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Peer-to-peer Business Finance - UK - September 2018

“P2P lending platforms must continue to attract new funding sources and new borrowers. However, achieving both at the same time is not a formality – platforms may have a strong supply of funding available but lack ‘high-quality’ or suitable borrowers, or vice-versa. A slowdown in either of these will affect the industry’s growth potential.”
– Lewis Cone, B2B Analyst

This Report looks at the following areas:

  • FCA review calls for greater transparency
  • The rising number of SME funding aggregators has been criticised

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Market lending reaches all-time high in 2018
              • Figure 1: P2P business lending, 2014-18, by market value, (£ million)
            • Property and construction obtain highest amount of lending
              • Figure 2: P2P business lending, 2018, by sector, (% of total lending)
            • South East most common destination for P2P business lending
              • Figure 3: P2P business lending, 2018, by region, (% of total lending)
            • P2P business lending to rise by 75% to 2023
              • Figure 4: P2P business lending forecast, 2019-23, by market value, (£ million)
            • Companies and brands
              • What we think
              • Issues and Insights

                • FCA review calls for greater transparency
                  • The facts
                    • The implications
                      • The rising number of SME funding aggregators has been criticised
                        • The facts
                          • The implications
                          • The Market – What You Need to Know

                            • Market lending reaches all-time high in 2018
                              • Lending by sector
                                • P2P business lending to rise by 75% to 2023
                                • Market Size

                                  • Market lending reaches all-time high in 2018
                                      • Figure 5: P2P business lending, 2014-18, by market value, (£ million)
                                  • Market Segmentation

                                    • Lending by sector
                                      • Figure 6: P2P business lending, 2018, by sector, (% of total lending and £ million)
                                    • Lending by region
                                      • Figure 7: P2P business lending, 2018, by region, (% of total lending and £ million)
                                  • Market Forecast

                                    • Business lending to rise by 75% to 2023
                                        • Figure 8: P2P business lending forecast, 2019-23, by market value, (£ million)
                                      • Platforms must attract ‘high quality’ borrowers and diversify to continue growth
                                        • Mainstream lenders react to emerging alternative finance threat but collaboration could still occur
                                        • The Impact of the Economy

                                          • GDP growth rebounds in Q2 but challenges remain
                                            • Figure 9: GDP growth rate, Q2 2014-Q2 2018, (% change on previous quarter)
                                        • Market Trends

                                          • Business confidence turns positive in Q2 2018 which will influence demand for finance, but uncertainty remains
                                            • Figure 10: Business confidence index, per half-year, Q4 2007-Q2 2018, (index figure)
                                          • Credit demand and availability rises for small businesses
                                            • Figure 11: Availability of corporate credit provided to small businesses in the past three months, Q3 2012-Q2 2018, (net percentage balance)
                                            • Figure 12: Demand for corporate lending by small businesses in the past three months, Q3 2012-Q2 2018, (net percentage balance)
                                          • Nearly half of SMEs have never checked their credit score
                                            • Lenders shift focus to recurring revenue
                                            • Market Drivers

                                              • Brexit uncertainty still affecting lending environment
                                                • Accountants could help drive further growth in P2P lending
                                                  • Open Banking initiative should drive product and service innovation
                                                    • Lack of suitable SME finance offers significant opportunities
                                                    • Regulation and Industry Standards

                                                        • The Small Business, Enterprise and Employment Act
                                                          • The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001
                                                            • P2PFA Industry Standards
                                                            • Companies and Brands – What You Need to Know

                                                              • Institutional funding on the rise in the sector
                                                                • Some lenders have scrapped manual lending in favour of automated lending
                                                                • Industry Structure

                                                                  • Industry development
                                                                    • Institutional funding on the rise in the sector…
                                                                      • …with IFISAs also providing a funding boost
                                                                        • Market share
                                                                            • Figure 13: P2P business lenders, cumulative lending and market share, (in £ million and %)
                                                                        • Competitive Strategies

                                                                          • Some lenders have scrapped manual lending in favour of automated lending
                                                                            • Lenders seek to specialise in certain product areas
                                                                            • Company Profiles

                                                                              • ArchOver
                                                                                • Recent company activity
                                                                                  • Financial information
                                                                                    • Figure 14: Financial analysis of ArchOver, 2014-17, (£ 000)
                                                                                  • Assetz Capital
                                                                                    • Recent company activity
                                                                                      • Folk2Folk
                                                                                        • Recent company activity
                                                                                          • Funding Circle
                                                                                            • Recent company activity
                                                                                              • Financial information
                                                                                                • Figure 15: Financial analysis of Funding Circle, 2012-16, (£ 000)
                                                                                              • LendingCrowd
                                                                                                • Recent company activity
                                                                                                  • ThinCats
                                                                                                    • Recent company activity
                                                                                                      • Financial information
                                                                                                        • Figure 16: Financial analysis of Business Loan Network Limited (under the trading name of ‘ThinCats’), 2015-16, (£ 000)
                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                        • Abbreviations
                                                                                                          • Methodology
                                                                                                          • Further Sources and Contacts

                                                                                                            • Trade associations
                                                                                                              • Association of Short Term Lenders
                                                                                                                • Financial Intermediary & Broker Association (FIBA)
                                                                                                                  • National Association of Commercial Finance Brokers
                                                                                                                    • Peer-2-Peer Finance Association (P2PFA)
                                                                                                                      • Trade magazines
                                                                                                                        • Bridging & Commercial
                                                                                                                          • Business Matters
                                                                                                                            • Commercial Reporter
                                                                                                                              • Loans Insider
                                                                                                                                • Peer2Peer Finance News
                                                                                                                                  • Trade events
                                                                                                                                    • AltFi London Summit 2019
                                                                                                                                      • Financial Services Expo London 2018
                                                                                                                                        • NACFB Commercial Finance Expo 2019
                                                                                                                                          • The Finance Professional Show

                                                                                                                                          Peer-to-peer Business Finance - UK - September 2018

                                                                                                                                          US $1,343.55 (Excl.Tax)