The European Investment Bank (EIB) has announced a £100 million investment for U.K. SMEs that will be lent through the Funding Circle platform following reports earlier this year that the marketplace lending site was in the final stages of such a deal.
Reports on Monday (June 20) said EIB will provide the investment, worth about $147 million, that will combine with Funding Circle’s own $37 million from its SME Income Fund and be issued as new loans over seven years.
The deal marks EIB’s first funding through a direct marketplace lending platform, reports added.
“Investment by small businesses drives economic growth, and simple, efficient access to finance is essential to help small companies to expand, create jobs and harness new opportunities,” said EIB Vice President Jonathan Taylor in a statement. “This new and exciting partnership with Funding Circle demonstrates the European Investment Bank’s firm commitment to seeking out new ways to stimulate business investment across Europe.”
Taylor added that the investment “also provides an innovative model for supporting SMEs that could be used elsewhere in Europe.”
In a separate statement, Funding Circle Cofounder and CEO Samir Desai said the deal was groundbreaking.
“Our partnership with the European Investment Bank is the first of its kind and represents another important step on our journey to creating a global marketplace where creditworthy businesses borrow from a diverse range of investors,” he said. “This significant investment will ensure more businesses access the finance they need to grow and will help support economic growth and job creation across the U.K.”
Last March, reports emerged that Funding Circle was in the later stages of securing a deal with the European Investment Bank, though details were not released on how much it would look to raise.