A new peer-to-peer lender scheme that has been officially backed by Lord Rothschild is due to be unveiled soon as one of the top beneficiaries of the new Government lending scheme designed to help stimulate more lending opportunities for SMEs.
Zopa, a web based lending company, will be given £10m as part of the public funding scheme that makes it easier for small companies to get access to financing. The award is just one that will be given out of the £110m funding package that was announced by Business Secretary Vince Cable as he attempts to help kick start the stalled British economy.
The scheme, known as the BFP or the Business Finance Partnership, is designed to offer SMEs better access to credit at a time when financing is hard to come by. Ministers were hoping that Chancellor George Osborne would announce the details of the BFP when he announced the Autumn statement last week. However, the announcement was delayed after Whitehall officials called for legal due diligence.
On Wednesday the Department of Business, Innovation, and Skills is expected to name three private sector companies outside of Zopa that are going to receive public money to help foster future small business lending. As part of the programme, the Government will fund the scheme with £55m and then the private sector will match the funding so that at least £110m is made available to small businesses in need.
Insiders believe that some of the companies that may be chosen to receive the funds are Funding Circle which is a peer0to-peer lender, Boost, and City of London Group PLC subsidiary Credit Asset Management Limited. The first two are expected to receive about £20m whereas the Credit Asset Management Ltd group is expected to receive £5m.