Folk2Folk Set To Post Record Profits As Alternative Finance Market Consolidation Expected

Alternative loans

The alternative lender says its unaudited accounts show it is on track to report pre-tax profits of £1.98m for the year to January 2022, nearly doubling profit by 1.1 million pounds made the previous year.

Image source: Roy Warren/Folk2Folk

Folk2Folk expects to report record profits of almost £2m for 2021 and foresees further consolidation in the alternative finance market.

The alternative lender says its unaudited accounts show it is on track to report pre-tax profits of £1.98m for the year to January 2022, nearly doubling profit by 1.1 million pounds made the previous year.

He said the rise in profits marked the third consecutive year the Cornwall-based market was in the black.

Folk2Folk provides financing to regional business owners. It was founded in 2013 and became FCA authorized three years later.

Folk2Folk has identified several highlights in 2021, including double-digit loan portfolio growth, an annual loan record of £108m, a move to Northern Ireland and a multi-million pound investment commitment from British Business Investments, a subsidiary of British Business Bank.

In 2020 he signed a deal with German company CrossLend which connects loan originators with institutional investors as the Cornwall-based lender sought to expand its investor base.

Chief executive Roy Warren said he expects further consolidation in the alternative finance market.

Warren said: “We see huge opportunities to underwrite considerable volumes of loans across the UK, and institutional investing is a key part of our strategy to support this.

“We also expect the alternative finance market to continue to consolidate and provide us with the opportunity to acquire loan portfolios on other platforms.”

An example of a recent loan book deal saw Allica Bank acquire a £600m loan book from AIB Group last year.

Warren added, “We see this as a growth area for us and are actively looking to the market moving forward.

“We have to anticipate that 2022 is likely to be a difficult year for everyone, against the backdrop of inflation, rising interest rates and hostilities in Eastern Europe, all of which fuel an uncertain external environment.

“This makes it all the more important to have a strong and solid foundation for any business.

“With only a small handful of lending platforms making a profit, our high profit levels are a testament to Folk2Folk’s stability in terms of finances, activity levels and governance, and we know this builds investor confidence and borrowers in us.”

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