Institutional demand for small business loans has remained resilient despite broader credit market volatility, Funding Circle Chief Executive Lisa Jacobs told Investing.com in an exclusive interview, as the U.K.-listed fintech lender doubles down on its technology platform and push into artificial intelligence.
Jacobs, who leads the London Stock Exchange-listed company, said investor appetite has held up even as credit spreads and risk sentiment have fluctuated 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 company entered 2026 with more than £2 billion in future funding commitments in place, having signed five institutional deals last year.
The comments come as global credit markets have grappled with uncertainty stemming from higher rates and rising recession concerns, prompting some investors to reassess exposure to riskier asset classes.
Funding Circle's ability to attract fresh institutional capital signals that SME lending is gaining traction with larger allocators.
Jacobs said the company has also transformed its product mix, with roughly 50% of credit extended in the second half of last year coming from outside its core term loan business.
A cashback credit card and a buy-now-pay-later product called FlexiPay have helped shift Funding Circle from what Jacobs described as a “periodic lender to a daily financial partner,” with a customer transaction now occurring every 38 seconds compared to once every 30 minutes in 2021.
On the regulatory front, Jacobs called for a more deliberate approach to fintech oversight in the U.K.
“The single most important thing the UK can do to support fintech innovation is provide long-term certainty,” commented Jacobs. “The biggest challenge we face is similar to most businesses - long term stability in economic and political environments to enable long term investment decisions.
“In the UK, there seems a genuine desire to create the right regulatory environment to encourage fintechs to scale but often fintech seems an afterthought. Policy and regulation need to be fintech first,” she added. “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 reported a nearly 20% productivity improvement in 2025, which Jacobs attributed to the company's drive to become, in her words, "AI native."
Looking ahead, the company sees AI as a “significant lever over the medium term” to improve customer and employee experience, “increase productivity and open up new opportunities.”
Funding Circle is said to be “actively embedding AI” across the business, with Jacobs believing the company is well placed given the breadth of data at its disposal.
source https://www.investing.com/news/stock-market-news/funding-circle-ceo-sme-loan-demand-holds-firm-despite-credit-market-volatility-4712865
