The City Council has allocated £100,000 to be invested via the peer-to-business lending platform. The hope is that the funds will both stimulate local businesses and lure the funding of further local investors to the platform. Eight UK councils so far have turned to Funding Circle to boost SME finance in their locality, providing several million pounds to businesses. Funding Circle believes council interest in the platform is on the rise.
“So far, £7m has been lent by five councils and a further three, including Newcastle, have recently started to lend.
“We strongly believe this network will evolve over the next period to create a blueprint for an equivalent 21st Century regional banking network.
“This partnership with Newcastle City Council will allow us to help even more of the region’s businesses going forward.”
The Government put £20 million to work through the Funding Circle platform in 2013 – a sum that helped to make loans to over 2,000 businesses and create over 6,500 jobs. Earlier this year, the government again pumped money through the Funding Circle platform – this time £40 million via the British Business Bank. Apparently on the verge of coupling widespread regional support with state backing, Funding Circle look set to become an indispensable distribution channel for SME finance in the UK.