Funding Circle & Santander announce partnership to support thousands of UK businesses

Today we are announcing an exciting new partnership with Santander UK, which will give thousands of small British businesses greater access to finance.

The referral arrangement will see Santander proactively refer small business customers looking for a loan to Funding Circle, where we are better placed to help. These referrals will take place on Santander’s website and in letters to customers.

This is the first partnership between a UK bank and an online finance provider, and forms part of our commitment to address the challenges of access to finance for creditworthy small businesses. We believe that by working in partnership, we can help more small businesses grow, and bring investors more lending opportunities on the marketplace.

As part of this relationship, we will also signpost borrowers to Santander where they require day-to-day relationship banking support or other services that the bank can offer, such as international banking expertise, cash management and support for growth.

We have mentioned previously that the Government is currently consulting on whether it should be mandatory for banks to refer small businesses to other non-bank providers. It’s great to receive the backing of the Business Secretary Vince Cable this morning in the Financial Times.

We believe that’s today’s move sets a precedent for how retail banks and alternative finance providers can work collaboratively to deliver an efficient, transparent and honest service.

Samir Desai, our CEO and co-founder said: “This partnership recognises our role as the only marketplace that caters for, and is dedicated to, small businesses. In Santander we have found a fellow challenger brand that shares our commitment to putting small business customers’ needs first. They have created a blueprint for other banks to follow.”

Industry research by estimates that 250,000 businesses a year could benefit from being referred to alternative finance providers by banks.

Santander UK’s CEO, Ana Botin, commented on today’s news by saying: “SMEs need access to multiple sources of finance, and Santander’s partnership with Funding Circle is a good example of how traditional and alternative finance can work together to help the nation’s SMEs prosper. Peer-to-peer financing is also a useful way to introduce people to the concept of investing in entrepreneurs; an important element in a healthy enterprise economy.”

If you have any questions about today’s news, then please get in touch or join in on the forum.


Head of Corporate Communications


13 thoughts on “Funding Circle & Santander announce partnership to support thousands of UK businesses

  1. Good news that there will be more borrowers, but unless you get more lenders the rates will go up. Good for us lenders, not so good for borrowers or the reputation of FC as the place to go for business loans.

  2. By what criteria will Santander refer borrowers to FC? How can we be confident that FC isn’t just picking up the businesses that Santander would otherwise decline?

    • Hi Elyss,

      Santander will be signposting businesses to us where they might not be able to help, but this doesn’t mean they will automatically be listed on the marketplace. All businesses who come to us for a loan will have to go through our rigorous five-stage credit assessment process, and we will continue to use our risk models to maintain our current default rate of 1.4%.

      The key advantage to this signposting is awareness. Small businesses still think of the big banks when they need a loan, and by signposting alternatives, they will become more aware of the choice that is now available to them.

      Hope that answers your question but just let us know if you’d like more detail.


      • Hi Natasha,

        Thanks for the reply, but “Santander will be signposting businesses to us where they might not be able to help” is still not at all comforting. Why would they ever want to send a creditworthy business elsewhere? For what reasons might they not be able to help an otherwise creditworthy business? Why wouldn’t FC have the same reasons?
        You’ve not given any reasons why FC would lend to a business that has been turned down by Santander and I’m left to conclude that FC is willing to take on more risk than a bank would, the prospect of which is not filling me with confidence.

        • Hi Elyss,

          Unfortunately banks sometimes find themselves unable to lend to creditworthy small businesses because they are already exposed having lent to them previously, or they need security which the business is not able to provide. It can also be the case that small business loans do not provide enough of a return for the bank.

          Instead, our credit policies mean we are able to list loans with personal guarantees up to £200,000, and maintain a low default rate due to our ever evolving credit models. And because investors are directly lending to small businesses via the marketplace, setting the interest rate they’re happy to lend at, there is not the same issue with cost.

          Hope this answers your questions about why we are able to lend to creditworthy businesses when a bank isn’t prepared to, but please let me know if you’d like to discuss further.


  3. I would be interested too hear if FC are paying a commission too Santander and if so will they be paying to FC for their referral. The problem is that this compromises the independence of FC.

    • Hi Stephen, no money has or will exchange hands. This partnership has been formed in order to make more small businesses aware of us as another finance option, and to help keep Santander’s business customers happy if they are not able to help.

  4. Will the fact that Santander has referred the borrower be mentioned on each loan application when it gets onto the FC marketplace?

    • Hi Mike, each business will go through our rigorous credit assessment process regardless of whether they applied through the site directly, were introduced to us by a broker they know in their local community, were referred by Santander or even another alternative finance provider for example . Because businesses will hear about us from a range of places, including our own direct marketing, we don’t mark up how they initially heard about us in the loan book. Hope that makes sense but let us know if you’d like to discuss further.

      • I suppose in reality, the majority of borrowers that come to FC have already had their loan applications refused by banks, so I can see the sense in not flagging up the fact that the applicant is a Santander referral.

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  7. In my 10 year experience with Santander business account I have found it to be awful, offering no help on a business level, not even an overdraft to a business running for 4 years and in profit. instead of helping they look for every way to cream you if you ask anything of them, no wonder they support this, because they do not want to give small business any help in my opinion.

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