Funding Circle to raise £150m in listed fund for small businesses

Young Gun-founded P2P lender said to be first business of its kind to tap into the public market

Peer-to-peer (P2P) lender Funding Circle has announced plans to launch a fund on the main market of the London Stock Exchange (LSE) with the aim to raise £150m which it will invest into small and medium businesses in the UK and America which use its platform.

The Funding Circle SME Income Fund will be led by Goldman Sachs and marks Funding Circle as the first P2P business to tap into public markets.

The fund is is targeting 8-9% returns per year, with a dividend yield of 6-7% and investors will be able to put the fund into ISAs which will mean that investing in the platform will become tax free.

Founded in 2010 by Young Guns Andrew Mullinger, Samir Desai and James Meekings, Funding Circle represents an alternative to traditional bank lending and has scaled to become one of the world’s biggest online business lenders, facilitating more than £500m worth of deals to date.

Last year the business raised $65m to fuel international growth and in July of this year the company announced a partnership with Sage to help more small businesses access finance.

Funding Circle CEO Desai said of the news:”This will be the first fund to exclusively lend to small businesses through the Funding Circle marketplaces, and is a response to the huge demand we’re seeing from a wide range of investors for small business loans.

“Today marks an important step on our journey to creating a global marketplace where any investor, big or small, can lend to small businesses across the world”.

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