P2P lender in Santander funding partnership talks

P2P lender in Santander funding partnership talks




Funding Circle and Santander could be set to join forces, in a monumental deal which could see the mainstream lender tapping in to the unregulated peer-to-peer market.

Funding Circle and Santander could be set to join forces, in a monumental deal which could see the mainstream lender tapping in to the unregulated peer-to-peer market.

Unconfirmed reports suggest that the UK’s biggest peer-to-peer lender could be set to sign an agreement with Santander, a deal which could result in the Bank referring rejected borrowers on to Funding Circle.

The company has held talks with Santander over a partnership that could allow the mainstream lender to provide capital to boost the amount lent to entrepreneurs through Funding Circle. It could also see Santander passing on SME leads to Funding Circle investors, with deals that the Bank just isn’t ready to take the risk on.

Both parties stress that the initial reports are simply speculation, though Funding Circle has admitted having talks with a host of businesses since its creation.

Signing a partnership with Santander could prove incredibly valuable for Funding Circle, adding a much needed sense of credibility to a market that suffers at the hands of many doubters - particularly with peer-to-peer lending not yet covered by the Financial Services Compensation Scheme.

On the other hand, the initial concept of peer-to-peer lending was to eradicate even the concept of banks – providing quick and easily accessible funding, without the obligatory red tape that comes with the regulation of a bank.

UK peer-to-peer lenders have provided £550 million of credit to businesses and consumers, with Funding Circle in particular lending over £120 million since its launch - a solid figure for an industry that is barely five years old.

Speaking in a statement, Samir Desai, the CEO of Funding Circle, said: “Since we launched in 2010 we have been approached by numerous organisations interested in finding out more about Funding Circle. Some of these discussions turn into formal partnerships, (the Government, councils and Huddersfield University), which help to drive more businesses on to the marketplace. Others are nothing more than informal conversations.”

“If any partnerships like this are to be agreed, we would let you know in advance. If partnerships like these can create more lending opportunities on the marketplace and help more businesses then we think it is something worth exploring further, however, I want to make it clear that nothing has been agreed and it is unclear if anything will be agreed.”

Speaking on the prospective move, Stuart Law, founder of Assetz Capital, said: “"Independence and a clean break from the greedy banks has been a central pillar of the alternative finance market but we’re in danger of losing all the work that’s been done if Funding Circle begins working hand-in-hand with Santander. Today, the standing of the peer-to-peer market has been dealt a potentially devastating blow – we just hope the thousands of investors earning good returns as well as the many businesses benefiting from peer-to-peer lending stick with us and know that the rest of the market is dedicated to changing the business finance markets for good."

Also commenting on the prospective deal, and speaking on Twitter, UK Crowdfunding, said: “Santander eyes move into peer-to-peer lending - clearly the banks are starting to see crowd funding’s potential”.

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