Funding Circle co-founders James Meekings (left) and Samir Desai
Funding Circle co-founders James Meekings (left) and Samir Desai

British Business Bank partners with Funding Circle in £150m boost for small firms

The British Business Bank has announced a commitment of up to £150m for lending to SMEs through loan platform Funding Circle.

The transaction, made through the bank’s ENABLE Funding programme, is forecast to support the growth of over 2,000 small businesses in the UK.

The facility will offer senior financing to a transaction with the Funding Circle SME Income Fund Limited (FCIF), a publicly traded fund lending exclusively through Funding Circle.

It marks an extension of the London-based company’s ongoing partnership with the Government. Since March 2013, small businesses have secured £165m through the platform using the British Business Bank’s programmes, earning c.£10m in cumulative net interest for the taxpayer.

Last year alone, such lending is estimated to have created and sustained around 2,100 UK jobs.

Keith Morgan, CEO of the Sheffield-based British Business Bank, said: “Encouraging the development of new types and providers of finance is a key objective for the British Business Bank.

“We have supported the growth of peer-to-peer lending as a model since its earliest stages. It helps provide welcome choice and competition and we are pleased that this part of the market continues to expand significantly, with volumes increasing by a further 51% in 2017.”

He added: “By making this new commitment, more smaller businesses across the UK can get the finance they need to fulfil their growth potential.”

Funding Circle’s chief capital officer, Sachin Patelat, commented: “This significant commitment further strengthens our successful partnership with the British Business Bank and is a reflection of the work we’re doing to provide investors with attractive, risk-adjusted returns.

“The UK Government, through the Bank, has been a pioneer of innovation within the FinTech industry and we look forward to continuing to work together to support the growth ambitions of even more small businesses across the country.”

Kelly Tolhurst MP, Small Business Minister, said: “The UK’s 5.7 million small businesses are the backbone of our economy, and ensuring we cement our status as one of the best places in the world to run a business is fundamental to our modern Industrial Strategy.

“A key part of this is ensuring that growing businesses can access the right finance for their needs, from a range of sources and this British Business Bank commitment through Funding Circle will give small businesses across the country the option of peer-to-peer lending to help them realise their full potential.”

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