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British Business Bank provides £40m extension to Funding Circle lending

The government-backed investment firm, British Business Bank, has announced an eight-figure expansion to its lending efforts on direct lending platform Funding Circle.

Following on from the £60m that the British Business Bank has provided to more than 10,000 UK businesses, the development bank will today begin lending a further £40m to the country’s small business community.

According to the bank, its efforts on the platform have so far created an estimated 30,000 new jobs, while obtaining around £5m in cumulative net interest for the taxpayer and has helped to establish alternative finance as a mainstream source of business funding.

Catherine Lewis La Torre, CEO of British Business Bank Investments Ltd, described so-called, ‘AltFi’, as an increasingly important source of business finance with an 85% increase in alternative lending between 2014 and 2015.

She added: “A key part of our remit is to support the development and growth of such finance markets, while earning an attractive, commercial return for the taxpayer. We look forward to seeing our latest commitment to Funding Circle enabling the growth and success of many more businesses across the UK.”

Bringing together a raft of different lenders including investors, local authorities and financial institutions, Funding Circle provides small businesses with a source of direct funding while offering investors returns of over 7% on its peer-to-peer (P2P) lending platform.

James Meekings, Co-Founder and UK Managing Director of Funding Circle commented: “This further lending commitment is recognition of the success of the partnership to date and we look forward to working with the British Business Bank to help thousands more small businesses.”

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