EIB and Funding Circle tie up to lend £200 million to UK SMEs
(21 June 2016 – Europe) The European Investment Bank (EIB) has agreed to a £100 million (A$197 million) investment in loans to UK small businesses originated through online marketplace, Funding Circle.
In a statement, the EIB said: “this investment, alongside £25 million from the Funding Circle SME Income Fund, will enable over £200 million of new loans over seven years, and provides a further injection of much-needed funding into the UK small business sector.”
The partnership between EIB, who has provided £3 billion for investment by small businesses in the last decade, and Funding Circle represents the first deployment of the European bank’s funding through a direct lending marketplace to support small businesses. Improving access to finance for small and medium sized businesses is a key priority for the European Investment Bank.
According to the online lender, it has facilitated more than £1.25 billion of loans to 16,000 businesses in the UK since is 2010 launch.
Jonathan Taylor, European Investment Bank Vice President said “…simple, efficient access to finance is essential to help small companies to expand, create jobs and harness new opportunities,”
“The £100m backing will not only unlock over £200m of new investment by small businesses across the UK, but also provides an innovative model for supporting SMEs that could be used elsewhere in Europe.”
Samir Desai, CEO and co-founder of Funding Circle added: “Our partnership with the European Investment Bank is the first of its kind and represents another important step on our journey to creating a global marketplace where creditworthy businesses borrow from a diverse range of investors. This significant investment will ensure more businesses access the finance they need to grow and will help support economic growth and job creation across the UK.”
According to the Federation of Small Business, there are currently more than 5.4 million small businesses in the UK accounting for 99.3 percent of all private sector business. Collectively small businesses make up 50 percent of GDP and 60 percent of employment.
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