Funding Circle and Avida Finans AB announce EUR 50 million partnership to fund loans to German and Dutch small businesses
26 June 2019
• The investment agreement facilitates an initial EUR 50 million in small business loans over the first nine months. • Funding Circle further diversifies its funding base with its first partnership with a Nordic financial institution. • Avida will expand its leading corporate lending business into new markets.
London, 26 June 2019 - Funding Circle Holdings plc (“Funding Circle”), the leading small business loans platform in the UK, US, Germany and the Netherlands, announces a partnership with Avida Finans AB (“Avida”), a fast-growing Nordic player in financial markets, to lend EUR 50 million to small businesses in Germany and the Netherlands in 2019.
Avida will invest an initial EUR 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 EUR 1 billion in lending in 2020.
As the SME lending industry matures, an increasingly diverse group of investors are contributing to broadening the sources of funding available to SMEs. Avida joins a notable group of investors lending to small businesses through Funding Circle, including 90,000 individuals, the European Investment Bank, local and regional governments and other financial institutions, including pension funds and insurance companies. The collaboration will enable Avida to expand its leading corporate lending business into new markets.
Sachin Patel, Chief Capital Officer at Funding Circle, said: “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, said: “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."
Tord Topsholm sees the cooperation with Funding Circle as an important step on the way to reach Avida’s high set goals. “We have a growth plan for Avida, which we follow step by step. With the help of a well-diversified portfolio, we will reach a total lending to consumers and corporate customers of EUR 1 billion in total lending by 2020. And the cooperation we start today will take us further steps towards to reach our goals.”
Panni Morshedi, Managing Director Continental Europe at Funding Circle, commented: “We are very happy about today’s announcement that is testament to our strong position in the German and Dutch markets. Lending platforms have opened up the SME loan asset class to a variety of investors thereby ensuring that the engine of the real economy has access to much-needed finance. Avida’s commitment will help us serve even more small businesses in Germany and the Netherlands, with service-oriented, fast and competitive loans.”
This announcement follows a recent lending agreement between the European Investment Bank (EIB) and Funding Circle in Germany and the Netherlands. As per April this year, 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.
Notes to editor
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About Funding Circle
Funding Circle (LSE: FCH) is a global SME loans platform, connecting SMEs who want to borrow with investors who want to lend in the UK, US, Germany and the Netherlands. Since launching in 2010, investors across Funding Circle's geographies - including more than 90,000 retail investors, banks, asset management companies, insurance companies, government-backed entities and funds - have lent more than €8.2 billion to over 68,000 businesses globally. Funding Circle is a member of the FTSE 250 Index.
Avida is a credit market company that since the start in 1983 has focused on offering loans to individuals and corporates. We are currently about 120 employees, with headquarters in Stockholm and offices in Oslo and Helsinki. We are building a high growth and high-quality business that will not tail off in growth and we have a growth target of EUR 1 billion loan book by 2020.
At Avida we are not like everybody else in this business, we will always go that extra mile to help our customers turn their plans into reality and we promise that we always give our customer the proper attention and the chance to get the financing they need.
Avida is under the supervision of the Swedish Financial Supervisory Authority and our share is listed on NOTC, Oslo stock exchange and like all Swedish banks and credit market companies, we are covered by the state deposit insurance.