Victory Park Capital Partners with Funding Circle to Support Thousands of Small Businesses in the UK and the US
Feb 19, 2015
US / UK, 19 February 2015 – Funding Circle, the world’s leading online marketplace for small business loans, today announces that Victory Park Capital, an asset management firm based in the US and an active lender to UK and European companies, will finance up to $420 million in loans to small businesses originated through Funding Circle both in the UK and US over the next three years.
This new, long-term agreement, which significantly extends the existing relationship between Funding Circle and Victory Park Capital, will allow Funding Circle to provide a much needed further injection of funding into the small business sector and reflects the strong growth of Funding Circle globally over the past twelve months. Funding Circle has now facilitated more than $850 million in loans to 8,000 small businesses globally.
Victory Park Capital has been actively involved in the marketplace lending sector since 2010 and has made more than US$2.2 billion of investments and commitments across a number of financial technology platforms, multiple geographies (US, UK and Europe), products (consumer and business) and structures (whole loans and senior credit facilities).
The investment combines cutting-edge technology with market leading financial solutions. Victory Park Capital was an early institutional partner to Funding Circle in the US and this new funding will be invested across all risk bands, in accordance with Funding Circle’s industry-leading credit criteria.
Gordon Watson, Principal of Victory Park Capital, commented: “Funding Circle has experienced tremendous growth over the past year and we are pleased to expand our on-going partnership to both sides of the Atlantic. With this additional lending facility, Funding Circle will be well-positioned to continue to disrupt the traditional banking model through 2015 and beyond.”
Samir Desai, CEO and co-founder of Funding Circle, added: “We’re pleased to be welcoming additional new financing to the marketplace, which will further support small businesses. Today’s news is a significant step on our journey to creating the global infrastructure where any investor, big or small, can lend to creditworthy small businesses looking to grow.”
Sachin Patel, Head of UK Capital Markets at Funding Circle, said: “Partnering with Victory Park both in the UK and US is testament to our proven track record in facilitating loans with attractive yields and consistent credit performance. Funding Circle is opening up an asset class to investors that has previously only been available to high street banks.”
Launched in 2010, Funding Circle is helping to spark a global revolution in the way small businesses access finance, disrupting the traditional model of banking. Funding Circle’s proven model enables businesses to access finance in a matter of days, directly from investors who earn high, stable returns.
Through Funding Circle, businesses typically access the capital they need in seven days compared to 15-20 weeks with a bank. Independent research* has found that three in four businesses would come to Funding Circle first in future, ahead of a bank.
Notes to editor
*Nesta, Banking on Each Other: The rise of peer-to-peer lending to businesses
About Victory Park Capital
Victory Park Capital Advisors, LLC (“VPC”) is a privately held, SEC-registered, global alternative investment firm. VPC provides opportunistic capital solutions to both emerging and established businesses with an expertise investing across various sectors where traditional sources of capital are limited. The firm’s differentiated offerings leverage an extensive network of industry relationships, disciplined deal origination, creative financing capabilities and broad credit structuring and special situations expertise. The firm was founded in 2007 and is headquartered in Chicago with additional offices in New York, Los Angeles and San Francisco. For more information, please visit www.victoryparkcapital.com.
About Funding Circle
Funding Circle (www.fundingcircle.com) is the world’s leading online marketplace for business loans, enabling investors to directly lend to small businesses in both the UK and the US. Since launching in the UK in 2010, investors have now lent more than $850 million to over 8,000 businesses globally via Funding Circle’s marketplace, and currently lend $70 million per month.
In the UK,businesses can borrow between £5,000 and £1 million, while investors can earn a 6.3%* average return after fees and bad debt. Investors include thousands of individuals, the Government-backed British Business Bank,** local councils, financial organisations and the University of Huddersfield. Funding Circle was the first marketplace to announce a formal referral partnership with Santander, one of the UK’s leading high street banks, and has since announced a similar referral arrangement with RBS.
In the US, Funding Circle’s online marketplace allows accredited investors and institutions to invest in small businesses seeking to borrow $25,000 to $500,000. Investors can choose to either lend small amounts to many businesses, or buy whole loans. A passive fund is also available.
* This is the weighted average return across all investors lending for one year or more through Funding Circle over an annualised period. It includes all earnings and is calculated after fees and bad debt but before tax. Investment through Funding Circle involves lending to small and medium sized businesses so your investment can go down as well as up. Remember, past returns are not necessarily a guide to future returns. Data correct as of 19 January 2015.
** The British Business Bank Investment Programme is a part of the British Business Bank programme, which is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. British Business Bank plc operates as a Government-owned financial institution. HM Government received European Commission State aid clearance in October 2014.
Victory Park Capital (UK press office)
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