Kickstarter for SMBs
Funding Circle has raised $16 million in Series B funding from existing backer Index Ventures and new investor Union Square Ventures, in a round that brings its overall funding to $21 million. Billed as a kickstarter, UK-based Funding Circle provides loans to small- and medium-sized businesses that have demonstrated profitability and have two years filed accounts. The company says that it is planning to spend the new funding on marketing, recruitment and improving its product.
Launched in 2010, the firm says it has already made loans to 670 British businesses, shelling out £28 million ($45 million) to date. The firm says it is paying out around $1 million each week, and claims loans can be arranged in a matter of days, bypassing lengthy traditional bank applications. Funding Circle says banks currently preside over 90% of SMB lending in the UK, a customer pool it is attempting to break into. “I don’t see why we couldn’t eventually get to a stage where we had about 10% of that market,” says co-founder James Meekings, with the sector estimated to be worth $70 billion annually.
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