Fintech P2P Lending Platform Gains £40m From the UK Government

Funding Circle, a UK-based Fintech unicorn startup has received £40m from government-owned British Business Bank to directly fund small businesses through its platform, which matches investors with businesses looking to borrow.

With an aim to spur and support economic growth, the BBB acts as a financier to small and medium sized businesses. Altogether, the UK government has now invested £100 million on Funding Circle’s platform. The latest investment follows an initial £40 million by the bank in Funding Circle in 2014. Preceding that, the UK government began its investment in Funding Circle with £20 million in 2013.

Set up in 2012 by the UK Government, the BBB began with £1 billion of funding to increase financing to small and medium enterprises through partners and intermediary platforms such as Funding Circle. In turn, Funding Circle will loan the money it has secured from the BBB to UK businesses. Over 10,000 businesses have seen lending from the £60 million prior to the latest funding, the announcement read. An estimated 30,000 jobs have been

created as a result of the financing.

Further, the government bank has earned over £5 million in interest, counting fees and bad debt, ‘on behalf of the UK taxpayer’.

In a quote reported Business Insider, BBB Investments CEO Catherine Lewis La Torre pointed to the growing prominence of peer-to-peer lending in the finance industry.

She stated:

Peer-to-peer lending is becoming an increasingly important source of finance for smaller businesses, with AltFi data showing an 85% increase in lending via the sector from 2014 to 2015.

Meanwhile, Funding Circle has reportedly facilitated the lending of over £1.7 billion since 2010. The BBB is among other financial institutions, local councils and the European Investment Bank to participate as investors on the platform, alongside 55,000 individual investors. The £1.7 billion has been invested in over 18,000 small UK businesses which has reportedly generated £2.7 billion within the UK economy.

Image from Shutterstock.

 

https://www.cryptocoinsnews.com/fintech-p2p-lending-platform-gains-40m-from-the-uk-government/

Valerie Krutanova