FUNDING Circle has become fully authorised by the Financial Conduct Authority (FCA), paving the way for the launch of its Innovative Finance ISA (IFISA).
The platform, which became the UK’s largest peer-to-peer lender in terms of cumulative lending after surpassing Zopa earlier this month, can now apply to HMRC for ISA manager status to offer the tax-free wrapper around P2P investments.
Funding Circle is the second of the ‘big three’ to receive approval from the City watchdog in recent weeks, after Zopa, which just leaves RateSetter still awaiting the green light.
Read more: FCA approval is no longer a three-horse race
“Our vision is to support thousands of people across the UK to earn stable, industry leading returns by lending directly to small businesses,” said James Meekings, UK Managing Director and co-founder.
“With more than 60,000 investors now regularly lending through Funding Circle, we are on track to becoming a mainstream investment choice for investors up and down the country.”
Funding Circle facilitates lending to small businesses from a wide range of investors including 60,000 individuals, local authorities, the UK government-owned British Business Bank, the European Investment Bank and financial institutions such as pension funds.
Launched in 2010, its investors have now lent more than £2.3bn to over 24,000 businesses, earning average interest returns of 6.5 per cent per year.
In January, Funding Circle announced that it has raised $100m (£82m) in equity investment, in a boost for UK fintech amid Brexit uncertainty.
The news was heralded as “further evidence” of the importance of UK fintech by Chancellor Philip Hammond.