2021
9
UK Peer-to-Peer Business Finance Market Report 2021
2021-10-21T04:10:26+01:00
OX1049089
1495
143671
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Report
en_GB
“With simple processes and quick approval times, P2P is likely to remain in high demand and at a time when the UK is facing a looming debt crisis, investors will…

UK Peer-to-Peer Business Finance Market Report 2021

£ 1,495 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK Peer-To-Peer Business Finance market, including the behaviours, preferences and habits of the consumer.

The credit environment that supported the significant growth in the P2P industry since the early 2010s has changed with the current pandemic and end of Brexit transition period, as well as wider global economic uncertainty, presenting a new challenge for lenders.

With the government-backed COVID support schemes having been accredited to several P2P lenders over the last 12 months, MBD expects the value of the P2P business lending market to have continued growing in 2021 and to have risen by a cumulative 127% over the last five years – from £3.42 billion in 2017 to £7.77 billion in 2021.

The sector achieved significant growth over each of the last five years, with estimated annual growth ranging between 10% (in 2021) and 99% (in 2017). Mainstream banks continue to treat SMEs differently from their larger counterparts in the terms and conditions they charge on loans – giving P2P lenders vast business opportunities. Furthermore, P2P lenders can still help fill the funding gap that exists for businesses that require working capital but do not meet the criteria for the government coronavirus support schemes.

P2P lenders continue to seek scale while also returning a profit, with several approaches used to achieve this. These have included diversifying product offerings and target audiences, expanding overseas, partnerships with large banks, partnerships with challenger banks, creating specific funds to encourage institutional investment and seeking banking licences.

Read on to discover more details or take a look at all of our UK Finance market research.

Quickly understand

  • The impact of COVID-19 on P2P business finance and how lenders and borrowers will react to the new market conditions.
  • How the P2P business finance market will adapt to the post-COVID-19 environment.
  • The value of individual segments in the market in 2021.
  • Business finance vs marketing.
  • Business finance accounting marketing.

Covered in this report

Brands: Assetz Capital, Folk2Folk, CrowdProperty, Kuflink, ArchOver, Proplend, Ablrate, Rebuilding Society, Landlordinvest.

Expert analysis from a specialist in the field

This report, written by Lewis Cone, a leading analyst in the B2B sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

With simple processes and quick approval times, P2P is likely to remain in high demand and at a time when the UK is facing a looming debt crisis, investors will seek out more favourable non-bank returns – presenting a major opportunity for P2P lenders. Additionally, P2P business lenders will be poised to fill the funding gap between what mainstream banks are prepared to lend and the demand from small businesses, especially once the coronavirus support schemes come to an end.

Lewis Cone
Senior B2B Analyst

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • COVID-19: market context
          • Economic and other assumptions
            • Products covered in this Report
            • Executive Summary

                • COVID-19 and P2P business finance
                  • Figure 1: Short, medium and long-term impact of COVID-19 on P2P business finance, 2020-25
                • The market
                  • Market lending boosted by government support schemes
                    • Figure 2: P2P business lending, 2017-21, by market value, (£ million)
                  • Property and construction receive greatest level of P2P loans
                    • Figure 3: P2P business lending, 2021, largest six sectors, (£ million)
                  • P2P loans most commonly directed towards the South East
                    • Figure 4: P2P business lending, 2020, largest six regions, (£ million)
                  • P2P business lending to rise by a quarter between 2022 and 2026
                    • Figure 5: P2P business lending forecast, 2022-26, by market value, (£ million)
                • Issues and Insights

                  • First real test of P2P’s operating model in difficult trading times has seen both success and failure
                    • Government COVID-support schemes may permanently change industry dynamics even after they come to an end…
                    • The Market – Key Takeaways

                      • Market lending boosted by government support schemes
                        • Lending by sector
                          • P2P business lending to rise by a quarter between 2022 and 2026
                          • Market Size

                            • Market lending boosted by government support schemes
                                • Figure 6: P2P business lending, 2017-21, by market value, (£ million)
                            • Market Segmentation

                              • Lending by sector
                                  • Figure 7: P2P business lending, 2021, by sector, (% of total lending)
                                • Lending by region
                                    • Figure 8: P2P business lending, 2021, by region, (£ million)
                                • Market Forecast

