Funding Circle announces groundbreaking £132 million investment into British small businesses

03 Dec 2014

  • First global specialist fixed income manager to invest directly through Funding Circle’s UK marketplace

Funding Circle, the world’s leading marketplace for business loans, today announced that a private fund managed by KLS Diversified Asset Management has agreed to invest £132 million in loans to small businesses originated through Funding Circle, providing a further injection of much needed funding into the British small business sector.

The deal represents the first global specialist fixed income manager to invest through Funding Circle’s marketplace in the UK, and is further recognition of the successful growth of Funding Circle globally over the past twelve months. Funding Circle has now facilitated more than $750 million to 7,000 businesses, with $380 million being lent in 2014 alone.

Samir Desai, CEO and co-founder of Funding Circle said: “Today’s news is another significant step on the journey to creating a global marketplace where creditworthy businesses borrow directly from a diverse range of investors. In the UK Funding Circle now has more than 35,000 individuals, the government-backed British Business Bank and other institutional lenders all helping businesses access the finance they need to grow.”

The investment combines cutting-edge technology with market leading financial solutions. As a passive investor, and in accordance with Funding Circle’s industry-leading credit criteria, the fund managed by New York-based KLS will invest across all risk bands.

Gyan Sinha, Partner at KLS said: “KLS seeks out attractively valued fixed income investments across the world. Together with Funding Circle, we’re using technology to facilitate a cross-border transaction that would never have been possible as little as 5 years ago. It’s a unique marriage of cutting-edge technology and structured finance.”

Sachin Patel, Head of UK Capital Markets said: “This landmark deal is a natural extension of our marketplace. It opens up investing to a range of larger institutional investors, from credit funds to pension funds and insurers, who are attracted to Funding Circle’s proven track record in facilitating loans with attractive yields and consistent credit performance”.

Launched in 2010, Funding Circle is helping to spark a global revolution in the way small businesses access finance, disrupting the traditional model of banking. Funding Circle’s proven model enables businesses to access finance in a matter of days, directly from investors who earn high, stable returns.

Through Funding Circle, businesses typically access the capital they need in 7 days compared to 15-20 weeks with a bank. Independent research* has found that three in four businesses would come to Funding Circle first in future, ahead of a bank.

ENDS

For more information from Funding Circle contact:

Funding Circle

press@fundingcircle.com / 0203 667 2245

Notes to editor:

*Nesta, Banking on Each Other: The rise of peer-to-peer lending to businesses

Funding Circle (www.fundingcircle.com) is the world’s leading online marketplace for business loans, enabling investors to directly lend to small businesses in both the UK and the US. Since launching in the UK in 2010 Funding Circle has now lent more than $700 million to over 7,000 businesses, and currently lends $60 million per month.

In the UK, businesses can borrow between £5,000 and £1 million, while investors can earn a 6.4%* average return after fees and bad debt. Investors include thousands of individuals, the Government-backed British Business Bank, local councils, financial organisations and the University of Huddersfield. Funding Circle was the first online marketplace to announce a formal referral partnership with Santander, one of the UK’s leading high street banks.

In the US, Funding Circle’s online marketplace allows accredited investors and institutions to invest in small businesses seeking to borrow $25,000 to $500,000 through whole loans or a passive fund.

The British Business Bank Investment Programme is a part of the British Business Bank programme, which is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. British Business Bank plc operates as a Government-owned financial institution. HM Government received European Commission State aid clearance in October 2014.

* This is the weighted average return across all investors lending for 180 days or more through Funding Circle over an annualised period. It includes all earnings and is calculated after fees and bad debt but before tax. Investment through Funding Circle involves lending to small and medium sized businesses so your investment can go down as well as up. Remember, past returns are not necessarily a guide to future returns. Data correct as of 18 August 2014.