One of the UK’s leading P2P funding providers has netted a further £40m of government funding to funnel through to the UK’s SMEs.
Funding Circle, which has consistently led in terms of the volumes put through its platform to smaller businesses, has announced it will receive £40m from the British Business Bank in order to offset fears that Brexit will further tighten credit conditions for small firms in 2017.
In announcing the news, the BBB said, “We expect 2017 to be another year of growth, with significantly more lending opportunities for investors than in previous years. To help meet this demand, the British Business Bank will increase the proportion they lend to each eligible business from 10% to 20% ‒ similar to when the UK government first began lending through Funding Circle through the Business Finance Partnership. This will allow more loans to be listed to the partial loan marketplace, resulting in a wider range of businesses for you to lend to and to diversify across.
P2P a growing presence
James Meekings, a co-founder of Funding Circle, said: “After the referendum result in June, we started having conversations with the British Business Bank about the role they could play if the economy turned due to increasing uncertainty.”
As a result of those talks, Funding Circle’s P2P service will now play an increased role in the funding mix, building on existing trends: between 2014 and 2015 peer-to-peer lending in the UK grew from £749m to £1.4bn, according to analysis by industry body AltFi.
Catherine Lewis La Torre, chief executive of the British Business Bank’s investment arm, said peer-to-peer lending was “becoming an increasingly important source of finance for smaller businesses”.
Ms Lewis La Torre went on to say that, “A key part of our remit is to support the development and growth of such finance markets, while earning an attractive, commercial return for the taxpayer.”