Santander will proactively refer small business customers looking for a loan to Funding Circle, the crowd-funded commercial lender. Referrals will take place on Santander’s website and in letters to customers.
As part of the relationship, Funding Circle will signpost its customers to Santander if they require day-to-day relationship banking support or international services.
To date Funding Circle has lent more than 5,000 businesses £290m.
Ana Botin, CEO of Santander UK, (pictured) said: “SMEs need access to multiple sources of finance, and Santander’s partnership with Funding Circle is a good example of how traditional and alternative finance can work together to help the nation’s SMEs prosper. Peer-to-peer financing is also a useful way to introduce people to the concept of investing in entrepreneurs; an important element in a healthy enterprise economy.”
Industry research estimates that 250,000 businesses a year could benefit from being referred to alternative finance providers, said Funding Circle.
The partnership comes at a time when the Government is consulting on whether it should be mandatory for banks to refer small businesses to other non-bank providers.
Samir Desai, CEO and co-founder of Funding Circle said: “This partnership recognises our role as the only marketplace that caters for, and is dedicated to, small businesses. In Santander we have found a fellow challenger brand that shares our commitment to putting small business customers’ needs first. They have created a blueprint for other banks to follow.”
Since launching in the UK in 2010, Funding Circle said it has helped create an estimated 15,000 new jobs in the UK.