Funding Circle Lands New £500m Funding Commitment From Castlelake | LeapRate

Funding Circle, a leading platform for UK small business finance, has signed a new deal with Castlelake, a global investment firm. Under the agreement, Castlelake will commit up to £500 million to fund UK small businesses over the next two years.

The deal marks Castlelake’s first time investing through the Funding Circle platform. It adds to a growing list of institutional backers that already includes banks, asset managers, pension funds, insurers and government-linked bodies.

Funding Circle says its success comes down to more than 15 years of work building its technology and data systems. The company claims its credit models can spot risk three times better than standard credit bureau scores. This has helped attract big investors looking for a way into the small business lending market, which can be hard to access directly.

By bringing in more funding partners, Funding Circle aims to keep growing without adding too much financial risk. This approach, often called capital-light, lets the company expand quickly and pass on more loans to firms across the UK.

Dipesh Mehta, Chief Capital Officer at Funding Circle, said the new deal shows confidence in the firm’s technology and past results. He added that it means the company can support more small businesses and help drive UK economic growth.

Aadit Prasad of Castlelake said his firm sees real value in the way Funding Circle uses data and technology to reach small businesses efficiently, while also giving investors solid, risk-adjusted returns.

The deal adds fresh momentum to a lending platform that has become a key funding source for smaller UK companies.