Funding Circle, a top direct lending platform for small businesses, has announced it is now fully authorised by the Financial Conduct Authority.

From Strength to StrengthFCA

Funding Circle is the second of the big three peer-to-peer lenders to receive full FCA authorisation, after consumer lender Zopa received its authorisation earlier in the month.

Funding Circle focuses on matching established and creditworthy businesses who want to borrow with investors who want to lend in the UK, US and Europe. They manage risk by ensuring that investors lend small amounts to hundreds of different businesses, all of whom are first assessed by an experienced credit team. Investors also have the option to access money early by selling loan parts to other investors on Funding Circle’s secondary market.

Investors at Funding Circle include 60,000 individuals, local and national government bodies, the UK government-owned British Business Bank, the European Investment Bank and financial institutions. Since 2010, they have lent more than £2.9 billion ($3.7 billion) to 30,000 businesses worldwide. Funding Circle has raised £250m in equity capital from the same investors that backed Facebook, Twitter and Airbnb.

Funding Circle’s statement said that ‘by bringing together industry leading risk management and cutting-edge technology, investors have earned an average 6.5% per year and £116 million of net interest over the last seven years.’

A Bright Future

Funding Circle will now be able to launch their planned Innovative Finance ISA, subject to approval by HMRC.

James Meekings, UK Managing Director and co-founder of Funding Circle, said: “Our vision is to support thousands of people across the UK to earn stable, industry leading returns by lending directly to small businesses. With more than 60,000 investors now regularly lending through Funding Circle, we are on track to becoming a mainstream investment choice for investors up and down the country.”