A 21st century alternative to banks. August industry news
According to the Bank of England, net lending to large companies by Government’s Funding for Lending scheme fell by £3.5 billion in the second quarter of this year, widening from a £2.7 billion drop in the first quarter. Lending to small businesses fell by £400 million. By contrast, one scheme that has proven to be successful so far is the British Business Bank, as highlighted by Funding Circle co-founder, James Meekings in the Guardian, Reuters and The Times.
Continuing the theme of Government support for small businesses, Keith Morgan, CEO of the British Business Bank, was interviewed by the Sunday Telegraph. As part of the piece, Mr Morgan talked about the work the British Business Bank is doing to support new, innovative providers and how they are lending money directly to businesses through marketplaces, like Funding Circle, Zopa and RateSetter. 30,000 British businesses have already benefited as part of the wider programme of helping businesses access finance, including 2,300 businesses as a direct result of its investment through Funding Circle.
A 21st Century alternative to banks
Funding Circle CEO, Samir Desai was a guest on BBC Radio 4’s Today programme to talk about the trends in alternative lending. In a CityAM feature about London’s growing fintech sector, Funding Circle was also named out as a UK success story that has recently spearheaded into the US market.
As August drew to a close, Lending Club, the largest consumer peer-to-peer lending marketplace in the world, announced plans to file for IPO. The business is expected to raise approximately $500 million. One US commentator described it as “Wall Street royalty meets Internet royalty“. As one of the most anticipated IPOs of the year, it will be exciting to see how things progress over the next few months.
Also during August, we announced that we had purchased LeapPay – a small US technology company. This acquisition will to help provide even faster decisions for American businesses looking to access finance.
Writing in City Am, Rhydian Lewis, CEO of RateSetter, championed London as the home of the fintech industry – combining the best of the financial world of New York and the technology of Silicon Valley. Mr. Lewis cautioned against the UK resting on its laurels and called for more to be done to strengthen our position in this important growth industry. Also in City Am, Alex Letts, chief executive of digital current account provider Ffrees, discussed how fintech is forcing UK banks to redefine their strategies. He emphasised the need for traditional providers to partner with new, innovative companies like Funding Circle and Transfer Wise, or avoid being left behind.