/a n/a n/a
Geeta Gopalan -44.6 — +1.1% +11% +15% — — n/a n/a n/a n/a n/a n/a n/a n/a
Helen Beck
3
+14.2 — +1.2% +6.4% n/a — — n/a n/a n/a n/a n/a n/a n/a n/a
Maeve Byrne 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 n/a
Richard Harvey 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 n/a
Hendrik Nelis
4
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
4
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
5
-5% +0.9% +3.4% 8.7% -13.3% -33% -17.3% +7. 3% -4.0% +1.8% -10% -9.1% 7.0% +3.3% +61.2%
1. Lisa Jacobs was appointed to the Board on 1 January 2022.
2. Tony Nicol was appointed to the Board on 1 January 2025.
3. 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.
4. Hendrik Nelis and Neil Rimer, who are non-independent Non-Executive Directors, have waived their entitlement to a fee.
5. 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. It calculates its 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
2025 Option A 35.4 22.3 13.8
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
The CEO pay ratio for 2025 is broadly the same as 2024. This reflects the variable pay alignment between Executive Directors
and Circlers. The Board has confirmed that the median ratio is consistent with the Company’s wider policies on employee pay,
reward and progression.
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.
2025 25th percentile Median 75th percentile
Salary component £34,850 £51,193 £85,090
Total pay and benefits £42,955 £68,165 £110,422
The CEO remuneration is the total single-figure remuneration for the relevant years and for 2024 and 2025 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.
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Funding Circle Holdings plc | Annual Report and Accounts 2025
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Implementation of the Remuneration Policy for the year ended 31 December 2026
Salary
As set out in the Chair’s letter on page 97, the following salaries will apply to the Executive Directors effective 1 March 2026:
1 March
2025
1 March
2026 % change
Lisa Jacobs £450,000 £500,000 11.1%
Tony Nicol £350,000 £375,000 7.1%
Market positioning: Executive Director remuneration
The Committee reviews the Executive Directors’ total remuneration against a comparator group of listed companies of similar
size and complexity.
At the end of 2025, Funding Circle’s market capitalisation ranking was positioned towards the top of the FTSE Small Cap and just
below the entry level of the FTSE 250. Accordingly, the Committee considers a blended average of the bottom half of the FTSE 250
and the top half of the FTSE Small Cap to be the most appropriate benchmark for assessing remuneration competitiveness. As of
January 2026, Funding Circle entered the FTSE 250.
The benchmarking analysis (summarised in the table below) illustrates that Funding Circle’s remuneration structure is distinct
from the typical market practice for this group:
l The CEO’s 2026 salary is positioned below the lower quartile, and the CFO’s salary is positioned below the median of the
comparator group.
l Total remuneration is highly leveraged towards performance. The target total remuneration for both roles sits below the
upper quartile.
l Pay mix: Both the CEO’s and CFO’s pay mix is more variable than typical market practice, with the CEO’s being significantly
so (Funding Circle’s CEO pay mix is 70% variable vs. the upper quartile of 61%. Funding Circle’s CFO pay mix is 63% variable
vs. the upper quartile of 59%).
The Committee believes this structure, combining prudent fixed pay with a highly incentivised, performance-linked upside,
is fully aligned with Funding Circle’s remuneration philosophy. It ensures that superior rewards are delivered only if the
Executive Directors deliver the exceptional growth and shareholder returns required by our strategy.
Note: The comparator data below is based on 2025 salaries and remuneration policies. We would expect the market data to increase in line with typical Executive
Director increases for 2026.
Remuneration benchmarking
CEO CFO
Salary
Target total
remuneration* Salary
Target total
remuneration*
Average of FTSE 250 bottom half
and FTSE Small Cap top half
Upper quartile £640k £1,827k £425k £1,153k
Median £562k £1,561k £383k £1,021k
Lower quartile £513k £1,343k £346k £870k
Funding Circle
2026 package £500k £1,775k £375k £1,050k
2025 package £450k £1,598k £350k £980k
* Target total remuneration includes salary, target bonus, the expected value of any long-term incentives, and pension contributions.
Pay mix
CEO CFO
Fixed
remuneration
as a % of total
remuneration
Variable
remuneration
as a % of total
remuneration
Fixed
remuneration
as a % of total
remuneration
Variable
remuneration
as a % of total
remuneration
Average of FTSE 250 bottom half
and FTSE Small Cap top half
Upper quartile 39% 61% 41% 59%
Median 40% 60% 41% 59%
Lower quartile 42% 58% 44% 56%
Funding Circle (2026 & 2025 package) 30% 70% 38% 63%
Directors’ remuneration report
continued
Annual Report on Remuneration continued
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Benefits and pension
In line with our Policy, the benefits offered to Executive Directors are consistent with those available to other employees in the
Group. Executive Directors will receive a pension contribution (and/or cash in lieu) of 5% of salary, which is in line with the
contribution level available to the wider workforce
Annual bonus
For 2026, the maximum bonus opportunity will be 150% of salary for the CEO and 100% of salary for the CFO. The performance
measures will continue to be weighted to align with our strategic priorities of growth and profitability:
l Financial measures (70%)
• Group revenue (35%)
• Group PBT (35%)
l Strategic/non-financial measures (30%)
Consistent with our Policy, up to 40% of any bonus earned will be deferred into Funding Circle shares and will cliff vest after
three years. The level is dependent on the shareholding of individual Executive Directors. A level of deferral will always apply
(e.g. 20%). The specific level of deferral will depend on the Executive Director’s shareholding at the time of payment.
The Board considers the actual targets for 2026 to be commercially sensitive at this time; however, we will provide retrospective
disclosure of these targets in next year’s Directors’ Remuneration Report.
FC PSP
In line with the typical opportunities set out in the Policy, the Committee intends to grant awards under the FC PSP in 2026 at the
following levels: 350% of salary for the CEO and 250% of salary for the CFO. The Committee retains discretion to ensure the
actual grant reflects the latest available information prior to the grant date.
The performance measures will continue to be Relative TSR and PBT, ensuring alignment with our long-term growth strategy.
The relative TSR measure will continue to require median to upper quartile performance against the constituents of the FTSE 250
Index, excluding Investment Trusts, over the three-year performance period. The vesting schedule for the PBT measure is to be
determined and approved by the Committee. The schedule will be disclosed in the RNS relating to the LTIP award grant.
Any shares that vest will remain subject to a further two-year post-vesting holding period. In determining the final vesting level,
the Committee will consider the wider performance of the Group, including share price appreciation, to ensure the outcome is
fair and appropriate. Malus and clawback provisions apply in line with the Policy.
Non-Executive Director and Chair fees
The Chair and Non-Executive Director fees were reviewed in accordance with the Policy. To ensure fee levels remain
competitive, the Board (excluding those impacted by the relevant fees) agreed to increase the NED base fee by 4.2% for 2026.
The Senior Independent Director fee and Committee Chair fees will increase by 5% and 3.3% respectively. The Remuneration
Committee agreed to increase the Chair fee by 4.5%, from £220k to £230k, to help ensure a competitive position in the market.
Fee 2025 2026
Chair fee £220,000 £230,000
Non-Executive Director base fee £60,000 £62,500
Senior Independent Director fee £10,000 £10,500
Remuneration Committee Chair fee £15,000 £15,500
Audit Committee Chair fee £15,000 £15,500
Risk Committee Chair fee £15,000 £15,500
ESG Committee Chair fee (or any similar Committee appointed by the Board) £5,000 £5,175
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 2024 UK Corporate Governance Code and
the FCA’s UK Listing Rules.
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The Directors present their report (the “Directors’ Report”) and the Annual Report and Accounts for the year ended 31 December 2025.
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
The Code compliance Corporate governance report (page 80)
Going Concern and Viability Statement Viability Statement (pages 69 to 70)
Directors’ interests Remuneration Report (page 106) and Directors’ Report (page 112)
Long-term incentive schemes Remuneration Report (page 100)
Waiver of emoluments Remuneration Report (pages 96 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 165)
Significant shareholders Directors’ Report (page 114)
Related party agreements Note 25 to the consolidated financial statements (page 172)
Diversity Policy Strategic Report (page 29)
Climate-related financial disclosures Environment, social and governance (“ESG”) (pages 30 to 44)
Statutory information
Stakeholder engagement Strategic Report – Engaging our stakeholders (pages 45 to 48). See also
Board decision making and section 172 duties on page 78 of the
Corporate governance report.
Employee engagement Strategic Report – Engaging our stakeholders (pages 45 to 48) and Our
people (pages 26 to 29). See also Board decision making and section 172
duties on page 78 of the Corporate governance report.
Policy concerning the employment
of disabled Persons
Strategic Report – Our people (page 29)
Financial instruments Note 16 to the financial statements (pages 153 to 165)
Future developments of the business Strategic Report (pages 2 to 70)
Greenhouse gas emissions, energy consumption
and energy efficiency action
Strategic Report – Environment, social and governance (pages 30 to 55)
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 2 to 70, 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 2 to 70.
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 30 to 44, the Our business model section on pages
12 to 13, Our strategy section on pages 14 to 15, our KPIs on
page 16 to 17, and the Risk management and Going concern
and Viability Statement sections on pages 69 to 70.
Directors and their interests
Biographies of the Directors currently serving on the Board are
set out on page 74 to 75. 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 2026
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.
None of the Directors has a material interest in any significant
contract with the Company or any member of its Group.
Corporate Governance Statement
The disclosures required under DTR 7.2.1 are set out in this
Directors’ Report and in the Corporate governance report on
pages 72 to 115.
Report of the Directors
for the year ended 31 December 2025
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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 186.
The Directors do not recommend payment of a final dividend
for 2026 (2025: £nil).
Authority to allot or purchase the Company’s shares
The Directors have authority to issue and allot ordinary shares
pursuant to the Articles of Association and shareholder authority
is requested at each AGM. The Directors have authority to make
market purchases for ordinary shares and this authority is also
renewed annually at the AGM. At the Company’s AGM on
15 May 2025, the Company was authorised to make market
purchases of up to 47,803,082 ordinary shares, representing
approximately 15% of its issued share capital.
In the year ended 31 December 2025, the Company purchased
25,384,605 ordinary shares of nominal value of £0.001 in the
Company, representing 7.74% of the issued share capital
repurchased in 2025, at a cost of £30.3 million (excluding stamp
duty and broker fees), with the weighted average purchase price
of each share being £1.23. During the year, 23,194,203 ordinary
shares were cancelled (including 181,370 ordinary shares that
were pending cancellation from FY 2024) and 2,371,772 ordinary
shares were held in treasury (including 83,440 ordinary shares
that were pending transfer into treasury as at 31 December
2025).
During the year, the Trustee of the Company’s Employee
Benefit Trust made market purchases of 7,745,274 ordinary
shares. As at the date of this report, the Trustee holds 7,412,136
ordinary shares representing 2.47% of the Company’s issued
share capital excluding treasury shares are held in the
Employee Benefit Trust.
Share capital
Details of the Company’s share capital are shown in note 17
to the financial statements.
The Company’s issued share capital comprises ordinary
shares of £0.001, each of which is listed on the London Stock
Exchange. The total issued share capital of the Company as
at 31 December 2025 comprised 304,741,576 ordinary shares
of £0.001, of which 2,371,772 ordinary shares were held in
treasury (including 83,440 ordinary shares that were pending
transfer into treasury as at 31 December 2025). Further
information regarding the Company’s issued share capital can
be found on page 165 of the financial statements.
Rights attaching to shares
All issued shares excluding treasury 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 of Association,
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.
Votes attaching to shares held by the Group’s Employee Benefit
Trust are not exercised at general meetings of the Company.
Restrictions on transfer of securities
The Articles of Association 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.
The Group is also party to significant agreements for the
supply of services which contain provisions that may require
counterparty consent or trigger termination rights upon a
change of control of the Group.
