The UK peer-to-peer lender said the funds will be directed at small firms in Germany and the Netherlands.
Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.
The UK peer-to-peer business lender, run by co-founder and chief executive Samir Desai (pictured, centre), said the loans will be originated through its German and Dutch platforms over a nine-month period.
The companies said the move is part of a long-term partnership with the “amount expected to increase in 2020”.
Stockholm-based Avida, founded in 1983, said the deal is part of its plan to boost its lending to €1bn by next year.
FTSE 250 group Funding Circle said Avida will join a range of small business backers, such as the European Investment Bank, local and regional governments, pension funds and more than 90,000 individual investors.
Funding Circle, founded in 2010, said Avida said the move was the first time a Nordic financial institution has invested in small business loans through a lending platform.
Funding Circle continental Europe managing director Panni Morshedi said: “Lending platforms have opened up the SME loan asset class to a variety of investors thereby ensuring that the engine of the real economy has access to much-needed finance.”
Avida Finans chief executive Tord Topsholm added the deal “gives us an excellent complement to our home market in the Nordic region as we now have the opportunity to reach a market we could not tap into without Funding Circle's platform”.
Funding Circle operates in the UK, Germany, the Netherlands, and the US.