There is only one direct Business Class flight to Funchal (FNC) from London. This is with British Airways and flying out of London Gatwick (LGW). A number of other airlines offer indirect routes. TAP Air Portugal, for example, offer their Business Class flights to Funchal from Gatwick also but via their Lisbon (LIS) hub. SWISS flies out of London Heathrow, transiting through Geneva (GVA), while Lufthansa takes a slightly longer route through both Munich (MUN) and Lisbon (LIS) before arriving in Funchal.
Business Class flights within Europe with EU and UK airlines tend to offer a lighter Business experience than on their long-haul flights. Seating is generally at the front of the plane but with enhanced space with more legroom, a steeper recline, and there is usually an empty middle seat beside every Business Class passenger. You will also receive a larger baggage allowance and charging points on board. British Airways offers its Club Europe class with enhanced dining and snacks on these shorter flights, as well as newspapers and magazines. TAP Air Portugal calls its service Executive Class and also emphasises its dining options, while Lufthansa also puts an emphasis on its personal service on board.
Yes, all Business Class passengers on flights to Funchal from London will be given access to VIP or Business Class lounges in the departure airport and also in the transit airport, time permitting.