Funding Circle helped unlock 45,000 UK jobs in 2017
By James Meekings, co-founder and managing director at Funding Circle UK
A new report published by Oxford Economics revealed that lending through Funding Circle, the global small business loans platform, unlocked 45,000 jobs in the UK in 2017.
Launched in 2010, Funding Circle facilitates lending from a wide range of investors to small businesses in the UK, US, Germany and the Netherlands. In 2017, investors lent £1.7bn through the platform to small businesses across all four markets, contributing £4bn to the global economy (measured in gross value added), unlocking 75,000 jobs. For every £1 lent through the platform, an additional £2 was contributed to GDP across these four countries.
A detailed look at Funding Circle’s impact in the UK:
- lending through the platform contributed £2.4bn to the economy and generated £730m in annual tax receipts for the HM Treasury in 2017
- the report also found that these loans had a significant impact on the UK labour market, with almost 45,000 jobs found to be powered by lending through Funding Circle in 2017
- 92% of businesses believed that the Funding Circle application process was faster than through a traditional route.
Small and medium-sized businesses make up approximately half of the UK’s turnover and half of all employment, yet continue to face difficulties accessing finance through traditional channels. In the last quarter of 2017, the combined net lending (total minus repayments) of the major high street banks to SMEs in the UK was negative (-£75m). These difficulties have been compounded with the closure of some 423 bank and building society branches across the UK in 2017.
At the same time, the number of small businesses has grown, and the report suggests an increasing number is turning to Funding Circle’s platform for finance. In the same quarter of 2017 that bank net lending was negative, investors lent £156m through the platform to UK small businesses on a net basis alone. This strong growth means Funding Circle is set to hire 400 people in 2018, 200 of which will be based in the UK and bringing the total number of employees to 1,200 worldwide.
Commenting on the news, John Glen, economic secretary to the Treasury, said: “The way people and businesses access borrowing is evolving, and with this, new players like Funding Circle are making great contributions to our world-class financial services industry. The success of peer-to-peer lending has brought about real benefits, not only for the businesses of Britain, but as this report shows, our economy at large too.”
James Meekings, UK managing director and co-founder at Funding Circle, added: “The measurable effect that lending through Funding Circle is having on the UK economy and employment is particularly gratifying. In the UK alone, the activity stimulated by small businesses generated £730m in annual tax revenues for HM Treasury in 2017. Small business isn’t small – it accounts for around half of the UK’s turnover and half of all employment. That’s why we’ve put their needs at the forefront of our mission, because when they grow, so does our economy.”
Download the full report here.