Posted on 04.02.2014, by Rob Warlow

New figures released reveal that peer-to-peer lending (P2P) increased by 121 per cent during 2013.

The report published by the Peer-to-Peer Finance Association (P2PFA) shows that cumulative lending at the end of quarter four in 2013 hit £843 million compared to just £381 million at the end of 2012.

The report further reveals that at the end of 2013 there were over 3,700 business borrowers, 70,000 consumer borrowers as well as more than 86,000 active lenders.

The data has been supplied by Zopa and Ratesetter who service the individual/personal market and Funding Circle, Thin Cats and LendInvest. With many other providers in the market the actual figure will be higher, although these are the major players so constitute the majority of deals.

With the P2P platforms set for regulatory oversight by the Financial Conduct Authority from 1st April the alternative lending market is going to be set for further growth this year.

Posted on 12.11.2013, by Rob Warlow

The banks have long countered the claim that they are not lending with the argument that many businesses don’t wish to borrow. Whilst the banks have to accept they can be too risk averse a new survey has back up their assertion that there is a lack of appetite amongst business owners to borrow.

A new YouGov study finds that almost two thirds (64%) of SMEs have not sought any extra finance over the past two years from banks or any other form of lenders.

The SME Banking 2013 report reveals that that amongst those SMEs that had not obtained additional finance in the last three years, the two main deterrents were not wanting to go into debt (34%) and fears about the economic climate (21%).

The YouGov’s research found the next five factors putting SMEs off from borrowing were,

20% didn’t like the interest rates charged
16% didn’t want to face the hassle of setting up a new facility
12% disliked the terms and conditions of the deal
11% thought they would be turned down and
10% were unhappy with the security demanded by the bank

Looking at the wider picture, the YouGov’s study shows that only 36% of SMEs have looked at alternative sources of finance but 21% have secured funding via crowdfunding and 20% took out leasing/HP agreements. Instead of searching out external finance 18% of business owners have used their own money to fund the business.

The findings of this survey confirm what we have been saying for some time in this blog… more needs to be done to highlight to business owners that there are alternative ways to fund growth other than banks. Also the government must take heed of the fact that a large number of businesses just don’t wish to borrow and so they need to be more selective in the schemes they put in place.