The British Business Bank announced on Wednesday it has committed up to £150 million for lending to UK small businesses through Funding Circle. According to the banking group, the transaction is under its ENABLE Funding program and is designed to accelerate lending to small businesses and is expected to support the growth of more than 2,000 UK firms.
British Business Bank also reported the new facility will provide senior financing to a transaction with the Funding Circle SME Income Fund Limited (FCIF), a publicly traded fund that lends exclusively through Funding Circle. It was revealed that since March 2013, £165 million has been lent directly to the small business ecosystem through Funding Circle using the British Business Bank’s programmes, earning around £10 million in cumulative net interest for the taxpayer. In 2017 alone, such lending is estimated to have created and sustained around 2,100 jobs across the UK. The new commitment extends the partnership between Funding Circle and the UK government.
Speaking about the commitment, Keith Morgan, CEO of British Business Bank, stated:
“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. By making this new commitment, more smaller businesses across the UK can get the finance they need to fulfil their growth potential.”
Small Business Minister, Kelly Tolhurst, also commented:
“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.”
Sachin Patel, Chief Capital Officer at Funding Circle added:
“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.”