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Significant shareholdings
As at 31 December 2025 and at 4 March 2026, the latest practicable date for inclusion in 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
2025
Percentage
issued share
capital as at
31 December
2025
Number
of ordinary
shares as at
4 March
2026
Percentage
issued capital
as at
4 March
2026
Index Ventures 58,618,351 19.38 58,618,351 19.51
Aktieselskabet af 2.7.2018 47,067,9 36 15.56 47,067,93 6 15.67
Accel London Management 26,906,743 8.90 26,906,743 8.96
Schroder Investment Management 20,967,314 6.93 20,683,657 6.88
DST Managers 16,505,378 5.46 16,505,378 5.49
Capital Group 14,713,073 4.87 14,713,073 4.90
JO Hambro Capital Management 12,740,415 4.21 12,704,652 4.23
Funding Circle Employee Benefit Trust 9,648,854 3.19 7,412,136 2.47
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 2026 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 – 2025 AGM
At the Company’s AGM, held on 15 May 2025, 20% or more
votes were cast against Resolutions 14 (Directors’ authority to
allot shares), 15 (general disapplication of pre-emption rights)
and 16 (disapplication of pre-emption rights in connection with
an acquisition or specified capital investment). Resolution 14,
being an ordinary resolution requiring 50% and Resolutions 15
and 16 being special resolutions requiring a 75% majority, all
of which did receive sufficient support to be passed, receiving
votes in favour of 78.23% respectively. However, a significant
number of votes (21.77%) were against the resolutions.
As per Provision 4 of the Code, on 13 November 2025, 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.
2026 AGM
The Company’s AGM will take place in person at 12:00 pm
on 21 May 2026 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 2025
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114
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 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 it faces.
Approved by the Board and signed on its behalf.
Lisa Jacobs
Chief Executive Officer
5 March 2026
Statement of Directors’ responsibilities
in respect of the financial statements
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115
finan c ial
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
176 Company balance sheet
177 Company statement of changes
in equity
178 Company statement of cash flows
179 Notes forming part of the Company
financial statements
187 Alternative performance measures
188 Glossary
191 Shareholder information
192 Company information
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116
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 2025 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 2025 (the “Annual Report”), which comprise:
l the Consolidated balance sheet as at 31 December 2025;
l the Company balance sheet as at 31 December 2025;
l the Consolidated statement of comprehensive income for
the year then ended;
l the Consolidated statement of changes in equity for the
year then ended;
l the Company statement of changes in equity for the year
then ended;
l the Consolidated statement of cash flows for the year
then ended;
l the Company statement of cash flows for the year
then ended; and
l 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
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 and FlexiPay
business as significant components and as a result they
were subject to a full scope audit. We identified one
non-significant component (Parent entity) and applied
judgement in determining the extent of audit testing to
be performed. 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 Valuation of deferred tax asset (Group).
l Carrying value of the investment in Funding Circle Limited
(FCL) (Parent).
Materiality
l Overall Group materiality: £2,225,000 (2024: £1,617,500)
based on 1% of total income.
l Overall Company materiality: £3,199,000 (2024: £3,560,000)
based on 1% of total assets.
l Performance materiality: £1,668,750 (2024: £1,213,125)
(Group) and £2,399,000 (2024: £2,670,000) (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.
Valuation of deferred tax asset is a new key audit matter this
year. Otherwise, the key audit matters below are consistent
with last year.
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117
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)
As at 31 December 2025 the gross carrying value
of FlexiPay lines of credit was £205.1 million
(2024: £110.0 million) and the associated allowance
for expected credit losses (“ECL”) was £32.2 million
(2024: £12.9 million) on drawn lines of credit and £2.5
million (2024: £2.7 million) on undrawn lines of
credit.
The determination of ECL provisions is inherently
judgemental and involves setting various assumptions
using forward-looking information. This can give rise
to increased estimation uncertainty.
ECL provisions by their nature are uncertain, and
plausible changes in economic conditions may
impact the credit performance of the lending book.
Modelling methodologies are used to collectively
assess and determine ECL allowances on lines of credit.
These may not appropriately address relevant risks
and therefore judgemental adjustments may be applied.
Our audit focused on the significant assumptions for
which variations had the most material impact on ECL.
We considered the following elements of the
determination of ECL to be significant:
l forward‑looking economic scenarios, and the
weighting assigned to these including the
application of management judgement; and
l estimates involved in determining probabilities
of default (“PD”).
Refer to Report of the Audit Committee –
Significant 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.
With the support of our credit risk modelling specialists, we performed
the following procedures:
l We understood and critically assessed the appropriateness of the ECL
accounting policy and model methodologies used by the management.
l We assessed the conceptual soundness of the model methodology
including PD.
l We tested that the model methodology had been implemented as
intended by replicating the complete ECL calculation, including the
PD, LGD, EAD and SICR calculations using management’s model
methodology and assumptions.
l We tested model performance through review and replication of key
model monitoring tests. We assessed the performance of key model
elements (such as 12-month PD and Lifetime PD), and considered
if they indicated that the models continued to perform appropriately
or if any post-model adjustments were required.
l We used a challenger modelling approach with different
macroeconomic variables to critically assess the reasonableness of
management’s macroeconomic model, selected economic scenarios,
associated scenario weightings and management judgement applied.
l We assessed the macroeconomic forecasts and weightings used in
our challenger model benchmarking and in management’s base case,
against independent forecasts and evaluated the reasonableness of
judgements applied by management and the resulting PD outcomes.
We also tested and evaluated the disclosures in note 2, regarding the
critical accounting judgements and key sources of estimation uncertainty
involved in determining the expected credit loss provision.
Report on the audit of the financial statements continued
Our audit approach continued
Key audit matters continued
Independent auditors’ report continued
to the members of Funding Circle Holdings plc
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118
Report on the audit of the financial statements continued
Our audit approach continued
Key audit matters continued
Key audit matter How our audit addressed the key audit matter
Valuation of deferred tax asset (Group)
The Group has recognised a deferred tax asset
of £23.6 million in respect of unused tax losses
(out of the total £26.1 million) for the first time
at 31 December 2025. This recognition reflects
management’s view that the Company will generate
sufficient taxable profits in the future to utilise
these losses.
The deferred tax asset was determined based on
probable future taxable profits expected to be earned
over an assessed forecast period.
Management’s assessment of future taxable profits is
based on the Board‑approved forecasts, which
assume growth in profitability over the forecast
period.
The profitability forecast relies on assumptions and
estimates about future trading performance and wider
market conditions which are inherently uncertain.
Judgement was involved in determining the period
of assessment and in certain significant assumptions
used to value the asset.
Management applies probability weightings to the
forecast profits to reflect the risks associated with
achieving longer-term profit targets. Determining
these weightings involves judgement.
Refer to Report of the Audit Committee – Significant
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 8
(income tax (credit)/charge) of the Group financial
statements.
We critically assessed the appropriateness of the deferred tax asset
recognition and performed the following procedures:
l We reviewed management’s assessment for compliance with IAS 12
criteria for first time recognition of deferred tax assets. We evaluated
management’s deferred tax assessment (including the recognition
criteria applied to carried forward losses, applicable tax rates and
attributes) and assessed the Board-approved forecast.
l We benchmarked and evaluated the forecast profits growth rate
against external market expectations for SME lending and fintech
businesses and similar products to assess whether assumed growth
was within a reasonable range of market expectations.
l We assessed the Group’s historical forecasting record by comparing
actual outcomes to previous medium-term plans.
l We evaluated the judgements made in the underlying forecasts
and the reasonableness of the forecast period used to value the
asset. In doing so, we considered the reliability of forecasts and
the forecasting period against IAS 12 and European and Securities
and Markets Authority (“ESMA”) guidance.
l We performed sensitivity analysis to assess a reasonable range
of supportable outcomes for valuation of deferred tax asset.
l We tested and evaluated the reasonableness of relevant disclosures
in the financial statements, in particular the articulation of the critical
judgements and estimates given the sensitivity of outcomes to
changes in forecasts.
Carrying value of the investment in Funding Circle
Limited (FCL) (Parent)
The Company holds an investment in FCL with a
carrying value of £261.1 million (2024: £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.
A review for indicators of impairment was performed
by management, including considering the latest
available trading forecasts. The assessment
identified no impairment indicators in respect of the
investment in subsidiary undertakings.
Given the carrying value of the investment is material
and its significance to the Company balance sheet
this has been an area of focus in our audit.
Refer to note 5 (investments in subsidiary
undertakings) of the Company financial statements.
We evaluated the Directors’ determination of whether there were any
indicators of impairment. Our procedures included:
l Considering the approach taken to assess for impairment indicators
against the requirements of IAS 36 and substantiating relevant
information within the assessment.
l Comparing the carrying value of the investment with the market
capitalisation of the Group at 31 December 2025.
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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.
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 significant products and services offered by Funding Circle across Term Loans and FlexiPay segments.
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 and FlexiPay business as full scope components due to being significant due to size.
We considered the Parent entity to be a non-significant component for the audit of the consolidated financial statements.
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.
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 for the statutory audit of the Company.
The impact of climate risk on our audit
As part of our audit we made inquiries 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.
As part of our audit, we made inquiries of management to understand the process management adopted to assess the extent
of the potential impact of climate risk on the Group’s and Company’s financial statements and support the disclosures made.
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 £2,225,000 (2024: £1,617,500). £3,199,000 (2024: £3,560,000).
How we determined it 1% of total income. 1% of total assets.
Rationale for benchmark applied We have used an income based metric
as the Group has historically been loss
making and only recently became
profitable. We selected total income
as the benchmark as it is considered
to be suitably stable and reflects the
underlying business.
We consider total assets to be an appropriate
benchmark to apply on the basis that the
Company is an investment holding company
for the Group’s subsidiaries.
Independent auditors’ report continued
to the members of Funding Circle Holdings plc
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120
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 £2,105,000 and £1,900,000.
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% (2024: 75%) of overall materiality,
amounting to £1,668,750 (2024: £1,213,125) for the Group
financial statements and £2,399,000 (2024: £2,670,000)
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 Committee that we would report
to it misstatements identified during our audit above £111,250
(Group audit) (2024: £80,875) and £160,000 (Company audit)
(2024: £178,000) 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;
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.
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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 2025
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 enquiries 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 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.
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.
Independent auditors’ report continued
to the members of Funding Circle Holdings plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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122
Report on the audit of the financial statements
continued
Responsibilities for the financial statements and the audit
continued
Auditors’ responsibilities for the audit of the
financial statements continued
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 regulations of 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 UK tax legislation and 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 to
manipulate financial performance. 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 inquiries of the Directors and others within the organisation,
including outside of finance, as to their knowledge, awareness
and concerns regarding fraud, or known or suspected
instances of non‑compliance with laws and regulation;
l review of Board meeting minutes to identify any inconsistencies
with other information provided by management;
l identification and testing of journal entries meeting fraud
risk criteria, in particular any journal entries with unusual
account combinations impacting total income;
l challenging significant assumptions and judgements made
by management in its accounting estimates and assessing
them for bias, including those relating to the allowance for
expected credit losses for FlexiPay lines of credit and
relating to the valuation of the deferred tax asset; and
l review of internal audit reports insofar as they related to the
financial statements.
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.
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
We were first appointed by the Company for the financial year
ended 31 December 2015. Our uninterrupted engagement
covers eleven financial years. The Company was a public
interest entity for eight of those financial years.
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
5 March 2026
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123
| 31 December | |||||
| 2024 | 31 December | ||||
| Before | 2024 | ||||
| 31 December | exceptional | Exceptional | 31 December | ||
| 2025 | items | items 1 | 2024 | ||
| Note | £m | £m | £m | £m | |
Transaction fees | |||||
Servicing fees | |||||
Interest income 2 | |||||
Other fees | |||||
Operating income | |||||
Investment income | |||||
Total income | |||||
Fair value (losses)/gains | ( | ||||
Cost of funds | ( | ( | ( | ||
Net income 3 | 5 | ||||
Expected credit loss charge | 2, 15, 16, 27 | ( | ( | ( | |
People costs | 4, 6, 7 | ( | ( | ( | ( |
Marketing costs | 6 | ( | ( | ( | |
Depreciation, amortisation and impairment | 4, 5, 6, 10, 11 | ( | ( | ( | ( |
Other costs | 6 | ( | ( | ( | |
Operating expenses | 6 | ( | ( | ( | ( |
Profit/(loss) before taxation | 5 | ( | |||
Income tax credit/(charge) | 8 | ( | ( | ||
Profit/(loss) for the year from continuing operations | ( | ||||
(Loss)/profit for the year from discontinued operations | 3 | ( | |||
Profit/(loss) 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 income/(expense) 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 income/(expense) attributable to the owners of the Parent | ( | ( | |||
| Earnings per share | |||||
Basic earnings per share from continuing operations | 9 | ||||
Diluted earnings 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 | ( | |||
Basic total earnings/(loss) per share from all operations | 3, 9 | ( | |||
Diluted total earnings/(loss) per share from all operations | 3, 9 | ( |
1. Exceptional items are detailed in note 4.
2. Interest income recognised on assets held at amortised cost under the effective interest rate method and £5.1 million (2024: £7.7 million) on money market funds
held at fair value through profit and loss.
