Wednesday, October 23, 2013

Fast rising U.K.-based peer-to-peer lending platform Funding Circle is invading the U.S.

Funding Circle will provide small business borrowers in the U.S. with quick loans.



Funding Circle will provide small business borrowers in the U.S. with quick loans.



A U.K.-based alternative lender that has quickly become a popular destination for British small business borrowers is looking to do the same in the U.S.


Funding Circle, a fast-rising peer-to-peer lending platform is merging with San Francisco-based Endurance Lending Network to create a new place for U.S. small businesses to access loans, the companies will announce today.


The merged peer-to-peer lender, which will go by the name Funding Circle, has also raised $ 37 million in a funding round led by Accel Partners, money it will use to fuel its aggressive growth plans.


Starting on Wednesday, Funding Circle USA will be open for business.


“We looked at the U.S. and saw that small businesses are having a lot of the same problems as small businesses in the U.K.,” the company’s co-founder and CEO Samir Desai, told the Daily News. “It takes a long time to get a business loan.”


Peer-to-peer lending platforms match up borrowers with investors looking for a good return on their capital.


Since it’s inception three years ago, Funding Circle has done more than $ 250 million in loans to British companies and has been tripling each year. Lenders include the British government which committed $ 32 million.


Its appeal: loans are often approved and doled out within a week. It can take banks up to 20 weeks to do the same.


The interest rates on Funding Circle’s loans can sometimes be lower than what banks charge, especially for smaller loans. Rates for a three-year loan will be 11%. A business loan from a bank would cost from 7% to 20%, Desai said.


In addition to banks, Funding Circle will face competition from alternative lenders like New York City-based OnDeck. Lending Club, a peer-to-peer lending giant, is planning to target small business borrowers, as well, noted Peter Renton, founder of LendAcademy.com.


pfurman@nydailynews.com





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http://newyork.greatlocalnews.info/?p=16264

via Great Local News: New York http://newyork.greatlocalnews.info

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