                                    • Short, medium and long-term impact of COVID-19 on the industry
                                      • Figure 9: Short, medium and long-term impact of COVID-19 on P2P business finance, 2020-25
                                    • Market drivers and assumptions
                                      • Figure 10: Key drivers affecting Mintel’s market forecast, 2016-25, (in % annual change, % rate, and £ million) – (prepared on 10 September 2021)
                                    • Learnings from the last recession
                                        • Figure 11: Industry performance following the last recession, 2010-15, (£ million)
                                      • P2P business lending to rise by a quarter between 2022 and 2026
                                          • Figure 12: P2P business lending forecast, 2022-26, by market value, (£ million)
                                        • Property transactions will remain a key growth area for P2P despite end of stamp duty holiday
                                          • Expanding ESG trend will provide further opportunities
                                          • The Impact of the Economy

                                              • UK economy contracts by record 9.8% in 2020 due to COVID-enforced economic shutdowns
                                                  • Figure 13: Annual GDP growth rate, 2016-21*, (% change)
                                                • Bank rate set at a record low of 0.1%
                                                    • Figure 14: Bank rate, 2008-20, by date of adjustment, (%)
                                                • Market Trends

                                                  • SME confidence rises, but uncertainty remains on investment levels
                                                    • Credit demand and availability turn negative for small businesses as companies contemplate taking on more debt
                                                        • Figure 15: Availability of corporate credit provided to small businesses in the past three months, Q3 2015-Q2 2021, (net percentage balance)
                                                        • Figure 16: Demand for corporate lending by small businesses in the past three months, Q3 2015-Q2 2021, (net percentage balance)
                                                      • New platform approval rating reaches highest level since 2018
                                                        • More P2P platforms are adopting open banking although uptake could still improve
                                                          • P2P platforms start to become profitable
                                                          • Market Drivers

                                                            • Potential flood of insolvencies expected by year-end as government measures end, but lenders still have attractive entry points
                                                                • Figure 17: Company insolvencies in England and Wales, 2016-20, (Number)
                                                              • P2P opportunity as SMEs are still unable to obtain much-needed finance
                                                              • 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
                                                                      • FCA changes
                                                                      • Companies and Brands – Key Takeaways

                                                                        • 36H Group and Innovate Finance seek to aggregate lending data to highlight the role the sector plays
                                                                          • Funding Circle and Atom Bank partner up to provide new funding
                                                                          • Industry Structure

                                                                            • Industry development
                                                                              • Transparency key to gaining trust
                                                                                • 36H Group and Innovate Finance seek to aggregate lending data to highlight the role the sector plays
                                                                                  • Leading industry analytics group to expand scope to Europe
                                                                                    • Industry deals and movements
                                                                                      • New lending market share
                                                                                          • Figure 18: Net new lending, by selected P2P lender, 2021, (£ million)
                                                                                      • Competitive Strategies

                                                                                        • Ablrate launches secondary loan market exchange
                                                                                          • Funding Circle and Atom Bank partner up to provide new funding
                                                                                            • Kuflink launches tax tool, app, and new IFISA wrapper
                                                                                            • Company Profiles

                                                                                              • ArchOver
                                                                                                • Recent company activity
                                                                                                  • Financial information
                                                                                                    • Figure 19: Financial analysis of ArchOver, 2016-20, (£ 000)
                                                                                                  • Assetz Capital
                                                                                                    • Recent company activity
                                                                                                      • Financial information
                                                                                                        • Figure 20: Financial analysis of Assetz SME Capital Limited, 2018-21, (£ million)
                                                                                                      • Folk2Folk
                                                                                                        • Recent company activity
                                                                                                          • Financial information
                                                                                                            • Figure 21: Financial analysis of Folk2Folk Limited, 2019-21, (£ million)
                                                                                                          • Funding Circle
                                                                                                            • Recent company activity
                                                                                                              • Financial information
                                                                                                                • Figure 22: Financial analysis of Funding Circle, 2016-20, (£ million)
                                                                                                              • Kuflink
                                                                                                                • Recent company activity
                                                                                                                  • Financial information
                                                                                                                    • Figure 23: Financial analysis of Kuflink, 2017-19, (£000)
                                                                                                                  • LendingCrowd
                                                                                                                    • Recent company activity
                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                        • Abbreviations
                                                                                                                          • Methodology
                                                                                                                          • Further Sources and Contacts

                                                                                                                            • Trade associations
                                                                                                                              • Trade magazines
                                                                                                                                • Trade events

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