The British government has given another £40m ($66.72m) to person-to-person lender Funding Circle for distribution to UK businesses.
Under the arrangement, the government’s contribution will be used to fund 10% of each borrower request, with the other 90% coming from private investors using the site’s marketplace platform.
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The platform is a marketplace for small to medium businesses to secure loans from private investors. Current borrowers include a burlesque club, LED furniture builders and a wine company.
The £40m sum will be given through the government’s new British Business Bank. Whilst the bank will by default invest in all borrower’s requests, the body states that its involvement is not an endorsement, recommendation or warranty about the borrowers creditworthiness.
The British Business Bank’s money will be lent at the same rate as the private investors.
This latest government funding is on top of the £55m contribution the government made to four major P2P players in March 2013.
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By GlobalDataThe initial payment was split between Funding Circle, Zopa, Boost and Credit Asset Management and came as a result of mounting frustration with high street banks’ unwillingness to lend to small to medium sized businesses.
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