Babergh and Mid Suffolk councils back Funding Circle business lending scheme
- Credit: Archant
Two Suffolk councils are investing £1million each in the launch of a partnership with Funding Circle, which helps businesses to access finance independent of their banks.
Babergh and Mid Suffolk will start lending through Funding Circle immediately, in tranches of about £100,000.
The councils join 16 other local authorities which already lend through the platform, including Lancashire, Leicestershire, Lambeth and Camden councils.
The investment through Funding Circle is the largest single amount from any district or borough council in the country and reflects both councils’ determination to protect services and balance the books through new ways of raising money.
To be eligible, businesses must typically have a minimum turnover of £50,000, have been trading for at least two years and pass Funding Circle’s credit assessment process. To date, more than £900m of loans have been lent to more than 11,000 businesses across the UK.
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Babergh council leader Jennie Jenkins said: “This investment highlights our diversified approach to investing and our agreement with Funding Circle, with their proven ability to grade risk, it provides us with more control over the types of return we might expect.
“This allows us to operate in a responsible and prudent manner, while seeking high returns which can be used to protect and improve public services”.
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Derrick Haley, leader of Mid Suffolk council, added: “We really liked the fact that when it came to investing in local businesses, Funding Circle were clear that we were in the driving seat and would decide which companies to back.
“We are both very focused on sustainable economic growth by boosting jobs and businesses and we believe that through investments of this sort we will be able to make a direct contribution to the long-term success of growing local companies.”
Natasha Jones of Funding Circle said: “This partnership is our largest so far with a local authority and shows the increasing appeal amongst councils to have a greater role in stimulating economic growth and employment in their area.
“Babergh and Mid Suffolk’s investments bring the total direct lending from local authorities to just over £8m. This will be a huge boost to businesses both in the local area and across the UK.”