Peer-to-peer lending platform Funding Circle has teamed up with insurance giant Aegon in a small business lending partnership.
The firms announced today that Aegon will lend directly to small businesses through Funding Circle's online lending platform over the next four years.
Aegon will fund £160m of loans in the first 12 months under a framework agreement, with a view to extending that "step-by-step" into a four year funding programme.
Stephen Barclay, economic secretary to the Treasury, said the partnership shows "that there is significant appetite for inward investment into the UK and we hope to see more deals of this scale in the future".
The firms said that for the first year, the tie-up will help around 2,600 UK businesses to access finance.
Mike de Boer, Aegon Bank NV's chief financial officer, said the deal will "further diversify our investment portfolio".
Samir Desai, Funding Circle's chief executive and co-founder, said he hoped the programme will help boost lending to UK small businesses in the coming years.
"This partnership is validation of the attractive risk-adjusted returns that are being generated to investors by lending through Funding Circle," he added. "Now investors of all shapes and sizes can benefit from the stability of the asset class whilst also providing much-needed job creation and economic growth."
Since being established in 2010, Funding Circle has facilitated more than £2.5bn of loans to 26,000 businesses in the UK.
Investors on the platform include financial institutions, the European Investment Bank, local and national government, as well as more than 60,000 individuals. It notched up a fresh funding round in January, announcing $100m (£82.5m) equity capital.
In May, it was fully authorised by the Financial Conduct Authority, meaning it could launch an Innovative Finance Isa (Ifisa), which allows investors to earn tax-free income on peer-to-peer lending activities.