3. Net income is also referred to as “revenue”.
The notes on pages 128 to 175 form part of these financial statements.
Consolidated statement of
comprehensive income
for the year ended 31 December 2025
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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124
| 31 December | 31 December | ||
| 2025 | 2024 | ||
| 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 | ||
Deferred tax asset | 8 | ||
SME loans held at amortised cost | 12, 16 | ||
| 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 | ||
Lease liabilities | 11, 22 | ||
Total liabilities | |||
| Equity | |||
Share capital | 17 | ||
Share premium account | 18 | ||
Foreign exchange reserve | 19 | ||
Share options reserve | |||
Retained earnings | 20 | ||
Total equity | |||
Total equity and liabilities |
Company registration number 07123934
The notes on pages 128 to 175 form part of these financial statements.
Consolidated balance sheet
as at 31 December 2025
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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125
| Retained | |||||||
| Share | Foreign | Share | earnings/ | ||||
| Share | premium | exchange | options | (accumulated | Total | ||
| capital | account | reserve | reserve | losses) | equity | ||
| Note | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2024 | ( | ||||||
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 of own shares | 17, 20 | ( | ( | ( | |||
Capital reduction | 18, 20 | ( | |||||
| Issue of share capital/exercise | 18 | ||||||
| of share options | |||||||
| Employee share schemes – | 21 | ||||||
| value of employee services | |||||||
Balance at 31 December 2024 | |||||||
Profit for the year | 20 | ||||||
| Other comprehensive income | |||||||
| Exchange differences on translation | 19 | ||||||
| of foreign operations | |||||||
Total comprehensive income | |||||||
| Transactions with owners | |||||||
Transfer of share option costs | 20 | ( | |||||
Buyback of own shares | 17, 20 | ( | ( | ||||
| Purchase of own shares by Employee | 17, 20 | ( | ( | ||||
| Benefit Trust (“EBT”) | |||||||
| Issue of share capital/exercise | 18 | ||||||
| of share options | |||||||
| Employee share schemes – | 21 | ||||||
| value of employee services | |||||||
Balance at |
The notes on pages 128 to 175 form part of these financial statements.
Consolidated statement of changes
in equity
for the year ended 31 December 2025
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
126
| 31 December | 31 December | ||
| 2025 | 2024 | ||
| 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/purchase of SME loans held at amortised cost | 16 | ( | ( |
Proceeds from sale of SME loans held at amortised cost | 16 | ||
Cash receipts from SME loans held at amortised cost | 16 | ||
Originations/purchase of 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 | ||
Proceeds from sale of subsidiary | 3 | ||
Direct costs of selling subsidiary | 3 | ( | |
Cash disposed of on sale of subsidiary | 3 | ( | |
Net cash (outflow)/inflow from investing activities | ( | ||
| Financing activities | |||
Proceeds from bank borrowings | 22 | ||
Repayment of bank borrowings | 22 | ( | ( |
Proceeds from the exercise of share options | 18 | ||
Purchase of own shares by EBT | 17, 20 | ( | |
Buyback of own shares | 17, 20 | ( | ( |
Proceeds from subleases | |||
Payment of lease liabilities | 22 | ( | ( |
Net cash inflow from financing activities | |||
Net decrease 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 |
The notes on pages 128 to 175 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 2025
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1. Material accounting policies
Notes forming part of the consolidated
financial statements
for the year ended 31 December 2025
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1. Material accounting policies continued
| Applicable for | ||
| financial years | ||
| beginning | ||
Standard/interpretation | Content | on/after |
| Amendments to IAS 21 – Lack of | Foreign | 1 January |
| Exchangeability | exchange | 2025 |
| rates |
| Applicable for | ||
| financial years | ||
| beginning | ||
Standard/interpretation | Content | on/after |
| Amendment to IFRS 9 and IFRS 7 | Financial | 1 January |
| – Classification and Measurement | instruments | 2026 |
| of Financial Instruments | ||
| IFRS 18 Presentation and | Financial | 1 January |
| Disclosure in Financial Statements | statements | 2027 |
| disclosures | ||
| IFRS 19 Subsidiaries without | Financial | 1 January |
| Public Accountability: Disclosures | statements | 2027 |
| disclosures |
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
1. Material accounting policies continued
Summary of new and amended accounting policies
Summary of existing accounting policies
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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1. Material accounting policies continued
Income recognition continued
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
1. Material accounting policies continued
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1. Material accounting policies continued
Intangible assets continued
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
1. Material accounting policies continued
Leases continued
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1. Material accounting policies continued
Investment in associates continued
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
1. Material accounting policies continued
Financial instruments continued
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1. Material accounting policies continued
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
2. Critical accounting judgements and key sources of estimation uncertainty continued
| Change in | ||||||
| average PD | Change in | |||||
| compared | ECL compared | |||||
| Scenario | to blended | to blended | ||||
| weighting | 100% weighting | Average PD | ECL | scenario | scenario | |
| ECL scenario | % | to scenario | % | £ | % | £ |
Base case | 70% | 100% | 8.8% | 34.5 | (0.2)% | (0.2) |
Upside | 15% | 100% | 6.0% | 29.6 | (3.0)% | (5.1) |
Downside | 15% | 100% | 12.4% | 40.9 | 3.4% | 6.2 |
Blended weighted scenarios | 100% | 100% | 9.0% | 34.7 | — | — |
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2. Critical accounting judgements and key sources of estimation uncertainty continued
Key sources of estimation uncertainty continued
| Fair value | Relationship of | |||
| Description | £m | Unobservable input | Inputs | unobservable inputs to fair value |
Shorter-term loans | 120.4 | Lifetime cumulative default | 16.6% | A change in the lifetime cumulative default |
| rate as % of original | rate by +590/-470 bps would decrease/ | |||
| increase fair value by £(11.2) million/ | ||||
| £8.5 million respectively. |
| Fair value | Relationship of | |||
| Description | £m | Unobservable input | Inputs | unobservable inputs to fair value |
Shorter-term loans | 120.4 | Risk-adjusted discount rate | 22.4% | A change in the discount rates by +/-200 |
| bps would decrease/increase fair value by | ||||
| £(1.2) million/£1.2 million respectively. |
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
| Before | 31 December | |||
| exceptional | Exceptional | 2024 | ||
| Note | items | items | £m | |
Transaction fees | 10.3 | — | 10.3 | |
Servicing fees | 2.1 | — | 2.1 | |
Interest income | 0.7 | — | 0.7 | |
Other fees | 0.2 | — | 0.2 | |
Operating income | 13.3 | — | 13.3 | |
Investment income | 0.7 | — | 0.7 | |
Total income | 14.0 | — | 14.0 | |
Fair value gains | 2.2 | — | 2.2 | |
Net income | 16.2 | — | 16.2 | |
Expected credit loss charge | 15, 16 | (0.1) | — | (0.1) |
People costs | (16.0) | 1.7 | (14.3) | |
Marketing costs | (3.7) | — | (3.7) | |
Depreciation, amortisation, impairment and modification gains | 10, 11 | (0.3) | — | (0.3) |
Other costs | (6.2) | — | (6.2) | |
Operating expenses | (26.2) | 1.7 | (24.5) | |
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 | |
Income tax | 8 | (0.1) | — | (0.1) |
(Loss)/profit for the year from discontinued operations | (10.2) | 18.5 | 8.3 | |
| Other comprehensive expense | ||||
| Exchange differences on translation of foreign operations – | 19 | (0.2) | (8.7) | (8.9) |
| discontinued operations | ||||
Total comprehensive (expense)/income for the year attributable to owners of the Parent | (10.4) | 9.8 | (0.6) | |
| Earnings per share | ||||
Basic (loss)/earnings per share from discontinued operations | 9 | (3.0)p | 2.4p | |
Diluted (loss)/earnings per share from discontinued operations | 9 | (3.0)p | 2.2p |
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3. Discontinued operations continued
| 31 December | |
| 2024 | |
| £m | |
Profit before tax | 8.4 |
Depreciation, amortisation impairment and modification gains | (0.3) |
Exceptional items | 18.5 |
Expected credit loss credit/(charge) | (0.1) |
| 31 December | |
| 2024 | |
| £m | |
Cash and cash equivalents at the beginning of the year | 22.3 |
Net cash outflow from operating activities | (8.6) |
Net cash outflow from investing activities | (13.3) |
Net cash outflow from financing activities | (0.6) |
Net decrease in cash generated | (0.2) |
Effect of foreign exchange rate changes | 0.2 |
Cash and cash equivalents at the end of the year | — |
| 31 December | |
| 2024 | |
| £m | |
| Consideration received: | |
Cash consideration at prevailing exchange rate | 32.6 |
Net assets disposed of (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 |
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
3. Discontinued operations continued
Details of the sale of the US business (exceptional items from discontinued operations) continued
| 31 December | |
| 2024 | |
| £m | |
| Non-current assets | |
Property, plant and equipment | 0.3 |
Investment in trusts and co-investments | 0.7 |
SME loans held at amortised cost | 1.9 |
Trade and other receivables | 1.0 |
| 3.9 | |
| Current assets | |
SME loans held at fair value through profit and loss | 5.9 |
Trade and other receivables | 3.1 |
Cash and cash equivalents | 23.1 |
| 32.1 | |
Total assets | 36.0 |
| Current liabilities | |
Trade and other payables | 4.7 |
Lease liabilities | 3.6 |
| 8.3 | |
| Non-current liabilities | |
Bank borrowings | 1.6 |
Lease liabilities | 3.9 |
| 5.5 | |
Total liabilities | 13.8 |
Total net assets | 22.2 |
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.
In the previous year, 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.
5. Segmental information
IFRS 8 Operating Segments requires the Group to determine its operating segments based on information which is used
internally for decision making. Based on the internal reporting information and management structures within the Group, it has
been determined that there are two continuing business and in the comparative period one discontinued US business operating
segments. Reporting on this basis is reviewed by the Executive Committee (“ExCo”), which is the chief operating decision maker
(“CODM”). The ExCo is made up of the Executive Directors and other senior management and is responsible for the strategic
decision making of the Group. Reporting segments are identified by the required reporting information determined by the CODM
which tends to be grouped by geography in the comparative period or by products with similar characteristics. The Term Loans
segment comprises the Term Loan products along with shorter-term loans, which have similar features of containing fixed Term
Loans and similar revenue streams and costs. The FlexiPay segment contains our line of credit products including Cashback
card and generally contains our newer product innovations and more flexible lending products.
The ExCo measures the performance of each segment primarily by reference to profit before tax. Additionally, the ExCo utilises
a non-GAAP measure, profit before tax (before exceptional items), which is defined as profit/loss for the year before taxation and
excluding the impact of exceptional items. Profit before tax (before exceptional items) is a measure of Group performance as it
allows better comparability of the underlying performance of the business. The segment reporting excludes the impact of the
Group’s transfer pricing arrangements as this is not information presented to, or used by, the CODM in decision making or the
allocation of resources. The segment results include an allocation of central and shared costs which are allocated on the basis
of budgeted revenue generation between the segments.
