Online lending platform Funding Circle announced last week it has partnered with Aviva Finans AB to pledge €50 million towards funding loans for German and Dutch small businesses. According to Funding Circle, the investment agreement facilitates the initial €50 million in small business loans over the first nine months.
“Avida will invest an initial €50 million in loans originated through Funding Circle’s German and Dutch platforms over a nine-month period. This is part of a planned long-term strategic partnership with the initial lending amount expected to increase in 2020. The partnership marks the first time a Nordic financial institution invests in small business loans through a lending platform and is an important step towards achieving Avida’s growth target of €1 billion in lending in 2020.”
While sharing more details about the agreement, Sachin Patel, Chief Capital Officer at Funding Circle, stated:
“Today’s announcement highlights the significant opportunity for banks to lend directly to European small businesses. SME loans are a uniquely attractive asset class across all our geographies and Avida joins a diverse range of investors on our platforms. We are excited to be the first lending platform to work with a notable Nordic financial institution to help even more small businesses in Germany and the Netherlands get the finance they need to grow.”
Tord Topsholm, CEO of Avida Finans AB, also commented:
“I am excited over this new cooperation that gives us an excellent complement to our home market in the Nordic region as we now have the opportunity to reach a market we could not tap into without Funding Circle’s platform. Notable is also that Avida is the first Nordic player in the financial market to launch a cooperation with the SME loan platform.”
Funding Circle noted that the partnership with Avida Finans AB comes after a recent lending agreement between it and the European Investment Bank (EIB) in Germany and the Netherlands. In April 2019, the EIB is lending €100 million, alongside a further €25 million from a leading global asset manager, supporting over 2,000 small businesses in Germany and the Netherlands over the next two years and providing a further injection of much-needed funding into the European small business sector.