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RBS, the Royal Bank of Scotland, announced yesterday that it’s partnering up with peer-to-peer lenders Funding Circle and Assetz Capital.
Starting next week, the bank — which accounts for 33 percent of the small business lending market in the UK — will steer rejected loan applicants to the two crowdlending platforms, as well as other sources of alternative financing. The deal helps RBS to provide its customers better service if it can’t offer them a loan at the time of application. For the crowdlending platforms, the partnership will mean more dealflow and further legitimacy.
The pilot program begins next week in Scotland and southwest England, and will roll out nationally over the next three months.
“Partnering with the UK’s biggest small business high street lender is a huge vote of confidence in our model, and we look forward to working together to create thousands more opportunities for small businesses to access finance and grow,” said Funding Circle CEO and cofounder Samir Desai.
To date, over 7000 businesses have borrowed £490 million ($734 million) via Funding Circle, making it one of the leading players in the peer-to-peer lending industry in the world. Previously, Funding Circle had hooked up with Santander to offer a similar arrangement.
Assetz Capital, for its part, has facilitated over £55 million ($82 million) in loans since launching in early 2013.
“In the not very distant past, it would have been unthinkable for even a leading peer to peer lender to collaborate with a bank,” said the platform’s managing director Andrew Holgate. “However, it is clear that there’s a genuine desire emerging for banks to support SMEs more by introducing alternative lending industry options.”