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142
5. Segmental information continued
31 December 2025 | 31 December 2024 1 | |||||
Continuing operations | Continuing operations | |||||
| Term Loans | FlexiPay | Total | Term Loans | FlexiPay | Total | |
| £m | £m | £m | £m | £m | £m | |
Transaction fees | 105.8 | 1.2 | 107.0 | 84.7 | 0.6 | 85.3 |
Servicing fees | 35.9 | — | 35.9 | 37.5 | — | 37.5 |
Interest income | 5.6 | 44.6 | 50.2 | 8.3 | 22.6 | 30.9 |
Other fees | 5.0 | 0.1 | 5.1 | 5.1 | 0.1 | 5.2 |
Operating income | 152.3 | 45.9 | 198.2 | 135.6 | 23.3 | 158.9 |
Investment income | 24.3 | — | 24.3 | 2.8 | — | 2.8 |
Total income | 176.6 | 45.9 | 222.5 | 138.4 | 23.3 | 161.7 |
Fair value (losses)/gains | (6.7) | — | (6.7) | 4.2 | — | 4.2 |
Cost of funds | (2.5) | (9.0) | (11.5) | — | (5.8) | (5.8) |
Net income (“revenue”) | 167.4 | 36.9 | 204.3 | 142.6 | 17.5 | 160.1 |
Profit/(loss) before tax | 32.2 | (11.9) | 20.3 | 16.7 | (15.9) | 0.8 |
| Depreciation, amortisation impairment and modification gains | (8.5) | (2.6) | (11.1) | (11.4) | (1.8) | (13.2) |
Exceptional items | — | — | — | (2.3) | (0.3) | (2.6) |
Expected credit loss credit/(charge) | 0.9 | (19.2) | (18.3) | 0.2 | (8.8) | (8.6) |
1. The segmental results of the US business are not presented above and are presented within note 3 – discontinued operations.
| Before | |||||
| 31 December | exceptional | Exceptional | 31 December | ||
| 2025 | items | items 1 | 2024 | ||
| Note | £m | £m | £m | £m | |
| Continuing operations | |||||
Depreciation | 11 | 2.3 | 3.0 | — | 3.0 |
Amortisation | 10 | 8.7 | 9.8 | — | 9.8 |
Impairment of intangibles | 4, 10 | 0.1 | 0.8 | 0.3 | 1.1 |
Modification gains | 11 | — | (0.4) | — | (0.4) |
Employment costs (including contractors) | 4, 7 | 68.4 | 68.1 | 2.3 | 70.4 |
Marketing costs (excluding employment costs) | 62.0 | 45.6 | — | 45.6 | |
Data and technology | 8.0 | 7.2 | — | 7.2 | |
Other expenses | 16.2 | 14.0 | — | 14.0 | |
Total operating expenses from continuing operations | 165.7 | 148.1 | 2.6 | 150.7 |
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143
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
6. Operating expenses continued
| 31 December | 31 December | |
| 2025 | 2024 | |
| £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 | 0.4 |
– Fees payable to the Company’s auditors and its associates for the statutory audit of the financial statements of subsidiaries of the Company | 0.6 | 0.5 |
Total audit fees | 1.0 | 0.9 |
| 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 |
7. Employees
The average monthly number of employees (including Directors) during the year was:
| 2025 | 2024 | |
| Number | Number | |
| Continuing operations | ||
Term Loans | 600 | 628 |
FlexiPay | 83 | 88 |
Other | 2 | 5 |
Total continuing operations | 685 | 721 |
Discontinued operations 1 | ||
US | — | 106 |
Total discontinued operations | — | 106 |
Total | 685 | 827 |
In addition to the employees above, the average monthly number of contractors during the year was 54 (2024: 80), of which nil
(2024: 13) related to the US
1
.
1. Average monthly numbers are calculated over 12 months and for the 2024 US discontinued operations include six 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 | |||
| 2025 | 2024 | |||
| Before | ||||
| exceptional | Exceptional | |||
| Total | items | items ¹ | Total | |
| Continuing operations | £m | £m | £m | £m |
Wages and salaries | 57.4 | 56.0 | — | 56.0 |
Social security costs | 7.1 | 6.3 | — | 6.3 |
Pension costs | 2.1 | 2.1 | — | 2.1 |
Share-based payments | 5.9 | 7.8 | — | 7.8 |
Exceptional costs | — | — | 2.3 | 2.3 |
72.5 | 72.2 | 2.3 | 74.5 | |
Contractor costs | 4.7 | 4.9 | — | 4.9 |
Less: capitalised development costs | (8.8) | (9.0) | — | (9.0) |
Employment costs net of capitalised development costs | 68.4 | 68.1 | 2.3 | 70.4 |
1. See note 4 for details of exceptional items.
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144
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
| Current tax | ||
| Continuing operations | ||
| UK | ||
Current tax on profits/(losses) for the year | 0.4 | 0.5 |
0.4 | 0.5 | |
Total current tax charge from continuing operations | 0.4 | 0.5 |
| Discontinued operations | ||
| US | ||
Current tax on (losses)/profits for the year | — | 0.1 |
Adjustment in respect of prior years | — | — |
Total current tax charge from discontinued operations | — | 0.1 |
Total current tax charge | 0.4 | 0.6 |
| Deferred tax | ||
| Continuing operations | ||
| UK | ||
Deferred tax on profits/(losses) for the year | (26.1) | — |
(26.1) | — | |
Total deferred tax credit from continuing operations | (26.1) | — |
Total deferred tax credit | (26.1) | — |
Total tax (credit)/charge | (25.7) | 0.6 |
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145
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
8. Income tax (credit)/charge continued
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Profit before taxation for the Group | 20.3 | 9.2 |
Taxation on profit at 25.0% (2024: 25.0%) | 5.1 | 2.3 |
| Effects of: | ||
Research and development | — | 0.4 |
Foreign tax rates | — | 0.1 |
Non-taxable/non-deductible expenses | — | 0.3 |
Unrecognised timing differences | 0.2 | (0.1) |
Unrecognised tax losses accumulated | 0.4 | 1.1 |
Deferred tax assets recognised | (26.1) | — |
Patent box | (5.3) | — |
Impairment charge | — | (3.5) |
Total tax (credit)/charge | (25.7) | 0.6 |
Total tax (credit)/charge from continuing operations | (25.7) | 0.5 |
Total tax charge from discontinued operations | — | 0.1 |
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Carry forward losses (UK) | 23.6 | — |
RDEC Step 2 credits | 2.5 | — |
Recognised deferred tax | 26.1 | — |
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146
8. Income tax (credit)/charge continued
Deferred tax asset continued
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Property, plant and equipment | 8.5 | 6.9 |
Carry forward losses | 34.5 | 125.0 |
Deferred stock options | 22.7 | 22.5 |
RDEC Step 2 credits | — | 8.0 |
Other | 0.6 | 0.2 |
Unrecognised deferred tax 1 | 66.3 | 162.6 |
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 | 31 December | Before | |
| 2025 | 2024 | exceptional | |
| Total | Total | items | |
| Earnings per share from continuing operations | £m | £m | £m |
Profit for the year from continuing operations | 46.0 | 0.3 | 2.9 |
Basic weighted average number of ordinary shares in issue (million) | 314.6 | 342.4 | 342.4 |
Basic earnings per share from continuing operations | 14.6p | 0.1p | 0.8p |
Profit for the year from continuing operations | 46.0 | 0.3 | 2.9 |
Diluted weighted average number of ordinary shares in issue (million) | 328.6 | 382.2 | 382.2 |
Diluted earnings per share from continuing operations | 14.0p | 0.1p | 0.8p |
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147
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
9. Earnings/(loss) per share continued
| 31 December | |||
| 2024 | |||
| 31 December | 31 December | Before | |
| 2025 | 2024 | exceptional | |
| Total | Total | items | |
| Earnings/(loss) per share from discontinued operations | £m | £m | £m |
Profit/(loss) for the year from discontinued operations | — | 8.3 | (10.2) |
Basic weighted average number of ordinary shares in issue (million) | 314.6 | 342.4 | 342.4 |
Basic earnings/(loss) per share from discontinued operations | — | 2.4p | (3.0)p |
Profit/(loss) for the year from discontinued operations | — | 8.3 | (10.2) |
Diluted weighted average number of ordinary shares in issue (million) | 328.6 | 382.2 | 342.4 |
Diluted earnings/(loss) per share from discontinued operations | — | 2.2p | (3.0)p |
| 31 December | |||
| 2024 | |||
| 31 December | 31 December | Before | |
| 2025 | 2024 | exceptional | |
| Total | Total | items | |
| Earnings/(loss) per share from all operations | £m | £m | £m |
Profit/(loss) for the year | 46.0 | 8.6 | (7.3) |
Basic weighted average number of ordinary shares in issue (million) | 314.6 | 342.4 | 342.4 |
Basic total earnings/(loss) per share | 14.6p | 2.5p | (2.1)p |
Profit/(loss) for the year | 46.0 | 8.6 | (7.3) |
Diluted weighted average number of ordinary shares in issue (million) | 328.6 | 382.2 | 342.4 |
Diluted total earnings/(loss) per share | 14.0p | 2.3p | (2.1)p |
Adjusted view of earnings per share from continuing operations excluding the recognition of deferred tax asset
During the year ended 31 December 2025, the Group recognised a deferred tax asset of £26.1 million for the first time that
resulted in a material tax credit in the year, which increased profit for the year and resulted in a higher earnings per share figure.
While the recognition of deferred tax is not considered an exceptional item for the purposes of the consolidated statement of
comprehensive income, it is considered that an adjusted view of earnings per share from continuing operations excluding the
recognition of deferred tax and exceptional items is useful to users of the financial statements to allow a more direct comparison
of underlying performance.
| 31 December | ||
| 2024 | ||
| 31 December | Before | |
| 2025 | exceptional | |
| Adjusted | items | |
| Total | Total | |
| Adjusted earnings per share from continuing operations | £m | £m |
Profit for the year from continuing operations | 46.0 | 0.3 |
Less impact of deferred tax | (26.1) | — |
Less exceptional items | — | 2.6 |
Adjusted profit for the year from continuing operations | 19.9 | 2.9 |
Basic weighted average number of ordinary shares in issue (million) | 314.6 | 342.4 |
Basic adjusted earnings per share from continuing operations | 6.3p | 0.8p |
Profit for the year from continuing operations | 46.0 | 0.3 |
Less impact of deferred tax | (26.1) | — |
Less exceptional items | — | 2.6 |
Adjusted profit for the year from continuing operations | 19.9 | 2.9 |
Diluted weighted average number of ordinary shares in issue (million) | 328.6 | 382.2 |
Diluted adjusted total earnings per share from continuing operations | 6.1p | 0.8p |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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148
| Capitalised | ||||
| development | Computer | Other | ||
| costs | software | intangibles | Total | |
| £m | £m | £m | £m | |
| Cost | ||||
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) |
Derecognition of assets of discontinued operations | (15.7) | — | — | (15.7) |
At 31 December 2024 | 50.3 | 0.1 | 1.1 | 51.5 |
At 1 January 2025 | 50.3 | 0.1 | 1.1 | 51.5 |
Exchange differences | — | — | 0.1 | 0.1 |
Additions | 8.8 | 0.1 | — | 8.9 |
Disposals | (3.4) | — | — | (3.4) |
Derecognition of assets of discontinued operations | — | — | — | — |
At 31 December 2025 | 55.7 | 0.2 | 1.2 | 57.1 |
| Accumulated amortisation | ||||
At 1 January 2024 | 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) |
Derecognition of assets of discontinued operations | (15.7) | — | — | (15.7) |
At 31 December 2024 | 29.1 | 0.1 | 1.1 | 30.3 |
At | 29.1 | 0.1 | 1.1 | 30.3 |
Exchange differences | — | — | 0.1 | 0.1 |
Charge for the year | 8.7 | — | — | 8.7 |
Impairment | 0.1 | — | — | 0.1 |
Disposals | (3.4) | — | — | (3.4) |
At 31 December 2025 | 34.5 | 0.1 | 1.2 | 35.8 |
| Carrying amount | ||||
At 31 December 2025 | 21.2 | 0.1 | — | 21.3 |
At 31 December 2024 | 21.2 | — | — | 21.2 |
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Property, plant and equipment (owned) | 2.5 | 2.9 |
Right-of-use assets | 5.4 | 6.7 |
7.9 | 9.6 |
| Right-of-use | |||||
| Leasehold | Computer | Furniture and | assets | ||
| improvements | equipment | fixtures | (property) | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
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 | 2.3 | 0.5 | 0.1 | — | 2.9 |
| Exchange differences and other non-cash | (0.4) | — | — | 0.1 | (0.3) |
| movements | |||||
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 |
At 1 January 2025 | 3.2 | 1.7 | 0.8 | 18.3 | 24.0 |
Disposals | — | (0.5) | (0.1) | — | (0.6) |
Additions | 0.3 | 0.3 | — | — | 0.6 |
At 31 December 2025 | 3.5 | 1.5 | 0.7 | 18.3 | 24.0 |
| Accumulated depreciation | |||||
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 |
At 1 January 2025 | 1.1 | 1.0 | 0.7 | 11.6 | 14.4 |
Disposals | — | (0.5) | (0.1) | — | (0.6) |
Charge for the year | 0.5 | 0.5 | — | 1.3 | 2.3 |
At 31 December 2025 | 1.6 | 1.0 | 0.6 | 12.9 | 16.1 |
| Carrying amount | |||||
At 31 December 2025 | 1.9 | 0.5 | 0.1 | 5.4 | 7.9 |
At 31 December 2024 | 2.1 | 0.7 | 0.1 | 6.7 | 9.6 |
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11. Property, plant and equipment, right-of-use assets and lease liabilities continued
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Current | 1.8 | 1.8 |
Non-current | 4.5 | 5.8 |
Total | 6.3 | 7.6 |
| 31 December | 31 December | |
| 2025 | 2024 | |
| Continuing operations | £m | £m |
Depreciation charge of right-of-use assets (property) | 1.3 | 1.9 |
Gain on modification of lease liability | — | (0.4) |
Interest expense (included in operating expenses) | 0.6 | 0.6 |
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
| Non-current | ||
SME loans – amortised cost | 1.2 | 1.4 |
Investment in trusts and co-investments – FVTPL | 11.9 | 17. 8 |
Total non-current | 13.1 | 19.2 |
| Current | ||
SME loans – amortised cost | 0.9 | 0.7 |
Lines of credit – amortised cost 1 | 172.9 | 97.1 |
SME loans – FVTPL | 120.8 | 1.2 |
Total current | 294.6 | 99.0 |
Total | 307.7 | 118.2 |
13. Trade and other receivables
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Trade receivables | 0.2 | 0.4 |
Other receivables | 6.7 | 4.2 |
Tax-related receivables | 3.7 | 4.8 |
Prepayments | 4.7 | 4.7 |
Accrued income | 4.3 | 5.8 |
Rent and other deposits | 0.9 | 0.9 |
Current trade and other receivables | 20.5 | 20.8 |
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
(2024: £0.9 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.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
14. Trade and other payables
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Trade payables | 0.8 | 1.8 |
Other taxes and social security costs | 7.5 | 7.0 |
Other creditors 1 | 5.9 | 6.5 |
Accruals and deferred income | 16.6 | 12.5 |
30.8 | 27.8 |
1. Other creditors includes £3.7 million (2024: £4.4 million) due to the British Business Bank (“BBB”), primarily related to scheme lender fees collected from
investors associated with government-guaranteed products.
