A great Budget for peer-to-peer lending
Included in the small print of today’s Budget were two big announcements for the peer-to-peer lending industry; ISA inclusion and a consultation into the referral of small business leads from banks to alternative funders.
Peer-to-peer loans allowed into ISAs
In section 1.169 of the full document, the Chancellor confirmed that peer-to-peer lending will be allowed within tax-free individual savings accounts (ISAs) for the first time. The move follows a consultation over the last few months and will further increase the choice that ISA savers have in terms of how they invest.
Our data shows 41% of investors will invest more in peer-to-peer lending now that it has been included within ISAs. This is a huge win for British investors up and down the country, and represents a seminal moment for the industry. The news comes ahead of formal regulation of the peer-to-peer lending industry from 1 April, and you can read more about it in the Financial Times.
We’re in discussions at the moment with the Government about how this will work and a formal timetable for when it will be introduced. We’ll update you with more information when we have it.
New consultation into the referral of small business leads
Also included in today’s Budget (section 2.234) was confirmation that the Treasury will launch a new consultation into the mandatory referral of small business leads from banks to alternative funders, where the former are not able to lend.
We want to help thousands of British businesses access the finance they need to grow, and we have already been talking to a number of banks about the possibility of referring small businesses to Funding Circle.
Today’s news is a welcomed step and another example that peer-to-peer lending and banks can be complementary sources. A core part of a bank’s business is having a positive banking relationship with their customer; partnering with a non-bank provider, like Funding Circle that does not offer the range of products, (business current accounts etc.), that a bank does, makes a lot of sense to us.