Funding Circle secures £500M lending commitment from Castlelake

What's the deal? Funding Circle has secured a new funding agreement worth up to £500 million from CastlelakeDealroom has a profile for this one. Try Dealroom →, a global alternative investment manager. The commitment, announced August 11, 2026, will fund UK small businesses over a two-year period and brings Castlelake onto the platform as a new investor.

What's the endgame? Funding Circle is the UK's leading SME finance platform, connecting institutional investors with small businesses seeking credit. Since 2010, it has extended more than £18 billion in credit to over 135,000 UK businesses.

Why now? The deal further diversifies Funding Circle's pool of institutional funders, which spans banks, asset managers, pension funds, insurance companies, and government-backed entities. That base supports what the company calls a "capital-light business model," letting it scale without holding loans on its own balance sheet.

What they're saying: "This agreement further expands our deep and diverse funding base and means we can say yes to even more small businesses," said Dipesh Mehta, chief capital officer at Funding Circle. Castlelake's Aadit Prasad, European head of SME and leasing, said the platform provides "an efficient means of deploying capital into the UK SME sector."

The signal: At £500 million, the commitment ranks among the largest UK fintech lending capital deals on record, above the 94th percentile of comparable rounds. It underscores continued institutional appetite for UK SME lending as an asset class, even as that segment remains hard for investors to reach directly.

Read more: Investegate

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