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How will the lending work?

£80 million will be lent directly through our marketplace to UK businesses that request loans which meet the British Business Bank’s criteria.

The investment through the Funding Circle platform is made alongside investors from the private sector on equivalent terms and represents up to the final 20% of funding requested by a borrower, once private sector lending has reached 80% of the requested amount. Once a loan closes the BBB will fund the remaining 20%.

Example case

  • An A+ manufacturing business in the North West is looking for £250,000.
  • 80% (£200,000) is available for investors to bid on
  • If 80% is been funded by investors, the final 20% (£50,000) is funded by the British Business Bank programme.
  • As with any Funding Circle loan request, if the loan is not fully funded (in this instance, that is to say if the 80% has not been funded by investors), the loan will not be funded and monies will be returned to investors.
  • The British Business Bank programme funding will lend at the fixed interest rate set by Funding Circle, similar to all other loans.

The British Business Bank programme’s funding does not provide an endorsement, recommendation or any warranty, either expressed or implied, about the creditworthiness of a borrower or the activities and procedures of Funding Circle, and its funding has the same risk of loss as for any private sector investor.

The British Business Bank Investments Ltd is the commercial arm of the British Business Bank, a development bank wholly owned by the UK Government. In 2017, British Business Bank Investments Ltd committed £40 million, in addition to its £40 million commitment in 2014, alongside other investors, to support economic growth by providing more efficient finance to smaller businesses.

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