Funding Circle calls itself a global SME loans platform, connecting SMEs (Small-to-Medium Enterprise) who want to borrow with investors, who want to lend in the UK, US, Germany and the Netherlands.
Since launching in 2010, investors across Funding Circle’s geographies – including more than 80,000 retail investors, banks, asset management companies, insurance companies, government-backed entities and funds – have lent more than £5 billion to over 50,000 businesses globally.
It’s an admirable business offering, which has stepped in to support SMEs where many banks have feared to tread and also offered lenders a far more attractive rate of return than they might have achieved through traditional savings channels.
- Key difference to other lenders
The key difference to traditional lenders is that Funding Circle operates a lending ‘platform’, without actually holding the loans on its own balance sheet.
It generates revenue in two primary ways:
(i) a transaction fee typically…
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