Online Lender Funding Circle Securitizes $252 Million in US SME Loans

Funding Circle lobbyFunding Circle (LSE:FCH), an online lender servicing SMEs in the UK, US, Germany and the Netherlands, has securitized $252 million in US business loans, according to a note from the platform. This is Funding Circle’s 7th securitization and the second to take place in the US since the first in August 2019. The offering was said to be over-subscribed.

Funding Circle reports that the issuance received an A- rating from Kroll and an A3 rating from Moody’s.

The company described the offering as “signaling the market’s continued confidence in small business loans originated through Funding Circle.”

Bernardo Martinez, US Managing Director of Funding Circle, said the securitization furthers their commitment to providing institutional investors with access to this investment class:

“With our global securitization program and sponsorship capability, we can provide diversified funding for small businesses and deliver capital to this critically underserved borrower segment.”

To date in the US, Funding Circle has originated loans to more than 14,000 US businesses, with US borrowers currently averaging 11 years in business and $1.4 million in annual sales. Total loans originated in the US have topped $2 billion with $1 billion of loans under management. Funding Circle said that within the United States the company holds more outstanding small business loans than almost 98% of banks.

Funding Circle, based in the UK, points to a report that its online lending services helped to sustain 38,000 jobs in the US during 2018.

Since platform launch, the Fintech has provided access to capital to over 72,000 small businesses that have borrowed $10.2 billion in Funding Circle’s four geographies.

Investors on the Funding Circle platform include more than 90,000 retail investors, banks, asset management companies, insurance companies, government-backed entities, and funds.

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