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The European Investment Bank has agreed a £100 million investment in loans to small businesses in the UK originated through Funding Circle.

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This investment, alongside £25m from the Funding Circle SME Income Fund, will enable over £200 million of new loans over 7 years, which it says will provides a further injection of much-needed funding into the UK small business sector.

This new partnerships represents the first deployment of EIB funding through a direct lending marketplace to support small businesses. Improving access to finance for small and medium-sized enterprises (SMEs) is a key priority for the European Investment Bank. This new engagement is recognition of the role of marketplace lending as an efficient way for small businesses to access finance, and an important new channel to stimulate the real economy.

To date, Funding Circle has facilitated more than £1.25 billion of loans to 16,000 businesses in the UK.

Jonathan Taylor, vice president of the European Investment Bank, said: "Investment by small businesses drives economic growth, and simple, efficient access to finance is essential to help small companies to expand, create jobs and harness new opportunities. This new and exciting partnership with Funding Circle demonstrates the European Investment Bank's firm commitment to seeking out new way to stimulate business investment across Europe. The £100m backing will not only unlock over £200 million of new investment by small businesses across the UK, but also provides an innovative model for supporting SMEs that could be used elsewhere in Europe."

Samir Desai, CEO and co-founder of Funding Circle, said: "Our partnership with the European Investment Bank is the first of its kind and represents another important step on our journey to creating a global marketplace where creditworthy businesses borrow from a diverse range of investors. This significant investment will ensure more businesses access they need to grow and will help support economic growth and job creation across the UK."

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