The transaction has been made under the bank’s ENABLE Funding programme and is expected to support the growth of over 2,000 UK companies.
The new facility will provide senior financing to a transaction with the Funding Circle SME Income Fund Limited, the publicly traded fund that lends exclusively through Funding Circle.
This new commitment extends the existing partnership between the P2P lending platform and government-backed bank, with £165m being lent to SMEs through Funding Circle since March 2013 using BBB programmes.
Keith Morgan, CEO at BBB (pictured above), said that encouraging the development of new providers of finance was a key objective for the bank.
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“We have supported the growth of P2P lending as a model since its earliest stages.
“It helps provide welcome choice and competition and we are pleased that this part of the market continues to expand significantly, with volumes increasing by a further 51% in 2017.
“By making this new commitment, more smaller businesses across the UK can get the finance they need to fulfil their growth potential.”
Sachin Patel, chief capital officer at Funding Circle, added that the commitment was a reflection of the work it was doing to provide investors with risk-adjusted returns.
“The UK government, through the bank, has been a pioneer of innovation within the fintech industry and we look forward to continuing to work together to support the growth ambitions of even more small businesses across the country.”
The commitment was also welcomed by Kelly Tolhurst, small business minister, who said that ensuring the UK cemented its status as one of the best places to run a business was fundamental to its modern industrial strategy.
“A key part of this is ensuring that growing businesses can access the right finance for their needs from a range of sources, and this British Business Bank commitment through Funding Circle will give small businesses across the country the option of P2P lending to help them realise their full potential.”