Funding Circle: London-based lending platform that helps small businesses gets £30M from BBI

Funding Circle

British Business Investments, a Sheffield-based investment management firm, recently announced a £30 million commitment to support UK small businesses through Funding Circle’s UK SME Direct Lending Fund. It’s worth mentioning that Funding Circle is a small and medium enterprise (“SME”) loan platform.

UK SME Direct Lending Fund

The UK SME Direct Lending Fund, which launched in July 2019, gives institutional investors, including pension funds, insurance companies, and local authorities, the opportunity to lend directly to a diversified portfolio of SMEs originated by Funding Circle.

Judith Hartley, CEO, British Business Investments said: “One of the objectives of British Business Investments is to support the development of diverse finance markets. We have supported the growth of FinTech and marketplace lenders since its early stages, and lenders like Funding Circle help provide competition and choice to smaller businesses. By making this commitment, smaller businesses across the UK can get the finance they need to fulfil their growth potential.”

Investing in smaller businesses

Following Funding Circle’s accreditation to lend under the Coronavirus Business Interruption Loan Scheme (CBILS) in April 2020, the Fund was subsequently given the approval to expand its investment strategy to include investing in CBILS loans. Meaning more investors have been able to support smaller businesses as they seek to recover from the impact of COVID-19.

 By lending directly to businesses through Funding Circle, investors can now earn attractive returns to better provide for their future. As per the company claims, businesses get fast, easy access to funding to grow, create jobs, support local communities, and drive the economy forward.

Various investors including individuals, the British Business Bank, the European Investment Bank, the Merseyside Pension Fund, and financial institutions such as asset management and insurance companies lend through this platform. 

Sachin Patel, Chief Capital Officer of Funding Circle said: “By investing in our fund, investors can earn attractive risk-adjusted returns whilst contributing to economic growth and job creation. This latest support from British Business Investments demonstrates the vital role FinTechs play in facilitating loans to small businesses whatever the weather. We look forward to welcoming more investors in the near future.”