BBI commits £30m to Funding Circle’s SME lending fund
British Business Investments (BBI) has pledged £30m to support small- and medium-sized enterprises (SME) through Funding Circle’s UK SME Direct Lending Fund.
The peer-to-peer lender’s UK SME Direct Lending Fund was launched in July 2019, giving institutional investors the opportunity to lend directly to a portfolio of SMEs via Funding Circle’s platform.
Following Funding Circle’s accreditation to lend under the coronavirus business interruption loan scheme (CBILS) in April 2020, the fund was given approval to expand its investment strategy to include investing in CBILS loans.
“By investing in our fund, investors can earn attractive risk-adjusted returns whilst contributing to economic growth and job creation,” said Sachin Patel, chief capital officer of Funding Circle.
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“This latest support from BBI demonstrates the vital role fintechs play in facilitating loans to small businesses whatever the weather. We look forward to welcoming more investors in the near future.”
BBI – which is a commercial subsidiary of the British Business Bank (BBB) – has made a series of financial commitments to Funding Circle over the past seven years.
Read more: Winding-down Funding Circle fund reveals most borrowers are making full repayments
“One of the objectives of BBI is to support the development of diverse finance markets,” said Judith Hartley, chief executive of BBI.
“We have supported the growth of fintech and marketplace lenders since its early stages, and lenders like Funding Circle help provide competition and choice to smaller businesses. By making this commitment, more smaller businesses across the UK can get the finance they need to fulfil their growth potential.”
To date, Funding Circle’s institutional investors have included the British Business Bank, the European Investment Bank, the Merseyside Pension Fund, and financial institutions such as asset management and insurance companies.
Read more: ThinCats secures first funding line from British Business Bank
