BBG commits £150m for lending to SMEs
The British Business Bank (BBG) has committed up to £150m for lending to UK small businesses – via the Funding Circle lending platform – and this is expected to support the growth of more than 2,000 SMEs. For the full story please read the bulletin below which was issued today by Insider Media.
Roger Mundy, Managing Director, Beardsley Theobalds, 28th November 2018
British Business Bank unveils new £150m commitment with Funding Circle
The British Business Bank has committed up to £150m for lending to UK small businesses through the Funding Circle loans platform.
The transaction, under the bank's ENABLE Funding programme, is designed to accelerate lending to small businesses and is expected to support the growth of more than 2,000 UK companies.
The new facility will provide senior financing to a transaction with the Funding Circle SME Income Fund Ltd (FCIF), a publicly traded fund that lends exclusively through Funding Circle.
This new commitment extends the existing partnership between Funding Circle and the UK government.
Since March 2013 £165m has been lent directly to the small business ecosystem through Funding Circle using the British Business Bank's programmes, earning about £10m in cumulative net interest for the taxpayer.
British Business Bank chief executive Keith Morgan said: "Encouraging the development of new types and providers of finance is a key objective for the British Business Bank.
"We have supported the growth of peer-to-peer 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."
Small business minister Kelly Tolhurst said: "The UK's 5.7 million small businesses are the backbone of our economy, and ensuring we cement our status as one of the best places in the world to run a business is fundamental to our 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 peer-to-peer lending to help them realise their full potential."
Sachin Patel, chief capital officer at Funding Circle, added: "This significant commitment further strengthens our successful partnership with the British Business Bank and is a reflection of the work we're doing to provide investors with attractive, 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."