Investors pass £1 billion lending milestone to small businesses through Funding Circle
29 December 2015
Investors at Funding Circle, the world’s leading marketplace for business loans, have reached a major milestone having lent more than £1 billion directly to small businesses in the UK.
- £500 million lent in 2015 alone
- Investors on track to lend the same again in next 12 months
More than half of this money (£500 million) was lent through the marketplace in 2015 alone. Investors are on track to lend a further billion pounds within the next 12 months, as marketplace lending proves to be the preferred option for small businesses looking to access finance.
Since launching, 12,000 UK businesses have accessed finance through Funding Circle, across 15,300 loans. Independent research has found that a business employs three new people within twelve months of taking a Funding Circle loan, resulting in an estimated 46,000 new jobs(1) since 2010. This is testament to the significant impact investors at Funding Circle are having on UK economic growth.
Over the last 5 years, the Funding Circle marketplace model has proved to be a more efficient way for businesses to access the finance they need to grow and expand – and has become one of the largest contributors of new finance to small businesses. According to recent Bank of England statistics, the UK marketplace was the third largest net lender(2) to small businesses in Q3.
By lending directly to businesses, investors have earned more than £55 million of net interest, helping businesses across the country and across all sectors, from manufacturers to retailers to professional service companies. Investors at Funding Circle include 45,000 people, the government-backed British Business Bank, 19 local authorities, a university and a wide range of financial institutions.
James Meekings, UK Managing Director and co-founder, commented: “We’re committed to creating opportunities for small businesses that didn’t exist before. For too long, they were reliant on a single line of credit from traditional providers. We’re building the infrastructure where any investor, big or small, can lend. We want to become the first choice for small business finance by making small business lending faster and easier than ever before.”
Launched in 2010, Funding Circle is sparking a global revolution in the way small businesses access finance. By bringing together industry leading risk management policies and cutting edge technology, Funding Circle’s proven model strips out the need for inefficient bank processes, enabling businesses to access finance in a matter of days directly from investors.
Funding Circle is the world’s leading marketplace for business loans, with operations in the UK, US and Continental Europe. Globally investors have lent $1.8 billion to 15,000 businesses.
(1) Independent research by government think tank, Nesta, found that an average business borrowing through Funding Circle employs ~10 people and increases headcount by ~30% within 12 months of taking a loan. Nesta, Banking on Each Other, 2013.
(2) Based on Q3 2015 lending figures included in December’s (Funding for Lending data), and Q3 2015 (Funding Circle lending) (£146m) minus repayments (£54.5m).
|FLS participant||Q3 2015 lending to SMEs (£M)|
|2||Lloyds Banking Group||275|
|6||Yorkshire Building Society||38|
|9||Julian Hodge Bank||22|
|10||Cambridge & Counties Bank||21|
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Funding Circle (www.fundingcircle.com) is the world’s leading online marketplace for business loans, matching small businesses who want to borrow with investors who want to lend in both the UK, the US and Europe. Since launching in 2010, investors at Funding Circle – including 45,000 individuals, financial institutions and even the UK Government – have now invested $1.8 billion in 15,000 businesses, and currently lend ~$100 million per month. Funding Circle was the first marketplace to announce a formal referral partnership with Santander, one of the UK’s leading high street banks, and has since announced a similar partnership with RBS. It has raised $273m in equity capital from the same investors that backed Facebook, Twitter, Airbnb and Wealthfront.