New figures have shown that peer-to-peer (P2P) lending in the UK is growing at its fastest rate to date.
The Peer-to-Peer Finance Association published data on 17 July showing that in the second quarter of 2015, new lending to businesses and consumers totalled £507 million, significantly higher than the £459 million figure in the first quarter. The figure included £67.3 million in lending to small and medium-sized enterprises.
The second quarter loans bring cumulative lending by association members to more than £3.15 billion.
Christine Farnish, chair of the association – which represents nine of the largest P2P lenders – said: “We have passed yet another milestone. At this rate we may hit £4 billion by the New Year.
“Strong growth continues across all parts of the market, reflecting the increasing trust that both lending consumers and borrowers have in P2P platforms.”
P2P brings together businesses and other borrowers who have been turned down for finance – or do not wish to use – banks and other traditional sources of funding and lenders looking for a more attractive rate of return on their investments. Members of the association are currently working with almost 189,000 borrowers and just over 116,000 lenders.
BJ Chong, a partner at Palmers, said: “Peer-to-peer lending has become an established part of the funding marketplace, confirmed by the fact that it is now regulated by the Financial Conduct Authority.
“However, while the P2P model may look attractive and easy to use, it’s crucial for businesses get the right funding package in place and peer-to-peer lending may not be right for everyone.
“At Palmers, we are experienced in advising business owners on corporate finance issues, including asset finance, debt finance, equity finance and venture capital.
“Our broader Corporate Finance services include advising on refinancing deals, company and business sales and purchases, management buyouts, business restructuring and share buy-backs. For more information, please contact our Corporate Finance team.”
In aid of Dementia Awareness Week (13 - 17 May 2024) Palmers Solicitors are proud to support Alzheimer’s Society (RCN 296645) to help end the devastation caused by dementia.