Funding Circle has launched the first Local Business Lending Partnership with Lancashire County Council, a scheme to stimulate local economic growth and employment through improved access to business finance.

The council will lend an initial £100,000 to Lancashire-based businesses using Funding Circle, the online marketplace where people directly lend to small businesses.

Funding Circle believes the pilot scheme will help realise the growth potential of local businesses that are currently being stifled by poor access to finance. It anticipates that the partnership could grow to a multi-million pound commitment over the next five years.

“This revolutionary partnership will deliver much needed finance to growing businesses in Lancashire, in turn creating jobs and boosting the local economy,” said James Meekings (pictured), co-founder of Funding Circle.

“Lancashire County Council is leading the way for other local authorities to follow, injecting finance right into the heart of the local business community.”

The partnership with Funding Circle has been arranged by the county council through its economic development department – Lancashire County Developments Limited (LCDL).

County Councillor Michael Green, Cabinet member with responsibility for economic development, said: “This is a ground-breaking new way to fund business growth and a first for any council in the UK. This approach to business funding has proved popular in other parts of the country and across the globe. It’s directly supported growing businesses and created new jobs.

“The partnership with Funding Circle is just one of the ways in which we’re supporting economic development in the county, alongside established programmes such as Rosebud. There is great potential to grow the Lancashire economy in the future. Working with Funding Circle, our aim is to unlock more of this potential. Lancashire County Council is determined to show that the county is open for business.”

The partnership will provide support for businesses in the local region to expand and employ additional members of staff. As part of the partnership, Lancashire Council will fund approximately 20% of a loan to a local business.