Funding Circle's chief executive told Investing.com that institutional appetite for small business loans has remained robust despite recent swings in credit markets, underscoring the U.K.-listed fintech's progress in both funding and product development.
Lisa Jacobs said investor demand has held up even as credit spreads and risk sentiment have moved around in recent months. "Whilst the broader market has been volatile, we are seeing strong demand from institutional investors for small business loans, an asset class historically the domain of commercial bank balance sheets," she said.
The firm entered 2026 with more than a32 billion in future funding commitments in place, having completed five institutional transactions during the prior year. That level of forward funding, Jacobs suggested, indicates that some larger allocators are increasingly comfortable taking exposure to SME lending alongside their other fixed-income allocations.
Global credit markets have been wrestling with uncertainty tied to higher interest rates and mounting recession concerns, a backdrop that has led some investors to reconsider positions in higher-risk assets. Funding Circle's ability to continue to attract institutional capital during this period is therefore notable and signals traction for SME credit as an investment category.
Beyond funding, Jacobs highlighted a material change in the company's product mix. In the second half of last year, roughly 50% of credit extended came from business outside Funding Circle's traditional term loan offering. Two newer consumer-facing products - a cashback credit card and a buy-now-pay-later option called FlexiPay - were identified as drivers of that shift.
Those product additions have, according to Jacobs, altered the firm's relationship with its customers. Where Funding Circle once described itself as a "periodic lender," the firm now characterises its role as a more continuous financial partner. The change in customer engagement is visible in transaction frequency metrics: the company reports a customer interaction every 38 seconds today, compared with once every 30 minutes in 2021.
On regulation, Jacobs urged a more deliberate, long-term approach from U.K. policymakers. "The single most important thing the UK can do to support fintech innovation is provide long-term certainty," she said, adding that the primary challenge for many businesses is the need for stable economic and political conditions that enable long-range investment decisions.
Jacobs said there is a genuine desire within the U.K. to craft rules that allow fintechs to scale, but that fintechs often appear to be an afterthought. "Policy and regulation need to be fintech first," she commented. "That does not mean fintechs get an unfair advantage, but that the regulatory environment should also encourage competition, with an active measurable mandate for growth and international competitiveness."
Funding Circle also reported a near 20% improvement in productivity during 2025. Jacobs attributed that gain to the companys push to become more technology-native and to embed modern technological capabilities across the business. Looking forward, she described those capabilities as a "significant lever over the medium term" to enhance customer and employee experience, raise productivity and unlock new opportunities. Jacobs said the breadth of data available to the company positions it well to take advantage of these technological initiatives.
Taken together, the funding successes, evolving product mix and technology-oriented productivity gains paint a picture of a lender repositioning itself in the U.K. market. The combination of renewed institutional backing and more frequent customer engagement suggests Funding Circle is attempting to widen its addressable market - moving beyond a pure term-lending model toward a broader financial services role for small businesses and consumers.
Implications for markets and sectors
- SME lending - Continued institutional demand could support increased capital allocation to small business credit.
- Fintech sector - A regulatory push for long-term certainty would affect scaling prospects across technology-led lenders.
- Credit markets - Shifts in investor risk appetite amid higher rates and recession concerns remain a background influence on funding conditions.