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
| ECL on | |||||
| undrawn | |||||
| Loan | lines of credit | ||||
| Dilapidation | repurchase | Restructuring 1 | and other 2 | Total | |
| £m | £m | £m | £m | £m | |
At 1 January 2024 | 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 |
Additional provision/liability | — | — | — | — | — |
Amount utilised | — | — | — | (0.9) | (0.9) |
Amount reversed | — | — | — | (0.2) | (0.2) |
At 31 December 2025 | 0.6 | — | — | 2.5 | 3.1 |
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Current provisions and other liabilities | 2.5 | 3.6 |
Non-current provisions and other liabilities | 0.6 | 0.6 |
3.1 | 4.2 |
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152
31 December 2025 | 31 December 2024 | |||||
| Fair value | Fair value | |||||
| through | through | |||||
| profit | Amortised | profit | Amortised | |||
| and loss | cost | Total | and loss | cost | Total | |
| £m | £m | £m | £m | £m | £m | |
| Assets | ||||||
SME loans held at amortised cost | — | 2.1 | 2.1 | — | 2.1 | 2.1 |
SME loans held at fair value through profit and loss | 120.8 | — | 120.8 | 1.2 | — | 1.2 |
Lines of credit | — | 172.9 | 172.9 | — | 97.1 | 97.1 |
Investment in trusts and co-investments | 11.9 | — | 11.9 | 1 7.8 | — | 17. 8 |
Trade and other receivables 1 | 0.3 | 11.8 | 12.1 | 0.6 | 10.7 | 11.3 |
Cash and cash equivalents 1 | 84.8 | 67.6 | 152.4 | 136.3 | 51.3 | 187.6 |
217.8 | 254.4 | 472.2 | 155.9 | 161.2 | 317.1 | |
| Liabilities | ||||||
Trade and other payables | — | (6.7) | (6.7) | — | (8.3) | (8.3) |
Bank borrowings | — | (267.3) | (267.3) | — | (101.9) | (101.9) |
Lease liabilities | — | (6.3) | (6.3) | — | (7.6) | (7.6) |
— | (280.3) | (280.3) | — | (117.8) | (117.8) |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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153
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
16. Financial risk management continued
| Fair value measurement using | ||||||
31 December 2025 | 31 December 2024 | |||||
| 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 | — | — | 120.8 | — | — | 1.2 |
| and loss | ||||||
Trade and other receivables | 0.3 | — | — | 0.6 | — | — |
Investment in trusts and co-investments | — | — | 11.9 | — | — | 17. 8 |
Cash and cash equivalents | 84.8 | — | — | 136.3 | — | — |
85.1 | — | 132.7 | 136.9 | — | 19.0 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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154
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 at 1 January 2024 | 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 at 31 December 2024 | 1.2 | 17.8 |
Additions | 180.6 | 0.8 |
Repayments | (51.8) | (8.2) |
Accrual of interest | 2.9 | — |
Net (loss)/gain on the change in fair value of financial instruments at fair value through profit or loss | (8.2) | 1.5 |
Sale of loans | (3.9) | — |
Balance at 31 December 2025 | 120.8 | 11.9 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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155
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
16. Financial risk management continued
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
| Non-current | ||
SME loans held at amortised cost | 1.2 | 1.4 |
Investment in trusts and co-investments | 11.9 | 17.8 |
| Current | ||
SME loans held at amortised cost | 0.9 | 0.7 |
SME loans held at fair value through profit and loss | 120.8 | 1.2 |
Lines of credit | 172.9 | 97.1 |
| Trade and other receivables: | ||
– Trade receivables | 0.2 | 0.4 |
– Other receivables | 6.7 | 4.2 |
– Accrued income | 4.3 | 5.8 |
– Rent and other deposits | 0.9 | 0.9 |
Cash and cash equivalents | 152.4 | 187.6 |
Total gross credit risk exposure | 472.2 | 317.1 |
Less bank borrowings 1 | (267.3) | (101.9) |
Total net credit risk exposure | 204.9 | 215.2 |
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 factors |
| including the latest payment behaviour of the customers, commercial, consumer, financial and commercial | |
| credit data sharing (“CCDS”) data points and observed historical trends. The PD model also includes an | |
| estimate of the expected 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 projecting expected utilisation at default based on observed historical trends. | |
| Loss given default | The Group has developed LGD models tailored to each Term Loan or line of credit product to assess the likely |
| (“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 prepayments and term. |
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156
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
Model component | Change since 31 December 2024 |
PD | The PD is now calculated using a model which takes a number of input variables derived from commercial, |
| consumer, financial and behavioural sources of data, which have been observed to correlate with a default. | |
| These inputs are combined to determine a PD curve for each borrower, with 12-month PD utilised for stage 1 | |
| and lifetime PD for stage 2. The marginal PDs are used to calculate an ECL in each respective forward-looking | |
| period. Previously PD was determined using models that utilised the latest payment behaviour of customers | |
| and observed historical trends to project defaults. | |
| Significant | The definition of significant increase in credit risk (“SICR”) used by the Group has been updated to reference |
| increase in | the relative change in the risk score between origination and the balance sheet date. Previously SICR was |
| credit risk | defined as including any account which was overdue or frozen. This change results in a higher proportion of |
| accounts moving to stage 2 prior to becoming late or defaulting, relative to the previous methodology utilised. | |
| The backstop of 30 days past due remains in place. | |
EAD | The EAD methodology has been refined to take account of analysis of the EAD based on more granular |
| utilisation bands for stage 1 and stage 2. This approach has resulted in more accurate EAD prediction when | |
| back tested against actual results across portfolios compared to the less granular credit conversion factor | |
| approach used previously. | |
LGD | The assumptions behind LGD used for FlexiPay have previously been based on the extrapolation of limited |
| actual recovery data given the relatively small levels of defaults on the portfolio to date. The approach has | |
| been refined to supplement data limitations with substantial Term Loan recovery information, in light of a | |
| shared recovery process between the products at a borrower level and as many FlexiPay borrowers also have | |
| Term Loan products, leading to an improved basis for projecting the LGD until more FlexiPay data becomes | |
| available in future. | |
Macro scenarios | The Group’s macro scenarios previously incorporated just unemployment as a forecast variable to take |
| account of forward-looking information. The Group now utilises UK unemployment rates, the risk-free rate | |
| and GDP as the selected forecast variables, with historically observed coefficients between these variables to | |
| predict insolvencies, instead of solely using unemployment rates previously. Further details are provided later | |
| in this note. |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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157
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
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
Component | Definition/assumption |
| Significant | The Group assumes there has been a significant increase in credit risk if the probability of default indexed |
| increase in | to the risk score of the borrower has increased over given thresholds since origination and the balance sheet |
| credit risk | date. A backstop is applied for any outstanding amounts on the loan investment which exceed 30 days, in line |
| with the rebuttable presumption per IFRS 9. | |
Forecast period | We estimate PD, EAD and LGD for the duration of the lifetime of the Term Loan or line of credit. Term Loans |
| utilise the contractual term of the Term Loan. For lines of credit, the duration of the lifetime is estimated to be | |
| five years. | |
| Definition | The Group defines a default, classified within non-performing, as a loan investment with any outstanding |
| of default | amounts exceeding 90 days past their due date, which reflects the point at which the loan is considered |
| to be credit impaired. In some circumstances where loans are bought back by the Group, the financial asset | |
| associated with the purchase meets the definition of purchased or originated credit impaired (“POCI”); this | |
| element of the impairment is therefore based on lifetime ECLs. | |
| Lines of credit utilise the same default definition and probability of default under IFRS 9; however, they are | |
| assessed based on 12-month probability of default at the overall available line of credit level, estimating the | |
| expected utilisation of the line of credit at the estimated point of default. The expected credit loss impairment | |
| associated with undrawn lines of credit is disclosed within other liabilities in note 15. |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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158
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: | Total | |
| Reconciliation of opening to closing gross carrying amounts | £m | £m | £m | £m | £m |
At 1 January 2024 | 55.8 | 2.0 | 4.3 | 14.7 | 76.8 |
New lending and purchased assets | 467.2 | — | — | — | 467.2 |
Exchange differences | — | — | (0.1) | (0.3) | (0.4) |
Loans transferred between stages | (14.5) | 7.3 | 7.2 | — | — |
Loans repaid | (407.7) | (6.1) | (0.7) | (0.8) | (415.3) |
Written off loans | — | — | — | (0.3) | (0.3) |
Derecognition of assets of discontinued operations | (1.7) | — | (0.3) | (4.7) | (6.7) |
At 31 December 2024 | 99.1 | 3.2 | 10.4 | 8.6 | 121.3 |
New lending and purchased assets | 778.6 | 0.8 | — | 0.9 | 780.3 |
Exchange differences | — | — | — | 0.3 | 0.3 |
Change in SICR definition | (7.2) | 7.2 | — | — | — |
Loans transferred between stages | (25.9) | 15.1 | 10.8 | — | — |
Sale of loans | — | — | — | (4.6) | (4.6) |
Loans repaid | (680.0) | (3.4) | (0.4) | (0.3) | (684.1) |
Written off loans | — | — | (0.4) | (3.7) | (4.1) |
At 31 December 2025 | 164.6 | 22.9 | 20.4 | 1.2 | 209.1 |
| 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 2024 | 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 | (0.1) | (0.2) | (0.8) | 0.6 | (0.5) |
| default assumptions | |||||
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 |
Impairment against new lending and purchased assets | 21.7 | — | — | 0.6 | 22.3 |
Exchange differences | — | — | — | 0.3 | 0.3 |
Change in SICR definition | (0.2) | 3.3 | — | — | 3.1 |
Impairment against loans transferred between stages | (0.7) | 6.9 | 8.5 | — | 14.7 |
