Backing every corner of the UK: Funding Circle’s £7.9 billion impact on local economies

Small and medium-sized enterprises (SMEs) are the backbone of the UK economy. From the construction firms building our homes to the independent retailers anchoring our high streets, these businesses drive the physical economy forward. But to truly thrive, they need the right fuel: fast, flexible, and reliable capital.

At Funding Circle, our mission has always been simple: to get small businesses the funding they need to win. Today, we are proud to launch our 2025 Economic Impact Report, independently produced by Oxford Economics, which quantifies exactly what that "win" looks like for the broader UK economy.

The findings tell a powerful story of resilience, growth, and the structural shift in how British businesses are funded.

A changing finance landscape

Over the last decade, we have witnessed a radical transformation in SME finance. As traditional high-street banks have tightened their lending criteria, a diverse ecosystem of alternative providers has stepped up to fill the void.

The data is clear: the traditional bank is no longer the default option. In 2025, a staggering 68% of all SME lending came from alternative providers and challenger banks. By combining advanced data analytics with seamless technology, platforms like Funding Circle are providing the agile capital that businesses need to navigate a dynamic economic environment.

The £7.9 billion multiplier effect

In 2025 alone, Funding Circle’s active loans under management reached £3.0 billion. But the true value of that capital isn't just in the loans themselves, it’s in the economic ripple effect they create.

Our report reveals that the business activity facilitated by Funding Circle supported a massive £7.9 billion contribution to UK GDP.

This macroeconomic efficiency is driven by a powerful multiplier: every £1 million in loans issued through Funding Circle contributes £2.7 million to UK GDP, supports 39 jobs, and generates £0.7 million in tax revenue.

This impact flows through three distinct channels:

• Direct impact (£3.2bn GDP): The immediate economic value created by our borrowers through their day-to-day operations and revenue generation.

• Indirect impact (£2.3bn GDP): The secondary value created across the UK supply chain as these growing businesses procure goods and services.

• Induced impact (£2.4bn GDP): The broader economic value generated when the employees of our borrowers, and those within their supply chains, spend their wages in the consumer economy.
  
  

Crucially, this £7.9 billion footprint sustained approximately 117,000 jobs across the UK - equivalent to one in every 320 UK jobs. It also supported an estimated £2.2 billion in tax revenues, roughly equivalent to the annual salaries of 58,000 nurses.

Backing every corner of the UK

Historically, commercial lending has been disproportionately concentrated in London and major metropolitan hubs. Funding Circle is proud to support vital capital reaching the resilient businesses that anchor regional economies.

In 2025, we supported SMEs in every single parliamentary constituency in the UK, with an average lending volume of £2.0 million per area.

In historically underserved local economies, alternative finance has evolved from a supplementary option into a primary source of business credit. In parliamentary constituencies such as Warrington North, and Bolsover, Funding Circle alone provided at least a quarter of all SME lending in 2025. For these communities, this capital is directly responsible for maintaining main street vitality and sustaining local employment.

Looking ahead

For 15 years, we have backed the small businesses that keep the UK economy moving, extending £17 billion of credit to over 125,000 UK businesses.

While we are incredibly proud of the £7.9 billion impact our customers generated in 2025, our work is far from over. With a persistent SME lending gap still constraining thousands of viable businesses, Funding Circle remains resolutely focused on unlocking the potential of SMEs to power the UK’s growth for years to come.

Read the full report here.

30/10/23: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.