One of the UK’s biggest small business lenders said it had seen “heightened demand” for loans as it reported a rise in sales.

London-listed Funding Circle saw a 33% increase in loans originations during 2024 to top £1.4bn. The company said it had also saw “rapid adoption” of its shorter-term lending product, FlexiPay, with transactions more than doubling to £492m.

The firm posted a 12% rise in revenues over the period to £142.6m, alongside a small profit of £800k, turning around a loss of £9.9m the prior year.

“The start of 2024 saw heightened demand from borrowers which normalised in the second quarter,” the firm said.

We did experience more subdued demand over the summer months when businesses were awaiting the new government’s October Budget, and we then saw demand pick up in the final quarter.”

Funding Circle shares rose as much as 4% to 109p in early London trade, though the stock remains down by 20% since the start of the year.

It comes after Funding Circle decided to sell its loss-making US business to iBusiness Funding (IBF) for £33m as part of a strategic decision to focus solely on UK markets.

Last year also saw the launch of the company’s new cashback credit card, completing its ‘borrow, pay later and spend’ proposition.

“It is still early days for our cashback credit card but initial metrics are in line with our expectations and we look forward to seeing further growth in 2025,” Funding Circle said.

Debt-fuelled growth reached record highs in the European tech sector in 2024, according to research from Atomico, as founders shunned equity investment at lower valuations in favour of borrowing to invest.

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