02 April 2019
Pollen Street Capital, the equity sponsor of SBOLT 2018-1, is returning to the market with SBOLT 2019-1, a securitisation of UK loans originated by Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands.
The £187 million provisional portfolio is the third securitisation of loans originated by Funding Circle and comes eleven months after the last securitisation was successfully launched by Pollen Street.
The transaction was rated by three rating agencies, and its senior tranche was awarded an Aa3 / A (high) / AA- ratings by Moody’s, DBRS and Kroll respectively. On closing, the spread over 1 month Libor on the senior tranche was 105bps.
Today’s news is recognition of the online lending model’s ability to open up deep pools of capital to small businesses, creating more choice and competition in the small business lending market. In turn this creates a more stable ecosystem and reduces dependency on bank lending, as recommended by the Bank of England and European Central Bank.(1)
Sachin Patel, Chief Capital Officer at Funding Circle said: “This latest securitisation further validates the attractive, risk-adjusted returns that are being generated for investors in SME loans. Funding Circle is proud to facilitate direct investment into the backbone of the UK economy, driving much-needed job creation across the country as a result”
Launched in 2010, Funding Circle brings together industry-leading risk management policies and cutting edge technology, enabling investors to earn attractive returns by lending directly to established and creditworthy UK businesses. Investors in the UK include 79,000 people, local authorities, the government-owned British Business Bank, the European Investment Bank and financial institutions such as pension and insurance funds. A strong lending track-record has seen investors earn c. 5 – 7% per year.(2)
(1)The case for a better functioning securitisation market in the European Union, May 2014
(2)Loans taken out since 2012 are projected to deliver between 4.7 – 7.3% per year, after fees and bad debt. It can take up to five years for loans to be fully repaid, so these ranges take into account how loans are currently performing and how we currently expect them to perform in future. Data is from Funding Circle. Find more detail at fundingcircle.com/uk/statistics. Past performance is not a guide to future performance.
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Notes to editor
Funding Circle (www.fundingcircle.com) 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 85,000 retail investors, banks, asset management companies, insurance companies, government-backed entities and funds – have lent more than £6 billion to over 60,000 businesses globally. Funding Circle is a member of the FTSE 250 Index.
Pollen Street Capital
Pollen Street (www.pollencap.com) is an independent alternative asset manager focused on specialist business and financial services, with c. £2.7bn assets under management across private equity and credit strategies across the UK, US and Europe. Pollen Street works closely with entrepreneurial management teams who share our values and whose businesses have strong potential for growth and market expansion. Pollen Street has a long track record of successfully supporting businesses through the contribution of market, product and process expertise as well as capital to create value.