Alternative lending firm Funding Circle announced it has reached $2 billion in small business loans facilitated through its platform, a figure that it says exceeds some traditional U.S. bank SMB loans.
In a press release on Friday (March 1), Funding Circle said its U.S. small business loan volume has given its SMB loan portfolio greater than “almost 98 percent of FDIC-insured banks,” citing FDIC statistics on outstanding loans of less than $1 million.
“The fact that we have reached this milestone within a little more than five years, putting us in the same league as some banks established a century ago, is evidence that small businesses are underserved by the traditional banking system,” said Funding Circle U.S. Managing Director Bernardo Martinez in a statement. “Our aim is to become businesses’ first choice for financing across the country by continuing to look for more ways to drive a better, faster borrowing experience.”
At present, Funding Circle said it holds more than $1 billion in small business loans.
Last year, the FDIC warned that the actual value and volume of small business bank loans in the U.S. may be significantly underestimated as a result of banks only reporting SMB loans under $1 million. Furthermore, the FDIC noted, banks are not including loans that are secured by residential real estate in their SMB loan volume reports.
There is also a wide gap between different banks’ definitions of a small business loan, further impeding visibility into the true value of outstanding small business bank loans in the U.S. today.
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“There is no comprehensive measure of small business lending by banks,” the FDIC said.
