Figure Technologies has reportedly laid off staff and is preparing for an initial public offering (IPO).
The firm laid off 20% of its staff — 90 employees — this week, Bloomberg reported Friday (July 28), citing documents the media outlet had reviewed.
The documents also showed that Figure has begun interviewing bankers ahead of an IPO for its lending business that is planned for next year, according to the report.
Reached by PYMNTS, a spokesperson for Figure declined to comment on the report.
Executives began talking with bankers about taking the lending division public after its performance saw it hit a record $900 million in volume during the second quarter, with the business profitable and having a contribution margin of more than 50%, according to the Bloomberg report.
Figure executives have dubbed the lending division “LendCo,” and Co-founder Mike Cagney said he expects its valuation to be $2.5 billion when it goes public, per the report.
The company had struggled to raise money earlier this year as it was impacted by the downturn that has affected many firms in the technology and cryptocurrency-adjacent sectors, per the report.
It was reported in February that Figure had cut its funding goal and was considering spinning off some product lines amid the venture capital downturn.
Figure was aiming to raise $100 million — one-third of the amount it had planned earlier and seemed to be near achieving.
Figure was also considering a restructuring — although not layoffs at the time — and a spinoff of its markets and payments businesses from its lending business.
The company has built a presence in delivering core banking services, Cagney told PYMNTS’ Karen Webster in an interview posted in September. Among those services are Figure Pay, a Banking-as-a-Service (BaaS) solution that includes a Visa debit card, along with embedded buy now, pay later (BNPL) and payday advance features.
Those services are offered across a platform that is geared to FinTechs, nonbanks and retailers through Figure’s embedded issuer processing services.
Corporate delinquencies are reportedly at the highest rate they’ve reached in eight years.
The delinquency rate for loans from U.S. banks to both U.S. and foreign companies rose to 1.3% at the end of 2024, a figure that was the highest since the first quarter of 2017 but well below the 5% seen during the 2008 financial crisis, the Financial Times (FT) reported Monday (Feb. 17), citing data from BankRegData.
The total amount of bank debt on which U.S. business borrowers were at least one month late reached $28 billion, up $2.2 billion from three months earlier and up $5.4 billion from a year earlier, according to the report.
The report attributed the rise to interest rates that remain high, surprising some observers who expected them to fall this year. A pickup in inflation in January and concerns about the impact of President Donald Trump’s proposed tariffs have delayed further interest rate cuts by the Federal Reserve, the report said.
Corporate bank loans tend to be variable rate, so the expected decline in interest rates would have given some relief to borrowers, the report said.
The data from BankRegData does not include loans from direct lenders and private credit funds, per the report.
It was reported in January that the growth in commercial bank loans was at the slowest it’s been since the wake of the 2008 financial crisis.
Commercial bank loans grew by around 2.7% in 2024, which was only somewhat faster than the 2.3% rise seen in 2023.
A number of bankers said they hoped to see loan growth later this year, citing optimism among clients and other indicators.
Bank of America said during a January earnings call that commercial loans were up 5% year over year in the fourth quarter and that loan and deposit growth in the current year should outpace last year’s.
J.P. Morgan Chase said during a January earnings call that there has been improvement in business sentiment and that balance sheets at small businesses are healthy.
Citi CEO Jane Fraser said during a January earnings call that in the United States, “growth is not only being driven by the higher-end consumer but also by a strong and innovative corporate sector.”