Funding Circle will stop offering the recovery loan scheme (RLS) later this week, and will revert to offering its own business loans.
Funding Circle said it will continue to make offers under the scheme until 20 May but will not be able to make any changes to these offers after that date.
The now former peer-to-peer lending platform said it will continue to fund RLS offers until it reaches its allocation limit, which it expects to happen before the start of June.
If it reaches the limit before then, it will tell borrowers as soon as possible to minimise the impact on any applications and offers being processed or yet to be funded, the lender added.
Funding Circle said from 9am on Monday 23 May, any new offers will be for one of its business loans. The platform added it has made some changes to its commercial loan product on offer.
From 23 May, it will provide loans from £10,000 to £500,000, with the maximum amount available capped at 60 per cent of the company’s turnover.
Loan terms will be between two and six years, with borrower interest rates starting at 3.9 per cent for working capital, growth or investment. A personal guarantee will be required on all loans but there will be no early settlement fee.
Funding Circle said it will raise the maximum commission for brokers to 6.5 per cent and its own fee will be 3.5 per cent.
“As we move to offering your small business clients access to finance through our commercial loan product, we have made some changes to the product currently on offer to ensure we are continuing to serve a wide range of small businesses,” Funding Circle said in a blog on its website.
“We are also always looking at new ways to help provide even more small businesses with access to the finance they need and expect to announce more on this later this year.”
The RLS was launched on 6 April last year as a replacement to the previous government support schemes including the coronavirus business interruption loan scheme (CBILS) and bounce back loan scheme (BBLS). Funding Circle, which also previously offered CBILS and BBLS loans, was approved for the RLS in May last year.