A new UK business has been launched to fill the funding gap for small businesses seeking funding from private investors.
With the government continuing to dither over how to help small businesses obtain funding and angel investors becoming more choosy, a new business called Funding Circle, an online marketplace has been set up to fill the funding gap. Businesses can now obtain funding from private investors direct, though it will involve a number of charges.
The business was launched on Friday and allows small businesses to apply for loans of between £5,000 and £50,000, to be paid back over a one or three-year period. Typical interest rates charged to borrowers on the loans will be between 6% and 9%, with borrowers also paying the website a £50 application fee. Those small businesses will also have to pay the company 2% of the amount borrowed, so it could prove costly.