Loans repaid | (19.1) | (1.5) | (0.3) | (0.2) | (21.1) |
Impairment provision derecognised related to written off loans | — | — | (0.3) | (3.8) | (4.1) |
Sale of loans | — | — | — | (4.6) | (4.6) |
| Change in probability of default or loss given | 3.6 | (5.3) | 2.9 | 0.2 | 1.4 |
| default assumptions | |||||
At 31 December 2025 | 8.1 | 4.8 | 20.2 | 1.0 | 34.1 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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159
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
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 | |
| 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 | ||
| At 31 December 2025 | |||||
Stage 1 – Performing | 4.9 | 12-month ECL | 164.6 | (8.1) | 156.5 |
Stage 2 – Underperforming | 21.0 | Lifetime ECL | 22.9 | (4.8) | 18.1 |
Stage 3 – Non-performing | 99.0 | Lifetime ECL | 20.4 | (20.2) | 0.2 |
POCI | 83.3 | Lifetime ECL | 1.2 | (1.0) | 0.2 |
Total | 209.1 | (34.1) | 175.0 |
| 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 |
| 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 | ||
| At 31 December 2025 | |||||
Stage 1 – Performing | 4.9 | 12-month ECL | 162.6 | (8.0) | 154.6 |
Stage 2 – Underperforming | 21.0 | Lifetime ECL | 22.9 | (4.8) | 18.1 |
Stage 3 – Non-performing | 99.0 | Lifetime ECL | 19.6 | (19.4) | 0.2 |
POCI | — | Lifetime ECL | — | — | — |
Total | 205.1 | (32.2) | 172.9 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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160
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 (average | 2026 | 2027 | 2028 | 2029 | 2030 | |
for the forecast year) | ECL scenario | % | % | % | % | % |
Unemployment rates | Base case | 5.0 | 4.8 | 4.5 | 4.4 | 4.2 |
Risk-free rate | Base case | 3.5 | 3.0 | 2.8 | 2.5 | 2.5 |
GDP YoY | Base case | 1.0 | 1.4 | 1.5 | 1.5 | 1.5 |
| Probability weighting applied at | Probability weighting applied at | |
| 31 December 2025 | 31 December 2024 | |
| ECL scenario | % | % |
Base case | 70 | 60 |
Upside | 15 | 10 |
Downside | 15 | 30 |
| Lines of credit net carrying amount | |||||
| 31 December 2025 | |||||
| Stage 1 | Stage 2 | Stage 3 | POCI | Total | |
| Risk banding | £m | £m | £m | £m | £m |
Higher risk banding | 48.7 | 17.4 | 0.2 | — | 66.3 |
Medium risk banding | 51.0 | 0.5 | — | — | 51.5 |
Lower risk banding | 54.9 | 0.2 | — | — | 55.1 |
Total | 154.6 | 18.1 | 0.2 | — | 172.9 |
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161
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
16. Financial risk management continued
Financial risk factors continued
Credit risk continued
Credit risk quality of lines of credit continued
| Lines of credit net carrying amount | |||||
| 31 December 2024 | |||||
| Stage 1 | Stage 2 | Stage 3 | POCI | Total | |
| Risk banding | £m | £m | £m | £m | £m |
Higher risk banding | 37.6 | 1.3 | 0.5 | — | 39.4 |
Medium risk banding | 27.2 | 0.3 | 0.5 | — | 28.0 |
Lower risk banding | 29.5 | 0.2 | — | — | 29.7 |
Total | 94.3 | 1.8 | 1.0 | — | 97.1 |
| 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 2025 | £m | £m | £m | £m | £m | £m | £m |
| Financial liabilities | |||||||
Trade and other payables | (6.7) | — | — | — | (6.7) | — | (6.7) |
Bank borrowings | — | (267.3) | — | — | (267.3) | — | (267.3) |
Lease liabilities | (0.5) | (1.4) | (5.5) | — | (7.4) | 1.1 | (6.3) |
(7.2) | (268.7) | (5.5) | — | (281.4) | 1.1 | (280.3) |
| 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) |
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) |
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162
16. Financial risk management continued
Financial risk factors continued
Liquidity risk continued
Less than 3 months | Between 3 months and 1 year | Between 1 and 5 years | ||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
| At 31 December | £m | £m | £m | £m | £m | £m |
| Fixed rate | ||||||
SME loans at amortised cost | 0.3 | 0.2 | 0.1 | 0.1 | 1.7 | 1.8 |
Investment in trusts and co-investments | — | — | — | — | 11.9 | 17.8 |
Lines of credit | 52.0 | 42.6 | 96.9 | 47.3 | — | — |
SME loans fair value through profit and loss 1 | 3.4 | 0.7 | 75.0 | — | 42.4 | 0.5 |
| Floating rate | ||||||
Lines of credit 2 | 24.0 | 7.2 | — | — | — | — |
Cash and cash equivalents | 152.4 | 187.6 | — | — | — | — |
Bank borrowings 2 | — | — | (267.3) | (101.9) | — | — |
232.1 | 238.3 | (95.3) | (54.5) | 56.0 | 20.1 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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163
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
16. Financial risk management continued
Financial risk factors continued
Market risk continued
b) Interest rate risk continued
Interest rate risk sensitivity analysis – non-trading interest (floating rate) continued
31 December 2025 | 31 December 2024 | |||||
| GBP | EUR | Total | GBP | EUR | Total | |
| £m | £m | £m | £m | £m | £m | |
Cash and cash equivalents | — | — | — | — | — | — |
Intra-group assets | — | 0.1 | 0.1 | — | 0.1 | 0.1 |
Intra-group liabilities | — | (0.7) | (0.7) | — | (0.5) | (0.5) |
Appreciation in pound sterling | Depreciation in pound sterling | |||||||
| Income | Income | Income | Income | |||||
| statement | Equity | statement | Equity | statement | Equity | statement | Equity | |
| 2025 | 2025 | 2024 | 2024 | 2025 | 2025 | 2024 | 2024 | |
| At 31 December | £m | £m | £m | £m | £m | £m | £m | £m |
US dollars | — | — | — | — | — | — | — | — |
Euros | — | (1.1) | — | (1.0) | — | 0.9 | — | 0.8 |
— | (1.1) | — | (1.0) | — | 0.9 | — | 0.8 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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164
16. Financial risk management continued
Financial risk factors continued
Market risk continued
d) Foreign exchange risk continued
| 31 December | 31 December | 31 December | 31 December | |
| 2025 | 2025 | 2024 | 2024 | |
| Number | £ | Number | £ | |
| Called up, allotted and fully paid | ||||
Ordinary shares of £0.001 at beginning of the year | 327,935,7 79 | 327,936 | 361,303,143 | 361,303 |
Share buybacks and cancellations | (23,194,203) | (23,194) | (33,367,364) | (33,367) |
Ordinary shares of £0.001 at end of the year | 304,741,576 | 304,742 | 327,9 35 ,779 | 327, 93 6 |
| 2025 | 2024 | |
| £m | £m | |
At 1 January | 0.1 | 293.1 |
Exercise of options – proceeds received | 0.4 | 0.5 |
Capital reduction | — | (293.5) |
At 31 December | 0.5 | 0.1 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
165
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
19. Foreign exchange reserve
| £m | |
At 1 January 2024 | 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 |
Exchange difference on translating the net assets of foreign operations | — |
At 31 December 2025 | 5.3 |
Exchange differences relating to the translation of the net assets of the Group’s subsidiaries from their functional currency into
the Company’s functional currency are recognised directly in the foreign exchange reserves within equity.
20. (Accumulated losses)/retained earnings
| £m | |
At 1 January 2024 | (84.9) |
Transfer of share option costs | 6.6 |
Buyback of own shares | (33.6) |
Capital reduction | 293.5 |
Loss for the year | 8.6 |
At 31 December 2024 | 190.2 |
Transfer of share option costs | 4.2 |
Buyback of own shares | (30.6) |
Purchase of own shares by EBT | (8.6) |
Capital reduction | — |
Loss for the year | 46.0 |
At 31 December 2025 | 201.2 |
The transfer of share option costs is in relation to the exercise of share options during the year and their associated costs in the
share options reserve which are transferred to (accumulated losses)/retained earnings.
During the year ended 31 December 2025, £8.6 million (2024: £nil) of ordinary shares were purchased by the EBT for the
purposes of satisfying employee share option plans. The number of shares purchased was 7.7 million and the weighted average
purchase price excluding fees and stamp duty was £1.21 (2024: nil and £nil). All shares have a nominal value of £0.001.
The Group commenced a share buyback programme in March 2024 to buy up to £25.0 million of shares in order to return value
to shareholders, with shares being cancelled. In October 2024 the Group extended the share buyback programme by a further
£25.0 million. In May 2025 this was extended by a further £25.0 million and the programme modified to allow for share cancellation
or to be held in treasury. The nominal cost of the shares cancelled reduces the Group’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.
Cumulatively since the buyback programmes launched in March 2024 58.9 million shares have been purchased and 56.6 million
shares have been cancelled, representing 16.3% and 15.7% respectively of the called up share capital at the launch of the first
programme for a total cumulative cost of £64.3 million inclusive of fees and expenses.
In the year to 31 December 2025, 23.0 million shares were bought back and cancelled (2024: 33.5 million shares) for
consideration of £27.6 million (2024: £33.7 million) inclusive of fees and expenses under the programme representing 7.0%
(2024: 9.3%) of the called up share capital at the start of the year. 0.2 million of the purchased shares in the previous year were
pending cancellation as at 31 December 2024. Additionally, the Group bought back 2.3 million shares which were not cancelled
and were held in treasury for consideration of £3.0 million inclusive of fees and expenses, representing 0.7% of the called up
share capital at the start of the year. Of these shares, 83,440 were pending transfer to the Group at 31 December 2025.
The weighted average purchase price for the combined buybacks in the year including those that were cancelled and held
in treasury was £1.23 (2024: £1.16) excluding fees and stamp duty.
On 12 December 2024, the Group completed a capital reduction exercise under section 641 of the Companies Act 2006. As a
result, the entire share premium balance at that date of £293,486,755 was cancelled and created an accumulated profit within
the Group’s profit and loss account and now constitutes a distributable reserve.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
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STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
167
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
21. Share-based payment continued
Post-IPO employee share plans continued
Post-IPO – DBP
Form of PSP Awards
The Board grants awards in the form of nil-cost options.
Performance conditions
There are no performance conditions attached to DBP Awards.
Vesting and release of PSP Awards
DBP Awards granted to employees currently vest in accordance with a vesting schedule set at grant. Further details are shown
in the Remuneration Report.
The Board may determine at grant that a DBP 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
DBP 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).
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.
