Global alternative investment manager Castlelake has backed UK small and medium-sized enterprise (SME) lender Funding Circle with £500m of capital.

The funding agreement will support UK small businesses over a two-year period, according to both firms. It will also expand Funding Circle’s existing pool of institutional investors.

Since 2010, Funding Circle has extended more than £18bn in credit to more than 135,000 UK businesses.

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“We’re delighted to welcome Castlelake as a new investor to the platform,” said Dipesh Mehta, chief capital officer at Funding Circle. “This agreement further expands our deep and diverse funding base and means we can say yes to even more small businesses, putting vital funding to work to support the real economy and drive economic growth across the UK.”

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On the its recent investment, US-headquartered Castlelake, which has $38bn (£28.1bn) in assets under management, said it sees the UK SME sector as an opportunity to both support small businesses across the country and provide its investors with attractive risk-adjusted exposure.

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