Funding Circle eyes asset management funding amid bank turmoil

Funding Circle plans to seek out more wholesale funding from asset managers over the next 12 months in response to ongoing turmoil in the banking sector.

Speaking to The Times, Funding Circle’s chief executive Lisa Jacobs said that the banking crisis could lead to a shortage of funding opportunities for small- and medium-sized enterprises.

She added that the small business lender and former peer-to-peer lending platform will seek to further diversify its funding sources in the year ahead, with a tilt towards asset managers “versus banks given some of the disruption”.

“I’m not concerned about our position,” she said.

“There probably will be some in a less good situation and we’ve already seen that in the last six to 12 months, we’ve seen players in the US and UK struggle to bring in funding. A lot of that has to do with their scale and delivering returns.”

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Earlier this month, a bank run led to the collapse of US-based Silicon Valley Bank (SVB), which specialised in delivering loans to start-ups and fintechs. HSBC bought the UK arm of the bank for just £1.

And yesterday (19 March), UBS agreed to buy the loss-making Credit Suisse for $3.25bn (£2.66bn) in a deal backed by the Swiss government.

Jacobs pointed to comments by Larry Fink, the chief executive of BlackRock, who warned that banks would potentially become “more constrained in their lending” after the failure of SVB.

“It’s not yet clear if there is broader market sentiment around lending,” Jacobs said. “We are there to step into any void.”

Funding Circle has delivered approximately £15bn in credit to more than 135,000 businesses over the past 13 years.

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