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
£5.9 million (2024: £7.8 million) that arises from transactions accounted for as equity-settled share-based payment transactions
from continuing operations and £nil (2024: £1.0 million) from discontinued operations. Additionally, an exceptional credit of £nil
(2024: £1.7 million) is included within discontinued operations relating to lapses of share-based payments on the sale of the
US business.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
168
21. Share-based payment continued
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 | 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 |
| at 1 January | ||||||||||||
| 2024 | ||||||||||||
| Granted | — | — | — | — | 469,010 | — | 12,313,814 | — | — | — | 12,782,824 | — |
during the year | ||||||||||||
| Exercised | (45,300) | 0.024 | (951,535) | 0.360 | (826,552) | — | (6,733,720) | — | (741,224) | 0.294 | (9,298,331) | 0.061 |
during the year | ||||||||||||
| Forfeited | — | — | (141) | 0.440 | (717,4 80) | — | (13,159,091) | — | (16,093) | 0.245 | (13,892,805) | — |
during the year | ||||||||||||
| Outstanding | — | — | 3,670,915 | 0.319 | 3,317,612 | — | 25,961,542 | — | 2,015,033 | 0.480 | 34,965,102 | 0.072 |
| at 31 | ||||||||||||
| December | ||||||||||||
| 2024 | ||||||||||||
| Free shares | ||||||||||||
| Unapproved | and matching | US Options | ||||||||||
| PSP 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 | — | — | 3,670,915 | 0.319 | 3,317,612 | — | 25,961,542 | — | 2,015,033 | 0.480 | 34,965,102 | 0.072 |
| at 1 January | ||||||||||||
| 2025 | ||||||||||||
| Granted | 5,775,755 | — | — | — | 240,290 | — | 3,920,954 | — | — | — | 9,936,999 | — |
during the year | ||||||||||||
| Exercised | — | — | (207,251) | 0.318 | (638,215) | — | (4,584,403) | — | (1,182,312) | 0.301 | (6,612,181) | 0.060 |
during the year | ||||||||||||
| Forfeited | (365,337) | — | (61,171) | 0.284 | (302,528) | — | (4,345,118) | — | (13,975) | 0.440 | (5,088,129) | 0.005 |
during the year | ||||||||||||
| Outstanding | 5,410,418 | — | 3,402,493 | 0.320 | 2,617,159 | — | 20,952,975 | — | 818,746 | 0.740 | 33,201,791 | 0.062 |
| at 31 | ||||||||||||
| December | ||||||||||||
| 2025 | ||||||||||||
1. Weighted average exercise price.
The following table summarises information about the share awards outstanding at 31 December 2025:
| Free shares | ||||||||||||
| Unapproved | and matching | US Options | ||||||||||
| PSP 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 | Years | Number | Number | Years | Years | Number |
£0–£0.008 | 5,410,418 | 9.5 | 2.5 | 2,153,314 | — | 2,617,1 59 | 7.5 | 20,952,975 | — | — | 6.8 | 31,119,891 |
£0.009–£0.176 | — | — | — | — | — | — | — | — | — | — | — | — |
£0.177–£0.471 | — | — | 1.8 | 879,203 | — | — | — | — | 261,435 | 2.5 | 1.9 | 1,154,613 |
| £0.472–£1.75 | — | — | 2.4 | 369,976 | — | — | — | — | 557,311 | 2.6 | 2.5 | 927,287 |
5,410,418 | 9.5 | 2.3 | 3,402,493 | — | 2,617,159 | 7.5 | 20,952,975 | 818,746 | 2.5 | 6.6 | 33,201,791 | |
1. Weighted average remaining contractual life.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
169
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
21. Share-based payment continued
Movements in share plans continued
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 | |||||||
| Number and | ||||||||||||
Range of exercise | WARCL 1 | Number and WARCL | Number and WARCL | Number and WARCL | Number and WARCL | Number and WARCL | ||||||
| prices | Number | Years | Years | Number | Years | Number | Years | Number | Number | Years | Years | Number |
£0–£0.008 | — | — | 3.4 | 2,190,017 | — | 3,317,612 | 8.0 | 25,961,542 | — | — | 6.8 | 31,469,171 |
£0.009–£0.176 | — | — | — | 2,033 | — | — | — | — | — | — | — | 2,033 |
£0.177–£0.471 | — | — | 2.6 | 1,110,227 | — | — | — | — | 1,417,6 50 | 0.9 | 1.7 | 2,527,877 |
| £0.472–£1.75 | — | — | 3.4 | 368,638 | — | — | — | — | 597,38 3 | 3.4 | 3.4 | 966,021 |
— | — | 3.2 | 3,670,915 | — | 3,317,612 | 8.0 | 25,961,542 | 2,015,033 | 1.7 | 6.4 | 34,965,102 | |
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, if these awards have no performance conditions or if the performance condition
is an underpin, as in the RSP Awards granted to Executive Director between 2021 and 2024.
For LTIP Awards with performance conditions, such as those granted under the PSP Awards granted in 2025, the fair value
is determined based on the performance conditions attached to them, in accordance with IFRS 2 Share-based Payments.
Our PSP Awards are subject to a combination of market-based and non-market-based conditions.
The weighting of these conditions is as follows: 60% of the award is subject to the Relative Total Shareholder Return (“TSR”)
condition (market based), and 40% is subject to the profit before tax (“PBT”) condition (non-market based).
1. Market-based condition (Relative TSR - 60%-weighting)
The fair value of the portion of awards subject to the Relative TSR condition is determined at the grant date by using a Monte
Carlo simulation model. This complex option pricing model incorporates the effect of the market condition directly into the fair
value calculation.
Consequently, the calculated fair value is expensed over the vesting period, irrespective of whether the market performance
condition is ultimately met, provided that all non-market service conditions are satisfied. No adjustments are made to the
recognised expense after the grant date for changes in the probability of achieving the Relative TSR target.
2. Non-market-based condition (profit before tax - 40%-weighting)
The fair value of the portion of awards subject to the PBT condition is based on the Company’s share price at the grant date.
Since this is a non-market condition, it does not impact the fair value of the equity instrument itself.
Instead, the number of awards expected to vest is estimated at the grant date and is revised at each subsequent reporting date.
Initially, management assumes a 50% probability of vesting for the PBT-weighted awards. This estimate is then reviewed and
updated to reflect the Company’s current assessment of the probability of achieving the PBT targets, based on the latest internal
forecasts of PBT and management’s judgement regarding future financial performance. Adjustments to the cumulative expense
are recognised in the statement of comprehensive income in the period of the revision.
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 CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
170
22. Notes to the consolidated statement of cash flows
Cash outflow from operating activities
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
| Profit before taxation | ||
Continuing operations | 20.3 | 0.8 |
Discontinued operations | — | 8.4 |
Total operations | 20.3 | 9.2 |
| Adjustments for: | ||
Depreciation of property, plant and equipment | 2.3 | 3.2 |
Amortisation of intangible assets | 8.7 | 9.8 |
Modification gain | — | (0.4) |
| Impairment of property, plant and equipment, intangible assets, ROU assets and investment | 0.1 | 0.9 |
| in sublease | ||
Impairment of intangibles (exceptional item) | — | 0.3 |
Interest payable | 0.6 | 0.8 |
| Non-cash employee benefits expense – share-based payments and associated | 5.0 | 8.1 |
| social security costs | ||
Fair value adjustments | 6.7 | (6.4) |
Movement in loan repurchase liability | — | (0.1) |
Movement in other provisions | (1.1) | 1.7 |
Share of gains of associates | — | — |
ECL impairment | 18.3 | 8.7 |
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 | 1.4 | (0.2) |
| Changes in working capital | ||
Movement in trade and other receivables | (11.4) | (3.1) |
Movement in trade and other payables | 2.5 | (26.6) |
Tax received/(paid) | 2.1 | (0.1) |
Originations of lines of credit | (771.4) | (467.0) |
Cash receipts from lines of credit | 682.1 | 412.3 |
Net cash outflow from operating activities | (33.8) | (67.4) |
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Cash and cash equivalents | 152.4 | 187.6 |
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Funding Circle Holdings plc | Annual Report and Accounts 2025
171
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
22. Notes to the consolidated statement of cash flows continued
| 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) |
| Derecognition | ||||||
| of liabilities | ||||||
| related to | ||||||
| 1 January | Exchange | Other non-cash | discontinued | 31 December | ||
| 2025 | Cash flow | movements | movements | operations | 2025 | |
| £m | £m | £m | £m | £m | £m | |
Bank borrowings | (101.9) | (165.4) | — | — | — | (267.3) |
Lease liabilities | (7.6) | 1.9 | — | (0.6) | — | (6.3) |
Liabilities from financing activities | (109.5) | (163.5) | — | (0.6) | — | (273.6) |
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 | |
| 2025 | 2024 | |
| £m | £m | |
Lease payments under operating leases recognised as an expense in the year 1 | — | 0.2 |
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 £nil (2024: £0.1 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.
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Salaries and short-term benefits | 5.3 | 5.0 |
Equity-based compensation | 2.4 | 1.3 |
Post-employment benefits | 0.1 | 0.1 |
7.8 | 6.4 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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172
25. Related party transactions continued
26. Ultimate controlling party
In the opinion of the Directors, the Group does not have a single ultimate controlling party.
28. Subsequent events
Sale of shorter-term loans and signing of forward flow agreement
The shorter-term loans held by the Group were held at a fair value of £120.4 million at 31 December 2025 (2024: £nil).
Subsequent to the balance sheet date, in January 2026 an agreement was signed to sell the loans to a third party, alongside
the signing of a forward flow agreement for the go forward origination of the product by the third party via the platform model.
The loans were sold with an economic cut-off date of 31 December 2025, for an amount materially aligned with their fair value
at the balance sheet date. The sale of the loans is not considered an adjusting balance sheet event as the contract was not
signed nor certain as of that date.
| 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 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 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
173
Notes forming part of the consolidated
financial statements continued
for the year ended 31 December 2025
29. Interests in other entities continued
| Proportion of | Directly/ | |||
| Place of | ownership | indirectly | ||
| Associate entity name | incorporation | interest | held | Registered office address |
Funding Circle UK SME Direct Lending Fund¹ | Ireland | 8% | Indirectly | 70, Sir John Rogerson’s Quay, Dublin 2, Ireland |
| 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 | |
| 2025 | 2024 | |
| Summarised balance sheet (Group’s share) | £m | £m |
Non-current assets | — | 0.4 |
Current assets | 0.2 | 0.2 |
Current liabilities | (0.2) | — |
Non-current liabilities | — | — |
Net assets | — | 0.6 |
| Funding Circle | Funding Circle | |
| UK SME Direct | UK SME Direct | |
| Lending Fund I | Lending Fund I | |
| 31 December | 31 December | |
| 2025 | 2024 | |
| £m | £m | |
Opening net assets as at 1 January | 7.2 | 18.3 |
(Loss)/profit for the year | (0.4) | 0.4 |
Capital redemptions in the year | (6.8) | (11.1) |
Dividends paid in the year | — | (0.4) |
Closing net assets as at 31 December | — | 7.2 |
Group’s share in % | 8.3% | 8.3% |
Group’s share of net assets as at 31 December | — | 0.6 |
Accounting policy alignment | — | — |
Group’s carrying amount | — | 0.6 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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174
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 | |
| 2025 | 2024 | |
| Summarised statement of comprehensive income (Group’s share) | £m | £m |
Gross income | — | 0.1 |
(Loss)/profit for the year | — | — |
Other comprehensive income | — | — |
Total comprehensive income | — | — |
Dividends received from associates | — | — |
Capital redemptions received from associates | 0.6 | 0.9 |
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 Focal Point Lending | Subsidiary via which CBILS loans are originated and which holds legal title to loans |
| Limited | which are held via trust structures for the beneficial ownership of institutional investors. |
| Funding Circle Eclipse Lending | Subsidiary via which RLS loans are originated and which holds legal title to loans which |
| Limited | are held via trust structures for the beneficial ownership of institutional investors. |
| Funding Circle Polaris Lending | Subsidiary via which RLS and GGS loans are originated and which holds legal title to loans |
| Limited | which are held via trust structures for the beneficial ownership of institutional investors. |
Funding Circle Deutschland GmbH | Operated the Funding Circle platform in Germany and services loans. |
Funding Circle Nederland B.V. | Operated the Funding Circle platform in the Netherlands and services loans. |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
175
Company balance sheet
as at 31 December 2025
Note
31 December
2025
£m
31 December
2024
£m
Non-current assets
Investments in subsidiary undertakings 5 261.6 258.2
261.6 258.2
Current assets
Loans due from subsidiary undertakings 7 0.1 0.1
Trade and other receivables 2, 6 0.4 0.6
Cash and cash equivalents 2, 11 57.9 97.2
58.4 97.9
Total assets 320.0 356.1
Current liabilities
Trade and other payables 2, 8 2.8 2.4
Total liabilities 2.8 2.4
Equity
Share capital 9 0.3 0.3
Share premium account 9 0.5 0.1
Share options reserve 21.1 20.6
Retained earnings 10 295.3 332.7
Total equity 317.2 353.7
Total equity and liabilities 320.0 356.1
The Company’s loss for the year was £2.4 million (2024: profit of £26.2 million).
