Markets Aug 13, 2015 04:40 AM EDT

Funding Circle lines up $1B funding for small business lending globally

By Staff Writer

The Funding Circle has earmarked $1-billion funding for small business globally and will make this financing in a hassle-free and much-simplified process.

Considering the requirements of fragmented small businesses, Funding Circle has been providing easy financing options to budding entrepreneurs at much lower cost of borrowing via its marketplace.

With the major chunk of funding going into the US and UK markets, Funding Circle has already surpassed $1-billion mark in terms of funding globally. The lending volume in the first quarter of 2015 grew seven times than the corresponding period of the previous year. Funding Circle is providing financial support to small businesses in a revolutionary way since its inception in 2010.

Small businesses are mostly fragmented and unable to access better banking products. The small business finance provider is in the continuous process of making funding available in a hassle-free manner.

Cutting across the traditional and tedious ways of a conventional banking system, Funding Circle aims at providing financing assistance. The Funding Circle aims at offering a sustainable, category-defined business and meeting the requirements of small business units globally. The Funding Circle has emerged a major online marketplace for business financing. 

Along with risk management, Funding Circle's marketplace enables small business owners to access a variety of financing products. Strengthened by its risk management and advanced technology, Funding Circle is transforming the small business financing by offering efficiency, transparency and a better customer service.

The realization of Sam Hodges, the co-founder, has led to the creation of better funding product. Long ago, he was flooded with brokers when he developed a successful gym franchise. Brokers were offering him a gamut of funding products.

After thoroughly analyzing the each funding product, Hodges noticed that how expensive these products for a small business. This experience changed his perception and inspired him to develop an ideal funding solution for small business entrepreneurs. 

Recently, Funding Circle raised $150million in equity capital. DST Global, Baillie Gifford, Sands Capital Ventures and Temasek participated in equity raising for Funding Circle. The equity raising round was oversubscribed. Goldman Sachs was exclusive placement agent. Funding Circle is planning to use the new funding for consolidation of the markets in the US and the UK. Funding Circle aims at further business financing growth that would help cover more and more small business units. 

The interest rates at Funding Circle vary from 5.49% to 22.79% depending upon the nature of the business, loan amount and tenure. Funding Circle offers transparency in interest rates and other conditions. The entire list of interest rates is displayed on Rates and Fees page on its website. 

Small business entrepreneurs can access a number of investors through the Finding Circle marketplace. The Funding Circle marketplace has emerged as the fifth largest lender to the small business segment in the UK. It is also registering robust growth in the US market as well. 

Funding Circle's CEO and co-founder Samir Desai is confident of making its marketplace as the future of small business financing globally. Until April 2015, Funding Circle raised $273 million in equity funding. The existing investors are Index Ventures, Accel Partners, Union Square Ventures and Ribbit Capital. Funding Circle in 2014 raised $65million through Series D round.

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