SAN FRANCISCO--(BUSINESS WIRE)--Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands, today closed its second asset-backed securitization (ABS) of US small business loans originated through its platform. The $252 million deal is the seventh securitization of Funding Circle business loans globally, and the second in the US after a first securitization in August 2019.
The transaction is rated by two ratings agencies, with its senior tranche earning an A- rating from Kroll Bond Rating Agency and an A3 rating from Moody's Investors Service. The oversubscribed transaction saw diversified demand from 25 institutional investors, ranging from asset managers and insurance companies to pension funds and sovereign wealth funds. Many of the investors are new to the SBIZ securitization program, signaling the market’s continued confidence in small business loans originated through Funding Circle. More information about the transaction, Small Business Lending Trust 2020-A (SBIZ 2020-A), will be available on dv01 and Bloomberg.
“Funding Circle’s second US securitization furthers our commitment to providing institutional investors with access to this investment class,” said Bernardo Martinez, US Managing Director, Funding Circle. “With our global securitization program and sponsorship capability, we can provide diversified funding for small businesses and deliver capital to this critically underserved borrower segment.”
Funding Circle brings together industry-leading risk management policies and cutting-edge technology, enabling investors to earn attractive risk-adjusted returns by supporting established and creditworthy businesses. To date, Funding Circle has originated loans to more than 14,000 US businesses, with US borrowers currently averaging 11 years in business and $1.4 million in annual sales. In the US, Funding Circle has totaled $2 billion of cumulative loan originations and $1 billion of loans under management, meaning that within the United States the company holds more outstanding small business loans than almost 98% of banks.1
With small businesses employing about half of the American workforce2, this lending helps to power the economy by expanding access to financing at competitive and transparent pricing. Oxford Economics found that in 2018 alone, lending through Funding Circle contributed $2.8 billion (measured in “gross value added”) to the US economy, and created and sustained 38,000 US jobs.
About Funding Circle
Funding Circle (corporate.fundingcircle.com) is a global small business loans platform. Since launching in 2010, more than 72,000 small businesses have borrowed $10.2 billion in Funding Circle’s four geographies -- the UK, US, Germany, and the Netherlands. Investors on the Funding Circle platform include more than 90,000 retail investors, banks, asset management companies, insurance companies, government-backed entities, and funds.
1Federal Deposit Insurance Corporation (FDIC) Statistics on Depository Institutions. March 2019. “Amount of currently outstanding commercial and industrial loans less than $1,000,000 held in domestic offices.” https://www5.fdic.gov/sdi/download_large_list_outside.asp.
2 US Small Business Administration Office of Advocacy 2018 United States Small Business Profile. https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf