- Funding Circle, a leading small business loan platform in the UK, US, Germany, and the Netherlands, announced recently it closed $252 million in securitization
Funding Circle — a leading small business loan platform in the UK, US, Germany, and the Netherlands — announced it closed its second asset-backed securitization (ABS) of US small business loans originated through its platform. The $252 million deal is the seventh securitization of Funding Circle business loans globally and the second in the US after the first securitization in August 2019.
This transaction is rated by two rating agencies with its senior tranche earning an A- rating from Kroll Bond Rating Agency and an A3 rating from Moody’s Investors Service. And the oversubscribed transaction saw diversified demand from 25 institutional investors ranging from asset managers and insurance companies to pension funds and sovereign wealth funds.
A number of the investors are new to the SBIZ securitization program, which signals the market’s continued confidence in small business loans originated through Funding Circle.
“Funding Circle’s second US securitization furthers our commitment to providing institutional investors with access to this investment class,” said Bernardo Martinez, US Managing Director at Funding Circle. “With our global securitization program and sponsorship capability, we can provide diversified funding for small businesses and deliver capital to this critically underserved borrower segment.”
Funding Circle essentially brings together industry-leading risk management policies and cutting-edge technology, enabling investors to earn attractive risk-adjusted returns by supporting established and creditworthy businesses. So far, Funding Circle has originated loans to more than 14,000 US businesses with US borrowers currently averaging 11 years in business and $1.4 million in annual sales.
Within the US, Funding Circle has totaled $2 billion of cumulative loan originations and $1 billion of loans under management. This means that within the US, the company holds more outstanding small business loans than almost 98% of banks (FDIC). And with small businesses employing about half of the American workforce (SBA), this lending helps power the economy by expanding access to financing at competitive and transparent pricing.
Ever since Funding Circle launched in 2010, more than 72,000 small businesses have borrowed $10.2 billion in Funding Circle’s four geographies (UK, US, Germany, and the Netherlands). And investors on the Funding Circle platform include more than 90,000 retail investors, banks, asset management companies, insurance companies, government-backed entities, and funds.
