Funding Circle smashes £200m target

Funding Circle smashes £200m target




British investors have reached a major milestone having lent more than £200 million to UK businesses through Funding Circle in less than three-and-a-half years.

British investors have reached a major milestone having lent more than £200 million to UK businesses through Funding Circle in less than three-and-a-half years.
 
As one of the UK’s leading peer-to-peer lending marketplace exclusively for business borrowers, Funding Circle has helped over 3,000 businesses access the finance they need to grow and expand.
 
Of the £200 million total, £130 million has been lent out in 2013 alone, creating an estimated 6,150 jobs across the country.
 
British people and organisations such as the Government, councils and universities, continue to lend record amounts whilst earning inflation beating rates.  The record week for lending was in December 2013, when £5.3 million made its way to businesses across the UK in just seven days. 
 
The exponential growth has led to independent estimations that Funding Circle could account for between 10 per cent - 20 per cent of the small business lending market in the next ten years.
 
Laura McMullen, Business Development Director at Funding Circle, said: “Over the last three years, Funding Circle has provided businesses with a faster, more efficient way of accessing the finance they need. What we are seeing now is not just the emergence of a challenger model but a fundamentally better method of borrowing and lending that will continue to grow in importance over the coming years.   
 
“Brokers continue to be instrumental in our growth. We have seen a threefold increase in the number of brokers we have relationships with in the last year and we hope to continue to grow this in 2014.”
 
Independent research has shown that 77 per cent of businesses that have borrowed through us would come back to us first, over traditional sources of finance.
 
Launched in August 2010, Funding Circle enables financial advisers and their business clients to access finance independent of the banks, whilst at the same time allowing British people to earn attractive, stable returns for the long-term. This process sidesteps the high street banks with businesses receiving finance in a matter of days compared to up to three months for a traditional bank loan. 
 
To date, more than £200 million of loans have been lent to small businesses across the UK. To be eligible, businesses must have a minimum turnover of £100,000 and have been trading for at least two years. Funding Circle works with a number of financial intermediaries that apply for loans on behalf of their business clients. 
 
Once businesses pass Funding Circle’s credit assessment processes, their loan is posted on the marketplace. From here, investors choose which type of businesses to lend to, and bid the amount of money they wish to lend, and the interest rate they want to earn. Investors can bid small amounts, from as little as £20, on lots of different businesses to spread their risk.
 
Businesses typically borrow between £5,000 and £1 million, while investors receive an average net return of 5.7 per cent on their money. Investors include thousands of individuals, the British Government, local councils and Huddersfield University.

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