LONDON (Alliance News) - Funding Circle SME Income Fund Ltd said Tuesday it has established a funding transaction for loans to small and medium-sized businesses of up to GBP150 million.
The transaction will come via Funding Circle's UK platform and through the British Business Bank's Enable Funding Programme.
The UK Department for Business, Energy & Industrial Strategy - the British Business Bank's sole shareholder - will provide up to GBP150 million of funding via a senior, floating rate, loan.
Funding Circle SME will participate in the transaction by way of a junior investment. Subject to "prevailing market conditions", the company may consider refinancing the facility via public asset-backed security markets to "enhance returns further".
"The board welcomes this opportunity to work alongside the BBB to help achieve one of its key goals of increasing lending to the real economy by utilising an efficient transmission mechanism for stimulating lending to SME borrowers, whilst securing ongoing access to financing for shareholders," said Chairman Richard Boleat.
Funding Circle SME said the funding will be drawn down to replace its existing facilities, "as they are scheduled to amortise over the coming years".
Shares in Funding Circle SME closed down 0.4% at 96.00 pence each.