Social lending platform Funding Circle launches as a Zopa-for-SMEs
A sort of Zopa-for-small businesses, the ‘social lending platform’ facilitates loans to SMEs instead of individuals, giving lenders the opportunity to get an estimated 6 to 9 per cent return on their money. It’s also possible for lenders to get their money back before a loan is repaid by reselling their part of the loan onto other lenders, a first says the company and something that they think will be popular since in this instance interest can be earned immediately without the need to wait for the loan arrangement to be completed.
Individuals can lend between £20-2,000 per business and there is no limit on the total amount that can be lent. Additionally, lenders can club together in ‘Circles’ – hence the startup’s name – to lend to businesses with similar values. So for example, an “environmental circle” could work together to lend to environmentally friendly businesses.
Funding Circle is co-founded by Samir Desai (formerly of Olivant & the Boston Consulting Group), James Meekings (formerly of OC&C Strategy Consultants) and Andrew Mullinger (formerly of Citigroup, Ernst & Young and Nomura). The London-based company is angel funded to the tune of $1.1m from undisclosed private investors.