“P2P Business Lending is becoming an increasingly important contributor to overall SME financing in the UK,” a report by the CCAF says.
The total UK online alternative finance market grew to £6.19bn in 2017, up 35% on 2016 (£4.6bn), according to research conducted by the Cambridge Centre for Alternative Finance (CCAF) who recently released “The fifth UK Alternative Finance Industry Report.”
The report confirms that P2P business lending had become an increasingly important part of financing for smaller businesses and was conducted with support from the Peer-to-Peer Finance Association and the UK Crowdfunding Association, which included responses from 75 platforms.
The report found that Peer-to-peer business lending accounts for the largest proportion of the total market, with SMEs borrowing £2bn through these platforms last year, a 65% increase on 2016.
Sector by sector:
Business Lending to SMEs £2bn
Consumer Lending £1.4bn
P2P Property lending £1.2bn
Invoice Discounting £0.79bn
The value of equity-based crowdfunding transactions rose 22 per cent last year to £333m, the Cambridge Centre for Alternative Finance said, with 49% of equity-based crowdfunding coming from venture capital funds and professional investors co-investing with retail investors.
Peer-to-Peer is also proving attractive to large institutions, with 40% of the funding of Peer-to-Peer business lending coming from mutual funds, pension funds, asset managers, banks, family offices and other financial institutions.
Bryan Zhang, executive director at CCAF, said: “This report reflects an industry that is playing an increasingly important role in helping consumers and businesses access finance, while growing to become more diversified, sophisticated and institutionalised.”
The team at Elite Corporate Solutions can help identify the most suitable form of finance. Where Peer-to-Peer is the most suitable option we can work with you and the lender to produce a professional pitch to investors.