30 April 2020: FOLK2FOLK, the UK’s local lending company, has announced it has turned a six-figure post-tax profit in its 2019 financial year. With this achievement, FOLK2FOLK joins the ranks of the few peer to peer (P2P) platforms to have attained profitability.
Full audited accounts have been filed with Companies House and show FOLK2FOLK reporting a profit of £198,000 for the financial year February 2019 to January 2020.
The company’s achievement can be attributed to new Managing Director Roy Warren taking the helm in May 2019 (officially announced in November 2019). Roy, who had been the platform’s Head of Risk & Loan Portfolio, quickly brought greater fiscal vigour and discipline to the operations and management of the platform.
2019 saw FOLK2FOLK streamline its loan origination; complete its largest loan; sign its first local authority investor; and maintain the steadfast loyalty of its retail investor customers at a time when other platforms jettisoned their retail investor focus following the rollout of new Financial Conduct Authority (FCA) rules in December.
Roy Warren, FOLK2FOLK Managing Director, said: “Platform profitability has become increasingly important, not just for the FCA, but for retail and institutional investor decision-making. Many view it as an indicator of whether a peer to peer platform is viable and has a sustainable future.
“I’m proud that FOLK2FOLK has made a big step forward in building its financial strength, including strong positive cashflow. Achieving profitability despite the market-impacting forces of Brexit, the election and now coronavirus is a significant breakthrough for the company and testament to our team’s commitment and our customers’ loyalty“.
Since the start of the coronavirus crisis in February, FOLK2FOLK has seen a continuing trend in business levels, facilitating £8m of loans and investments, bringing the company’s cumulative lending volume to in excess of £350m.
Roy commented: “Stability of peer to peer platforms is important right now. Creditworthy businesses in the wider South West, who can’t access finance from their bank, need alternative finance providers. We’re grateful that our profitability status puts FOLK2FOLK in a strong position to be able to continue to do that.”
Unlike some other P2P platforms, FOLK2FOLK has kept its secondary market operating and not introduced new fees for borrowers or investors; it remains free to invest via the platform. The company has applied to the British Business Bank to become an accredited lender under the government’s coronavirus loan interruption scheme (CBILS) and is awaiting to hear the outcome.