Cornwall-based lender FOLK2FOLK on course to double profits in 2021

Cornwall-based finance firm FOLK2FOLK has announced a £943,000 profit for the first half of 2021 and said it is on course to double profits this year.

The Launceston-headquartered marketplace lender for British SMEs delivered just short of the company’s FY 2020 profit during February to July and said it is an example of its “impressive growth”.

The company first achieved profitability under current managing director Roy Warren in 2019, turning a £198,000 profit which increased to £1.1m a year later during pandemic-hit 2020.

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Despite the coronavirus, FOLK2FOLK’s robust performance has resulted in the company recently making its first dividend payment to shareholders.

FOLK2FOLK said it and its investors are helping to create “a level playing field across the UK” by providing access to finance for businesses in the regions. More than £460m has now been lent to SMEs across regional Britain, with no investor capital losses to date.

Mr Warren said: “We’ve had a tremendous year so far, with the first half delivering a profit not far off that for the full year last year. A big contributor to these results, has been a strong summer. Traditionally summer is notoriously low performing, but we’ve had a terrific few months helping lots of businesses get the funds they need, and August is set to be our second biggest month of 2021 with about £12m in loans.

“We’ve lent more than £460m across regional Britain, rapidly approaching a half billion in lending, which is enabling hundreds of business owners to crack on with their growth and diversification plans as the country emerges from the pandemic and Brexit. Looking at our pipeline into the winter months, I’m confident we’ll be helping even more businesses which will continue our current growth path.”

FOLK2FOLK is now on track for a third straight year of profit after suffering a £535,000 loss in 2018. The business puts the success down to investors wanting to take advantage of the generous returns it offers and that they are helping businesses which operate in rural areas outside the large conurbations.

The business has a brief to support such smaller enterprises, but has expanded from its original mission to finance farms and now embraces a range of enterprises from data centres to vineyards.

FOLK2FOLK injected about £60m into SMEs during 2020, enabling hundreds of small businesses across a variety of sectors to grow, diversify or adapt to the new Covid-19 environment.

FOLK2FOLK was set up in Cornwall in 2012 and occupies “a unique space” within the alternative finance sector because of its focus on the often-overlooked businesses in rural and regional parts of Britain.

The company was started because of a problem observed in the Launceston area and is built on traditional Cornish values of “good folks helping other good folks”.

After realising the challenges faced in Cornwall were the same for other rural areas across the country it led the venture to branch out nationally.

It is now focused on helping businesses outside of city centres “level up” in terms of their access to finance and the opportunity to invest in themselves, particularly if they have been turned down by high street lenders.

Business Live’s South West Business Reporter is William Telford. William has more than a decade’s experience reporting on the business scene in Plymouth and the South West. He is based in Plymouth but covers the entire region.

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FOLK2FOLK is also an investment platform, helping people with savings to have a property-secured investment alternative to bank savings and the turbulence of the stock market. Its investors have collectively earned tens of millions of pounds in interest. FOLK2FOLK stressed all their investments are secured against land or property and no one has lost any capital to date.

It said a “happy by-product” of its lending is a flow of benefits to the wider community and includes job creation, bolstering supply chains, and the continued movement of money through economies. It said it has coined the term “folkonomics” to describe this human impact of finance. FOLK2FOLK has also, in 2021, announced new additions to its broker team, a lending milestone of £400m and strong uptake of its Innovative Finance ISA (IFISA).

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