Peer-to-peer financing has soared over 50 per cent on last year, as alternative finance continues to shake up the lending world to really begin hitting the mainstream.
The UK’s small businesses are growing particularly enamoured with the opportunities P2P lending presents, which makes sense when you consider that four in 10 businesses have their first applications rejected by banks.
P2P financing has rapidly soared up as an alternative. Lending will hit £3bn in total, with £1.5bn lent this year alone, according to new data from lender MarketInvoice.
“UK small businesses have been quick off the mark in embracing alternative finance. Even if banks don’t want to lend to our small businesses, there are lots of people that are happy to step in and fill the funding gap,” said Anil Stocker, chief exec of MarketInvoice.
The lender predicts that P2P financing could total over £6bn next year, if the market continues to grow at current levels.
Credit experts have warned that alternative lending poses a threat to traditional banking, with Jonathan Crook, director of the University of Edinburgh’s Business School’s research centre saying:
Traditional banks need to adapt to keep up with this new, nimble market – and fast.