Peer-to-peer lending to businesses filling the void in small business finance
Responding to today’s news that lending to small businesses fell by £900 million in July as part of the Government’s Funding for Lending scheme, Samir Desai, CEO and co-founder of Funding Circle said:
“The peer-to-peer lending industry is stepping in where the banks are failing and filling the void by providing quick and accessible finance to small businesses. Thousands of people are choosing to cut out the middleman and lend directly to small businesses. Between June and July, hundreds of British businesses borrowed £14 million – up more than 20% on the previous month and 250% compared to the same period last year.”
“The Funding for Lending scheme may be failing businesses, but other Government-supported schemes, such as the Business Finance Partnership are proving to be very successful. Since April the Government has lent £10 million directly to more than 800 businesses through Funding Circle with owners obtaining their funds in a matter of days. This is yet another example that non-bank sources are better at ensuring finance flows to those that need it most.”
Since its launch in 2010, Funding Circle has helped more than 2,500 businesses to borrow in excess of £145 million. Almost 52,000 people have joined Funding Circle lending alongside the British Government, businesses, universities and a number of local councils.
Peer-to-peer lending continues to grow at an exceptional rate. More than £500 million has been lent through the three biggest peer-to-peer lenders, with recent predictions by Ernst & Young that the industry will grow to five times its size in the next three years.