Join top executives in San Francisco on July 11-12, to hear how leaders are integrating and optimizing AI investments for success. Learn More

Small business lending site Funding Circle just landed a major funding round of its own.

The U.K.-based company has raised $65 million in new venture financing, all from existing investors, Funding Circle announced Wednesday. It plans to use the money to expand its U.S. business, which launched last year after a merger with San Francisco-based Endurance Lending Network. The company will invest the capital in both product development and marketing, Funding Circle U.S. managing director Sam Hodges told VentureBeat.

Funding Circle operates a lending platform that enables individual investors and institutions to loan money to small businesses, from franchises to boutiques to manufacturers, looking to enhance or expand their operations. Its loans span from $25,000 to $500,000, with the average loan coming in at around $150,000, said Hodges. Interest rates range from the “high single digits” up to roughly 21 percent, based on credit risk and term (3 to 5 years).

Funding Circle expects its American arm to lend out $100 million by the end of 2014, which will help it reach its $550 million global target. Hodges said Funding Circle U.S. facilitated around $6.6 million in lending across 56 loans last month.

The company differs from peer-to-peer lending sites like Prosper and Lending Club, which primarily fund individuals, not businesses. Its more direct competitive set includes Dealstruck, Fundation, and Raiseworks, but Hodges characterizes Funding Circle as bigger and more mature.

Hodges doesn’t view banks as the competition, he said, but as potential partners — a prescient point several weeks after Funding Circle announced its partnership with Spanish bank Santander, which has begun to refer its customers to the online marketplace.

“There remains a very high percentage of small business owners that remain very poorly served by banks,” Hodges told VentureBeat. “Banks don’t view a $25,000 to $500,000 loan as being their sweet spot any more.

“Our loans are being used to generate real economic value within these businesses, which goes to show the type of borrower we’re serving and the closeness of the match to their financing needs.”

Funding Circle investor Index Ventures led Funding Circle’s $65 million round, joined by existing investors Accel Partners, Union Square Ventures, and Ribbit Capital.

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.