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Covered in this report

Peer-to-peer (P2P) business finance involves providing funds to businesses via individuals, other businesses and institutions through online platforms. They provide an alternative to bank finance and can offer a different funding product with significantly shorter decision times. There are several P2P lending platforms in the UK which all operate in a similar way – businesses complete an online form, answer questions about their respective business and the loan they require, before the platform matches them with suitable lenders. When a business submits a formal application, P2P platforms will conduct credit checks. Every platform runs a different model, so the range of loans can vary. Depending on the platform, investments can range from anything from £10 to over £50,000, while loans can range from £1,000 to the low millions. Returns are typically around 4% to 8% but can be higher.

Company profiles

  • ArchOver
  • Assetz Capital
  • Folk2Folk
  • Funding Circle
  • Lending Crowd
  • RateSetter
  • ThinCats

Market Segmentation

  • Retail
  • Healthcare
  • Property and construction
  • Professional and business support
  • Manufacturing and engineering
  • IT and telecommunications
  • Leisure and hospitality

Expert analysis from a specialist in the field

Written by Lewis Cone, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The ongoing stagnation in bank lending to SMEs is in direct contrast to the continued expansion in SME activity. This lack of financial support from mainstream providers has resulted in more looking towards non-bank options such as P2P when seeking finance Lewis Cone
Senior B2B Analyst

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What's included

What's included

Table of contents

Table of contents

  1. Overview

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

          • The market
            • Market lending reaches record high in 2019 but growth is set to slow
              • Figure 1: P2P business lending, 2015-19, by market value, (£ million)
            • Property and construction receive most P2P funds
              • Figure 2: P2P business lending, 2019, largest six sectors, (£ million)
            • P2P loans most commonly directed towards the South East
              • Figure 3: P2P business lending, 2019, largest six regions, (£ million)
            • P2P business lending to rise by 98% to 2024
              • Figure 4: P2P business lending forecast, 2020-24, by market value, (£ million)
            • Companies and brands
              • What we think
              • Issues and Insights

                • New FCA rules come into effect from December but not all platforms are ready
                  • The facts
                    • The implications
                      • SME funding gap continues to provide opportunities
                        • The facts
                          • The implications
                          • The Market – What You Need to Know

                            • Market lending reaches record high in 2019 but growth set to slow
                              • Lending by sector
                                • P2P business lending to rise by 98% to 2024
                                • Market Size

                                  • Market lending reaches record high in 2019
                                      • Figure 5: P2P business lending, 2015-19, by market value, (£ million)
                                  • Market Segmentation

                                    • Lending by sector
                                        • Figure 6: P2P business lending, 2019, by sector, (% of total lending)
                                      • Lending by region
                                        • Figure 7: P2P business lending, 2019, by region, (£ million)
                                    • Market Forecast

                                      • Business lending to rise by 98% to 2024
                                          • Figure 8: P2P business lending forecast, 2020-24, by market value, (£ million)
                                        • Lower availability of business funding could see P2P account for over a third of all lending by 2030
                                        • The Impact of the Economy

                                          • Annual GDP growth falls to six-year low in 2018 and continues to fall in 2019
                                            • Figure 9: Annual GDP growth rate, 2015-19*, (% change)
                                          • Bank rate remains at 0.75%
                                            • Figure 10: Bank rate, 2008-18, by date of adjustment, (%)
                                        • Market Trends

                                          • Business confidence at an eight-year low as many continue to adopt a ‘wait and see’ approach
                                            • Figure 11: Business confidence index, per half-year, Q4 2008-Q2 2019, (index figure)
                                          • Credit demand and availability remains in negative territory for small businesses
                                            • Figure 12: Availability of corporate credit provided to small businesses in the past three months, Q4 2013-Q3 2019, (net percentage balance)
                                            • Figure 13: Demand for corporate lending by small businesses in the past three months, Q4 2013-Q3 2019, (net percentage balance)
                                          • Average loan amounts rising whilst borrowing rates decline
                                            • Younger and services-based businesses most likely to use alternative finance
                                            • Market Drivers

                                              • Brexit impasse and the remaining prospect of a ‘no-deal’ outcome continues to affect lending plans
                                                • Industry-led push to promote awareness and simplicity of taking out P2P finance aims to boost market development
                                                • 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
                                                          • FCA changes
                                                          • Companies and Brands – What You Need to Know

                                                            • P2P loans now available within a SIPP
                                                              • Institutional funding becoming a key financing source for several lenders
                                                              • Industry Structure

                                                                • Industry development
                                                                  • P2P loans now available within a SIPP
                                                                    • ThinCats creates data models to help locate most viable business opportunities
                                                                      • Lenders working on ways to protect investors against losses
                                                                        • Market share
                                                                            • Figure 14: P2P business lenders, cumulative lending and market share, at 30 September 2019, (in £ million and %)
                                                                        • Competitive Strategies

                                                                          • ArchOver accelerates UK expansion
                                                                            • Institutional funding becoming a key financing source for several lenders
                                                                              • MoneyThing lowers its investor rates as it shifts its focus onto less risky loans
                                                                              • Company Profiles

                                                                                • ArchOver
                                                                                    • Figure 15: Financial analysis of ArchOver, 2014-18, (£ 000)
                                                                                  • Assetz Capital
                                                                                    • Folk2Folk
                                                                                      • Funding Circle
                                                                                          • Figure 16: Financial analysis of Funding Circle, 2014-18, (£ million)
                                                                                        • LendingCrowd
                                                                                          • RateSetter
                                                                                              • Figure 17: Financial analysis of RateSetter*, 2015-18, (£ 000)
                                                                                            • ThinCats
                                                                                                • Figure 18: Financial analysis of Business Loan Network Limited (under the trading name of ‘ThinCats’), 2016-18, (£ 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 2020
                                                                                                                              • Financial Services Expo London 2020
                                                                                                                                • NACFB Commercial Finance Expo 2020
                                                                                                                                  • The Finance Professional Show

                                                                                                                                  About the report

                                                                                                                                  This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                                                  • The Consumer

                                                                                                                                    What They Want. Why They Want It.

                                                                                                                                  • The Competitors

                                                                                                                                    Who’s Winning. How To Stay Ahead.

                                                                                                                                  • The Market

                                                                                                                                    Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                                                  • The Innovations

                                                                                                                                    New Ideas. New Products. New Potential.

                                                                                                                                  • The Opportunities

                                                                                                                                    Where The White Space Is. How To Make It Yours.

                                                                                                                                  • The Trends

                                                                                                                                    What’s Shaping Demand – Today And Tomorrow.

                                                                                                                                  Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

                                                                                                                                  Description