FUNDING Circle said it has reached a key milestone as more than £200m has been lent to over 3,000 UK businesses via its peer-to-peer lending marketplace since its inception three and a half years ago.
Of the £200m total, £130m was lent to businesses in 2013 alone, Funding Circle said. In Yorkshire and the Humber, £12.3m has been lent to more than 200 businesses via the Circle since its launch.
The average loan size is approximately £60,000 and the most popular reasons for borrowing are working capital and expansion capital, a spokeswoman for Funding Circle said.
James Meekings, co-founder of Funding Circle, said: “Over the last three years, Funding Circle has provided businesses with a faster, more efficient way of accessing the finance they need.
“What we are seeing now is not just the emergence of a challenger model but a fundamentally better method of borrowing and lending that will continue to grow in importance over the coming years.”
Funding Circle, which launched in August 2010, launched a partnership with the University of Huddersfield last year.
The deal sees the university invest in firms through Funding Circle, with any interest earned channelled into scholarships for disadvantaged students on its enterprise development degree.
To be eligible to raise finance via Funding Circle, businesses must have a minimum turnover of £100,000 and have been trading for at least two years. Once businesses pass Funding Circle’s credit assessment processes, their loan is posted on the marketplace.
From here, investors choose which type of businesses to lend to, and bid the amount of money they wish to lend, and the interest rate they want to earn.
Investors can bid small amounts, from as little as £20, on lots of different businesses to spread their risk.