Funding Circle Holdings (LON:FCH) is a peer-to-peer marketplace lender that connects business owners with secured loans and other business financing options.

The fintech company was founded in the aftermath of the global financial crisis, when small businesses struggled to access finance through traditional channels. The group has a lofty ambition to transform the SME borrowing experience by leveraging its technology platform and machine learning capabilities.

It sounds promising, but this disruptive fintech company has had an extremely rocky start to listed life. After listing at a valuation of about £1.5bn in 2018, the market cap collapsed to less than £100m which, at the time, was less than the amount of cash on its balance sheet.

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Such a performance suggests deep skepticism from the market. The truth is that since its formation in 2010, people have questioned the through-cycle viability of the business model here. This disruptive area also brings regulatory risk and a lack of transparency, with many similar businesses failing to last the distance.

And yet, Funding Circle remains. In fact, it has prospered over the past year, playing a vital role in providing funds to small and medium sized enterprises (SMEs).

It was one of the first FinTech platforms to become accredited to PPP in the US and CBILS in the UK. It was then able to provide these emergency loans quickly in pressing circumstances thanks to its recently developed Instant Decision Lending technology.

But how sustainable are the group’s revitalised results, helped as they are by an unprecedented influx of government-backed emergency loans to businesses? These government initiatives are tapering off, which presents a significant strategic challenge.

The StockRank jumped recently from 26 to 79, but whether this is off the back of a one-off boost or a more definitive inflection point in profitability remains to be seen…

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What are the company's principal business activities, how does it generate its revenues?

Funding Circle connects lenders and SME borrowers through its machine learning and technology platform. It originates loans, earns transaction fees on loans advanced to SMEs, and gets ongoing fees after that. External investors provide the funds, so the platform sits in the middle.

Since 2010 it has built up this decision oriented platform which, it says, enables a faster and more customisable borrower experience. Loan applications take an average of six minutes to complete, while…

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