RBS partners with fintech startups Funding Circle and Assetz Capital for peer-to-peer lending
Royal Bank of Scotland has partnered with UK financial technology startups Funding Circle and Assetz Capital to provide alternative sources of finance to small businesses.
Customers of RBS will be referred to the two peer-to-peer lenders if they are turned down for loans by the bank, an indication of growing acceptance of digital crowdfunding within mainstream finance.
“It is great to see companies like Funding Circle forging a new partnership with RBS to ensure that small British companies have the best access to funding,” said Chancellor of the Exchequer, George Osborne.
Both Funding Circle and Assetz Capital enable businesses to lend each other funds via an online portal, potentially bypassing traditional banks. Peer-to-peer lending currently makes up approximately one percent of new SME lending, according to RBS, but is growing at 200 percent a year.
It is not the first time a UK-based bank has struck such a deal, with Santander also passing on customers declined for loans to Funding Circle. The UK startup, which received £40 million funding from the government last year in a bid to boost SME lending, was founded in 2010 and is backed by Index Ventures.
“This partnership recognises our role as the largest marketplace for unsecured and secured small business lending,” said Samir Desai, CEO and co-founder of Funding Circle.
“Partnering with the UK’s biggest small business high street lender is a huge vote of confidence in our model, and we look forward to working together to create thousands more opportunities for small businesses to access finance and grow.”
Assetz Capital was created in 2013, and has since lent more than £55m to UK SMEs and property developers.
“In the past, it would have been unthinkable for an alternative lender, let alone a new peer-to-peer lender, to collaborate with a bank,” said Andrew Holgate, MD of Assetz Capital.
“However, it is clear that there’s a genuine desire emerging for banks to support SMEs more by introducing alternative lending industry options.”