The financial statements on pages 176 to 186 were approved by the Board and authorised for issue on 5 March 2026 . They were
signed on behalf of the Board by:
Tony Nicol
Director
Company registration number 07123934
The notes on pages 179 to 186 form part of these financial statements.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
176
Company statement of changes
in equity
for the year ended 31 December 2025
Note
Share
capital
£m
Share premium
account
£m
Share options
reserve
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1 January 2024 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 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
Profit and total comprehensive income
for the year
10 — — — (2.4) (2.4)
Transactions with owners
Transfer of share option costs 10 — — (4.2) 4.2 —
Issue of share capital/exercise of share options 9 — 0.4 — — 0.4
Purchase of own shares by EBT 10 — — — (8.6) (8.6)
Buyback of own shares 1, 10 — — — (30.6) (30.6)
Employee share schemes
– value of employee services
— — 4.7 — 4.7
Balance at 31 December 2025 0.3 0.5 21.1 295.3 317.2
The notes on pages 179 to 186 form part of these financial statements.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
177
Company statement of cash flows
for the year ended 31 December 2025
Note
31 December
2025
£m
31 December
2024
£m
Net cash (outflow)/inflow from operating activities 11 (0.5) 1.0
Investing activities
Loans advanced to subsidiary undertakings 7 — —
Repayment of loans and receivables from subsidiary undertakings 12 — 49.8
Capital redemptions from subsidiary undertakings 5 — 0.8
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
Financing activities
Proceeds on the issue of shares from the exercise of share options 0.4 0.5
Purchase of own shares by EBT (8.6) —
Buyback of own shares (30.6) (33.7)
Net cash outflow from financing activities (38.8) (33.2)
Net (decrease)/increase in cash and cash equivalents (39.3) 49.0
Cash and cash equivalents at the beginning of the year 97.2 48.2
Cash and cash equivalents at the end of the year 11 57.9 97.2
The notes on pages 179 to 186 form part of these financial statements.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
178
Notes forming part of the Company
financial statements
for the year ended 31 December 2025
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 192.
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 loss for the year of £2.4 million (2024:
comprehensive profit of £26.2 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 2027). See the Going
Concern Statement on pages 70 and 128.
Significant changes in the current reporting year
Share buyback programme extension and purchase of own
shares (note 10)
The share buyback programme which was launched in 2024
was further extended in May 2025 to buy and cancel up
to a further £25 million of shares in order to return value
to shareholders. 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 2025, 23.0 million shares
(2024: 33.5 million) were purchased and cancelled for
consideration of £27.6 million (2024: £33.7 million) inclusive
of fees and expenses under the programme. Additionally, the
Company bought back 2.3 million shares (2024: nil) which
were not cancelled and were held in treasury for consideration
of £3.0 million (2024: £nil).
Additionally, the Company purchased 7.7 million shares
(2024: nil) for £8.6 million (2024: £nil) during the year ended
31 December 2025, which were not cancelled and are held
for the purpose of satisfying the exercise of employee
share options.
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 2025.
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.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
179
Notes forming part of the Company
financial statements continued
for the year ended 31 December 2025
2. Financial risk management continued
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 2025:
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 0.6 0.6 57.3 57.3
0.9 0.9 57.3 57.3
Liabilities
Trade and other payables (0.1) (0.1) — —
(0.1) (0.1) — —
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.
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 — — — —
— — — —
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.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
180
2. Financial risk management continued
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
2025
£m
31 December
2024
£m
Current
Loans due from related undertakings 0.1 0.1
Trade and other receivables:
– Amounts due from related undertakings — 0.1
– Accrued interest 0.2 0.4
Cash and cash equivalents 57.9 97.2
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 2025 and 31 December 2024 is as follows:
At 31 December 2025
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 57.9 — — —
Loans due from related undertakings 0.1 — — —
58.2 — — —
Financial liabilities
Trade and other payables (0.1) — — —
(0.1) — — —
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 — — — —
— — — —
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
181
Notes forming part of the Company
financial statements continued
for the year ended 31 December 2025
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 to fall in the near term. A 100 bps decrease in base rates could decrease the annual interest earned
by c.£0.6 million (2024: 200 bps decrease and c.£2.0 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 of the Group including the Company is disclosed in note 16 to the consolidated financial statements. The
Company’s individual foreign currency translation risk and exposure is considered immaterial as at 31 December 2025.
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 which 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 financial statements 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 (loss)/profit for the year
The Company made a comprehensive loss for the year of £2.4 million (2024: comprehensive profit of £26.2 million).
4. Employees
The Company had no employees during the current or prior year other than Directors who numbered eight (2024: 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 £2.4 million (2024: £1.9 million) for salary and short-term benefits
and £1.3 million (2024: £0.7 million) for equity-based compensation. For further information, see the Remuneration Report
on page 103.
5. Investments in subsidiary undertakings
2025
£m
2024
£m
Balance at 1 January 258.2 310.6
Capital contribution regarding employee services in subsidiaries 3.4 2.6
Return of capital — (50.6)
Disposal of investment in subsidiary — (4.4)
Balance at 31 December 261.6 258.2
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
182
5. Investments in subsidiary undertakings continued
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 2025:
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 258.2 3.4 — — — — 261.6 —
Funding Circle Global Partners
Limited
— — — — — — — 0.7
Funding Circle CE — — — — — — — —
Total 258.2 3.4 — — — — 261.6 0.7
Year ended 31 December 2024:
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 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
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.
During the year the Company received £nil cash capital redemptions (2024: £0.8 million) and £0.7 million cash dividends
(2024: £1.0 million) from Funding Circle Global Partners Limited. The Company received £nil non-cash capital redemptions
(2024: £49.8 million) 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 £3.4 million (2024: £2.6 million), representing the
service cost for the employees of its subsidiaries, under the Company’s share option schemes.
The cumulative amount of impairment losses in relation to investment in subsidiaries is £80.2 million (2024: £80.2 million).
There were no indicators of further impairment as at 31 December 2025.
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
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Funding Circle Holdings plc | Annual Report and Accounts 2025
183
Notes forming part of the Company
financial statements continued
for the year ended 31 December 2025
6. Trade and other receivables
31 December
2025
£m
31 December
2024
£m
Amounts due from related undertakings — 0.1
Prepayments 0.2 0.1
Accrued income 0.2 0.4
0.4 0.6
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
7. Loans due from subsidiary undertakings
31 December
2025
£m
31 December
2024
£m
Stichting Derdengelden Funding Circle 0.1 0.1
Current portion 0.1 0.1
Amount due from Group undertakings
31 December 2025 31 December 2024
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
— — — — — — — —
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 are repayable with the principal amount at the end of the facility’s 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
2025
£m
31 December
2024
£m
Accruals 1.4 1.3
Taxes and social security costs 1.3 1.1
Other creditors — —
Amounts due to related undertakings 0.1 —
2.8 2.4
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
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9. Share capital and share premium account
The movement on these items is disclosed in notes 17 and 18 to the consolidated financial statements.
10. Retained earnings
£m
At 1 January 2024 40.0
Transfer of share option costs 6.6
Buyback of own shares (33.6)
Capital reduction 293.5
Profit for the year 26.2
At 31 December 2024 332.7
Transfer of share option costs 4.2
Buyback of own shares (30.6)
Purchase of own shares by EBT (8.6)
Loss for the year (2.4)
At 31 December 2025 295.3
Details related to the buyback of own shares and purchase of own shares are disclosed in note 20 of the consolidated
financial statements.
11. Notes to the Company statement of cash flows
Cash (outflow)/inflow from operating activities
Year ended
31 December
2025
£m
Year ended
31 December
2024
£m
(Loss)/profit before taxation (2.4) 26.2
Adjustments for:
Non-cash employee benefits expense – share-based payments 1.6 1.4
Net proceeds from sale of US subsidiary (see note 5) — (25.9)
Changes in working capital
Movement in trade and other receivables 0.3 (0.3)
Movement in trade and other payables — (0.4)
Net cash (outflow)/inflow from operating activities (0.5) 1.0
Cash and cash equivalents
2025
£m
2024
£m
Balance at 1 January 97.2 48.2
Cash flow (39.3) 49.0
Balance at 31 December 57.9 97.2
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 2025, money
market funds totalled £57.3 million (2024: £96.3 million).
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185
Notes forming part of the Company
financial statements continued
for the year ended 31 December 2025
12. Related parties
Amounts owed by related parties Amounts owed to related parties
31 December
2025
£m
31 December
2024
£m
31 December
2025
£m
31 December
2024
£m
Short-term (payables)/receivables
Funding Circle Ltd — 0.1 (0.1) —
Intercompany loans
Stichting Derdengelden Funding Circle 0.1 0.1 — —
0.1 0.2 (0.1) —
During the year, the Company made payment of expenses for amounts of £0.8 million (2024: made payment of expenses for
amounts of £0.1 million) from Funding Circle Ltd.
During the year, the Company received a return of capital of £nil (2024: £0.8 million) from Funding Circle Global Partners Limited
and dividends of £0.7 million (2024: £1.0 million).
During the previous year ended 31 December 2024, 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 (2024: £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
Made To Do More Limited 10575978
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.
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.
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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.
The Group has discontinued the used of the non-GAAP measure of Adjusted EBITDA, which was defined as profit/loss for the
year before finance costs (being the discount unwind on lease liabilities), taxation, depreciation, amortisation and impairments
(“AEBITDA”), and additionally excluded share-based payment charges and associated social security costs, foreign exchange
and exceptional items. The Group discontinued the measure in order to simplify reporting metrics and focus on profit-based
measures.
APM
Closest equivalent
IFRS measure
Adjustments to reconcile
to IFRS measure Definition
Income statement
Profit/(loss) before
tax (before
exceptional items)
Profit before tax. Refer to Financial
Review.
Profit for the year before taxation and exceptional
items.
Adjusted earnings
per share from
continuing
operations
Earnings per share. Refer to note 9. Adjusted earnings per share from continuing
operations excludes the impact of exceptional items
and excludes the impact of recognition of deferred tax
assets from the profit for the year used in the
calculation of EPS.
Adjusted EBITDA EBITDA, while not
defined under IFRS, is a
widely accepted profit
measure.
Measure is discontinued
and therefore not
reconciled in this report.
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.
The Group primarily uses profit before tax in its
resource allocation and decision making and has
therefore discontinued disclosing AEBITDA as an
additional non-GAAP measure.
Cash flow
Unrestricted free
cash flow
Cash generated from
operating activities.
Refer to Financial
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.
This excludes restricted cash.
Alternative performance measures
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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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.
Assets under
Management (“AuM”)
The total value of Term Loan outstanding principal and interest from borrowers; includes amounts that
are overdue (delinquencies), but not loans that have defaulted and excludes unallocated cash collections.
Also includes drawn lines of credit balances along with Cashback 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.
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.
Borrowers Actual or prospective borrowers participating on the Group’s lending platform.
Cashback card Cashback card refers to Funding Circle’s Cashback business credit card offering launched in H2 2024.
Cardholders can spend and earn 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 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.
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 SMEs and is currently available in the UK.
Glossary
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188
Term Definition
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”)
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.
Invested capital excludes operational buybacks of loans the Group may continue to hold.
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.
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.
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.
Securitisation The process by which multiple loans are pooled and packaged into interest-bearing securities (bonds).
Segment The principal reporting segments of our operations, representing the divisional structure through which
the business is currently managed, namely Term Loans and FlexiPay being the continuing operations
segments and US Term Loans being the discontinued operation segment, presented separately in
discontinued operations.
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% p.a. 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 the
London Interbank Offer Rate (“LIBOR”).
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 or warehoused loans.
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Term Definition
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
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190
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 5 March 2026
Annual Report published April 2026
Annual General Meeting 21 May 2026
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 2025 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, any
shares or other securities in the Company, and nothing
in this report should be construed as a profit forecast.
Shareholder information
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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191
Directors
Executive Directors
L Jacobs (Chief Executive Officer)
T Nicol (Chief Financial Officer)
Non-Executive Directors
K Stannard (Chair)
H W Nelis
N A Rimer
H Beck
M A Byrne
R J Harvey
Company Secretary
S Whiteley
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
Company information
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Funding Circle Holdings plc
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Funding Circle Holdings plc | Annual Report and Accounts 2025