Proposed Ordinary Share Placing

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OR TO US PERSONS.

This announcement is an advertisement and not a prospectus. It does not constitute an offer for sale or subscription or to buy any securities. Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information contained in the prospectus (the "Prospectus") published by Funding Circle SME Income Fund Limited (the "Company") on 12 November 2015 and any supplementary prospectus published since the date thereof (the "Supplementary Prospectuses") in relation to issues of new shares by way of a Share Issuance Programme. Copies of the Prospectus and any Supplementary Prospectuses are available from the Company's website www.fcincomefund.com.

Guernsey, 12 July 2016

FUNDING CIRCLE SME INCOME FUND LIMITED

PROPOSED ORDINARY SHARE PLACING

Further to the announcement on 17 June 2016, and with over 90 per cent. of net IPO proceeds invested, the Company confirms that it is seeking to undertake a capital raise of between £10 million and £15 million (before costs and expenses) under the ongoing Share Issuance Programme established in the Prospectus. The Company reserves the right to increase the size of the issue in light of investor demand.

The Share Issuance Programme was established as a flexible mechanism for the Company to issue Ordinary Shares or C Shares over a period of time to satisfy market demand. The Company has resolved that the proposed capital raise will be in the form of new Ordinary Shares at a premium of 2 per cent. to the net asset value of the Company to be announced on 14 July 2016.

The Board anticipates that the proceeds of the capital raise will be invested on a basis consistent with the Company's return targets.

The indicative timeline for the proposed capital raising is set out below:

Goldman Sachs International ("Goldman Sachs") is acting as Sponsor, Global Co-ordinator and Bookrunner in relation to the Share Issuance Programme and Numis Securities Limited ("Numis") is acting as Co-Bookrunner in relation to the Share Issuance Programme.

CONTACTS

Richard Boleat, Chairman+44 (0) 1534 615 656Richard.Boleat@fcincomefund.com

Secretary and AdministratorSanne Group (Guernsey) LimitedFundingCircle@sannegroup.com+44 (0) 1481 739810

Corporate BrokersGoldman Sachs InternationalDaniel Martin

Chris Emmerson+44 (0) 20 7774 1000

Numis SecuritiesNathan Brown+44 (0) 20 7260 1000n.brown@numis.com

Website www.fcincomefund.com

FURTHER INFORMATION

Capitalised terms used in this announcement shall have the meaning given to them in the Company's prospectus dated 12 November 2015 (the "Prospectus") (unless the context otherwise requires).

Participation in the Share Issuance Programme is open only to qualified investors as defined in section 86(7) of the Financial Services and Markets Act 2000 (as amended). The decision to allot new Ordinary Shares to any qualified investor shall be at the absolute discretion of the Company (after consultation with Goldman Sachs and Numis).

ABOUT FUNDING CIRCLE SME INCOME FUND

The Company is a registered closed-ended collective investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended and the Registered Collective Investment Scheme Rules 2015 issued by the Guernsey Financial Services Commission (''GFSC'').

The Company's investment objective is to provide shareholders with a sustainable and attractive level of dividend income, primarily by way of investment in Credit Assets as defined in the Company's Prospectus.

IMPORTANT NOTICES

This announcement contains "forward-looking" statements, beliefs or opinions. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of the Company and all of which are based on its directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "projects", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events, assumptions or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Board or the Company with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business concerning, amongst other things, the financial performance, liquidity, prospects, growth and strategies of the Company. These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement. Nothing in this announcement is, or should be relied on as, a promise or representation as to the future. The Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure Rules and Transparency Rules of the FCA. No statement in this announcement is intended as a forecast or profit estimate.

Neither this announcement nor any copy of it may be made or transmitted into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the "United States"), or distributed, directly or indirectly, in the United States or to US Persons (as such term is defined in Regulation S under the US Securities Act of 1933, as amended (the "Securities Act"). Neither this announcement nor any copy of it may be taken or transmitted directly or indirectly into Australia, Canada, Japan or South Africa or to any persons in any of those jurisdictions, except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for securities in the United States, Australia, Canada, Japan or South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

Any securities mentioned in this announcement have not been and will not registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

This announcement has been issued by and is the sole responsibility of the Company. Each of Goldman Sachs and Numis Securities (together the "Banks") and their respective affiliates expressly disclaim any obligation or undertaking to update, review or revise any forward-looking statements contained in this announcement whether as a result of new information, future developments or otherwise.

Goldman Sachs is authorised by the Prudential Regulation Authority (the "PRA") and regulated in the United Kingdom by the PRA and the FCA, and Numis is authorised and regulated by the FCA. Each of the Banks is acting exclusively for the Company and no one else in connection with the Issue. None of the Banks will regard any other person (whether or not a recipient of this document) as a client in relation to the issue and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for the giving of advice in relation to the Issue or any transaction, matter or arrangement referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Brokers under a regulatory regime of any jurisdiction and where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Brokers or any of their respective affiliates accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this announcement or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or any issue of securities mentioned in this announcement, nothing in this announcement will be relied upon as a promise or representation in this respect, whether or not to the past or future. Each of the Brokers and their respective affiliates accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of this announcement or any such statement.