Funding Circle offers peer-to-peer lending for business funding

Country: London, UK

Year: 2010

Concept

  • Funding Circle is a global platform that connects businesses that want to borrow with investors. This online marketplace for business loans allows people to lend money directly to SMEs
  • It was the first website to offer peer-to-peer lending for business funding in the UK. The startup now operates in the UK, US, Germany, and the Netherlands
  • It has raised over $410 million from different investors
  • Lenders can pick the SMEs they want to lend their money to. They can also choose to have their money directly and automatically allocated
  • Furthermore, the investors can also grand loans to specific companies that meet particular criteria such as being environmentally friendly
  • In 2015, the overall portfolio has delivered 8% for the whole loan marketplace. In January 2017, Funding Circle has lent over $3 billion to over 25,000 businesses through its platform

Consumer Benefits

  • Facilitate company financing: it works on any kind of businesses, and it is a great solution for companies that struggled to find sources of finance
  • Good ROI for investors: looking to diversift their investments. To reduce the risk, investors can lend small amounts to multiple creditworthy businesses

How to use

  • The businesses that apply to Funding Circle are reviewed by a credit assessment team
  • If the companies pass the assessment process, they get a risk bands from good to excellent
  • Businesses can then borrow money through the platform. They post their funding requests on the marketplace
  • Lenders pick the businesses they want to invest in, they choose the bid they want to lend and the interest rate they want to earn

Illustration