Santander to refer small business owners to peer-to-peer lender Funding Circle
First UK high street bank to encourage customers to look at alternative finance options
Santander has announced that it is to begin referring its small business customers seeking loans to online peer-to-peer lending service Funding Circle in a first of its kind partnership.
Said to give “thousands of small British businesses greater access to finance”, the deal sees Santander become the first UK high street bank operator to embrace alternative finance methods by encouraging customers to consider Funding Circle’s business loans.
The referral agreement, which will take place via Santander’s website and in letters to customers, also requires Funding Circle to promote the banks current account and cash management services which it will signpost on its site.
Founded in 2010 by Young Guns Samir Desai, Andrew Mullinger and James Meekings, Startups 100-listed Funding Circle allows companies to pitch for business loans on its platform by raising money from private investors on the site.
Since its launch the platform claims to have facilitated over £296m in loans to over 5,000 businesses.
The major deal between the two firms is not exclusive and could set a precedent for Funding Circle to sign similar deals with other banks.
Sanatander UK CEO, Ana Botin, discussed the deal:
“Small and medium enterprises need access to multiple sources of finance, and Santander’s partnership with Funding Circle is a good example of how traditional and alternative finance can work together to help the nation’s small businesses prosper.
“Peer-to-peer financing is also a useful way to introduce people to the concept of investing in entrepreneurs; an important element in a healthy enterprise economy.”
Funding Circle CEO and co-founder, Samir Desai, continued: “This partnership recognises our role as the only marketplace that caters for, and is dedicated to, small businesses. In Santander we have found a fellow challenger brand that shares our commitment to putting small business customers’ needs first.”