The European Investment Bank (EIB) has agreed to provide £100m (€130.07m) of funding for UK SMEs originated through Funding Circle’s platform.

The investment, alongside £25m from the Funding Circle SME Income Fund, will enable over £200m of new loans over 7 years, said the bank.

The EIB said that the partnership with Funding Circle was the first deployment of EIB funding through a direct lending marketplace to support small businesses.

Funding Circle said it had facilitated £1.25bn of loans to 16,000 businesses in the UK, part of which consists of national and local UK government backing, and support from international organisations such as the European Investment Bank and European Investment Fund, and KfW, the German development bank.

"Investment by small businesses drives economic growth, and simple, efficient access to finance is essential to help small companies to expand, create jobs and harness new opportunities. This new and exciting partnership with Funding Circle demonstrates the European Investment Bank’s firm commitment to seeking out new ways to stimulate business investment across Europe. The £100 million backing will not only unlock over £200 million of new investment by small businesses across the UK, but also provides an innovative model for supporting SMEs that could be used elsewhere in Europe," said Jonathan Taylor, European Investment Bank vice president.

Samir Desai, chief executive and co-founder of Funding Circle said: "Our partnership with the European Investment Bank is the first of its kind and represents another important step on our journey to creating a global marketplace where creditworthy businesses borrow from a diverse range of investors. This significant investment will ensure more businesses access the finance they need to grow and will help support economic growth and job creation across the UK."