Kuflink loan book reaches £60m in June

In its latest annual report, as of 5 July 2021 its loan pipeline had more than £23m in loans ready to complete with solicitors, along with £31m in the enquiry stage and £15m instructed for valuations.

It said that as it had reduced investment on its P2P lending platform it had issued loan notes on its own balance sheet to fund these loans.

The company explained it had experienced a negative net withdrawal position as the pandemic had reduced appetite of P2P lenders. It added that P2P lenders had also exited the market.

It continued that it had offered forbearance to some clients, provided Covid extensions to some loans and was receiving government support through the Coronavirus Job Retention and the Bounce Back Loan schemes.

The company also reduced cost base with staff redundancies in 2021, meaning salaries and wages were cut by third down on existing run rates. It also cut its marketing budget by up to 42 per cent.

Future outlook

However, the firm was positive about the future and predicted an increase in new business origination above its pre-Covid forecast. It justified this as the need for bridging facilities tended to grow post-crisis, the post-vaccine market will be more buoyant and business levels would increase as demand returns.

“Post year-end, Kuflink has managed to cut significant costs within the business, which has enabled the group to move to a self-sustainable model meaning profits are being generated monthly and we envisage this to be the case for the foreseeable future,” director Rawinder Singh Binning said in the report.

Kuflink Ltd, which owns and manages the peer-to-peer lending platform, reported a profit before tax in 2020 of £136,000, which is up from a loss of £456,000.

The report said 158 deals went live on the platform in the year to 30 June 2020, with the total deals funded coming to 349 and total users pegged at 5,513.

Investment in Kuflink increased from £70m in December 2019 to £83m in 2020. This did not include redemption on maturity of investment. Capital repayment on the platform was pegged at £51m in June 2020.

In its list of going concerns, the company said one potential issue could be raising capital, but it pointed to strong investment by its parent company and existing shareholders as signs of commitment and confidence in its business.

It added that it would be widening its investor base and was in a “strong position” to do so as there was opportunity to grow due to the financial crisis impacting liquidity in its markets.

Kuflink said it did not have a large stock of loans impacted by economic downturn, and pointed to its ongoing product development.