Waterfall will invest in £1bn of loans originated through Funding Circle’s UK platform over a two-year period, with the investment partially financed by Deutsche Bank.
The investment aims to support the growth of around 14,000 small businesses.
Samir Desai, co-founder and CEO at Funding Circle (pictured above), said it was increasingly seeing substantial commitments from investors looking to purchase loans in each of its geographical territories.
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“Our business model has opened up small business lending as an asset class for the first time, allowing investors such as individuals, asset managers, insurers and government entities to earn attractive, risk-adjusted returns by lending directly to businesses.
“We look forward to working closely with Waterfall and Deutsche Bank to support the growth of even more small businesses across the UK.”
Henrik Malmer, managing director at Waterfall, added: “We are excited that our partnership with Funding Circle will enable us to continue investing in SME loans in the UK.
“This segment has been underserved by traditional lenders, and Funding Circle’s platform and technology provides borrowers access to credit while allowing investors such as Waterfall to diversify their portfolios into an interesting and exciting asset class.”