Funding Circle have formed a further two partnerships with local councils in its continued attempt to boost lending to small businesses.
Two Suffolk councils, Babergh and Mid Suffolk, are the latest boroughs to join forces with the peer-to-peer business lender.
Babergh and Mid Suffolk councils will each invest an unprecedented £1m each through Funding Circle and will lend in tranches of £100k each, with roughly half going to help local business across Essex, Norfolk and Suffolk. Both councils will use the returns to protect local public services.
According to Babergh Council Leader Cllr. Jennie Jenkins,
“This investment highlights our diversified approach to investing and our agreement with Funding Circle, with their proven ability to grade risk, it provides us with more control over the types of return we might expect. This allows us to operate in a responsible and prudent manner, while seeking high returns which can be used to protect and improve public services”.
Cllr. Derrick Haley, Leader of Mid Suffolk District Council explained:
“We really liked the fact that when it came to investing in local businesses, Funding Circle were clear that we were in the driving seat and would decide which companies to back. We are both very focused on sustainable economic growth by boosting jobs and businesses and we believe that through investments of this sort we will be able to make a direct contribution to the long-term success of growing local companies.”
Babergh and Mid Suffolk make up an 18-borough partnership with Funding Circle that includes the likes of Lancashire, Leicestershire, Lambeth and Camden Councils.
In an article back in March we discovered that between Funding Circle and Lancashire County Council they had provided £1.5m to 230 local businesses.
The investment through Funding Circle is the largest single amount from any district or borough council in the country and reflects both councils’ determination to protect services as well as boost the local economy through small businesses.
Natasha Jones of Funding Circle said:
“This partnership is our largest so far with a local authority and shows the increasing appeal amongst councils to have a greater role in stimulating economic growth and employment in their area. Babergh and Mid Suffolk’s investments bring the total direct lending from local authorities to just over £8 million. This will be a huge boost to businesses both in the local area and across the UK.”
Building partnerships like these are pivotal to not only providing finance to small businesses but also educating them about the different options that are available to them.