The lender, which launched in 2010, had previously been exclusive to the UK’s 1.3 million limited companies, but will now be extended to reach out to sole traders and partnerships.
The move comes at a time when partnerships and sole traders represent over 70 per cent of all businesses within the UK and access to affordable credit is highly sought after.
Funding Circle will be able to offer these prospective borrowers’ similar terms to its normal criteria, with loans available from £25,000 to £1 million.
Laura McMullen, Business Development Director, said: “Our vision for Funding Circle is to help as many businesses as possible across the country flourish by accessing the finance they need in the fastest and simplest way, and enabling investors to earn a fair return. Today millions more well-established firms will be able to tap into the peer-to-peer revolution for the first time.”
“Peer-to-peer lending is the most efficient way for businesses to borrow. On average, business owners access the finance they need in a matter of days not months, freeing them up to get on with running their company. Over time we believe borrowing through Funding Circle can account for 10-20 per cent of the small business lending market. To achieve this we will keep innovating and introducing new products that allow us to help even more businesses”.
Since its launch in 2010, Funding Circle has helped more than 2,000 limited businesses to borrow in excess of £130 million.
50,000 people have now joined Funding Circle lending alongside the British Government, businesses, universities and a number of local councils. In the last month, investors lent a record £14 million to businesses across the UK, more than three times the amount lent in July 2012.
David Foster, Managing Director at the finance broker Anglo-Scottish, said: “We welcome the introduction of sole traders and partnerships to Funding Circle particularly as a large proportion of our customers fall into these categories. We are already working on a number of cases and we expect to complete our first loan in the coming weeks.”
Businesses looking to apply will need to have at least two years’ worth of accounts and trading history, have no county court judgements (CCJs) over £250 and pass Funding Circle’s full credit assessment.
The non-limited companies will be put into the same A+ to C- risk bands as limited companies according to their level of risk and level of expected bad debt.
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