|« Collaborative consumption and P2P finance||Earn cashback with ReBuildingSociety »|
Funding Circle teams up with Lancashire County Council
Funding Circle announced today that they have formed a partnership with Lancashire County Council so that the council can lend to local businesses within the Lancashire area. This is the first partnership we are aware of within the peer-to-buisness arena from a public body.
Lancashire County Council will become a lender just as you or I, so they won't have any unfair advantage, but they do have the further restriction that they won't be able to lend any more than 20% of the loan amount, or use AutoBid.
This partnership will have a positive impact on borrowing rates to businesses in the Lancashire area, and it may be the start of many partnerships between public bodies and peer-to-business lenders like Funding Circle.
Here is the full text from the Funding Circle blog:
Today, we’re excited to announce a new partnership with Lancashire County Council which will see the council lend to local Lancashire businesses through our platform to stimulate local growth and employment. The announcement was featured on BBC breakfast this morning with co-founder James Meekings explaining how it will work.
This launch sees the first example of a council coming on board with our Local Business Lending Partnership and we are hoping to build similar relationships with other councils in the future. It is great to see a council taking such an innovative step towards supporting the growth of local businesses.
As part of the partnership, the council will lend an initial £100,000 to Lancashire-based businesses and it’s anticipated that our pilot scheme could grow to a multi-million pound commitment over the next five years.
The council will participate in loan auctions in nearly the exact same way as other investors do on the site. The only difference is that we will notify the council when a business listed is in their catchment area, and they won’t have the option to use our Autobid tool. They can login to their account and place bids on loans for businesses that meet their own criteria; up to a maximum of 20% of the loan value.
Lancashire’s small businesses are responsible for more than 50% of local private sector employment. Michael Green, the county councillor, is anticipating this will prove popular within his constituency and is excited by the prospect.
We at Funding Circle think this will be a blueprint for the future of small business lending across the UK, and the involvement of councils will help realise the growth potential of local businesses that are currently being stifled by poor access to finance.