Sheffield’s British Business Bank is committing up to £150 million for small businesses via global small business loans platform Funding Circle.
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 firms.
The new facility will provide senior financing to a transaction with the Funding Circle SME Income Fund Limited (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 £165 million has been lent directly to the small business ecosystem through Funding Circle using the British Business Bank’s programmes, earning around £10 million in cumulative net interest for the taxpayer.
In 2017 alone, such lending is estimated to have created and sustained around 2,100 jobs across the UK.
Keith Morgan, CEO of British Business Bank, 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.”