Funding Circle, a peer-to-peer lending platform which allows people and organisations to lend to small businesses, received full authorisation today from the Financial Conduct Authority (FCA).
This means that Funding Circle may now launch an Innovative Finance Isa (Ifisa), which allows investors to earn tax-free income on peer-to-peer lending activities.
Launched by the government last year, the Ifisa is currently offered by six providers. Funding Circle will be the seventh if approved by HMRC, although 85 applications by other potential offerers were still being processed as of February.
“Our vision is to support thousands of people across the UK to earn stable, industry leading returns by lending directly to small businesses,” said Funding Circle's UK managing director and co-founder James Meekings.
Read more: Zopa just got full approval as a P2P lender
Funding Circle's direct lending platform, which was established in 2010, has currently facilitated the investment of more than £2.3bn into 24,000 businesses.
Investors on the platform, which include financial institutions, the European Investment Bank, local and national government and more than 60,000 individuals, have seen annual returns of 6.5 per cent and have accrued an aggregate £116m of net interest.