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.
“There is no comprehensive measure of small business lending by banks,” the FDIC said.