Written by Kady Potter
Posted on 29/09/2014

P2P lending as a crowdfunding alternative surpasses £2 billion

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The UK peer-to-peer (P2P) lending industry continues to grow as a viable avenue to finance. Greater numbers of businesses have been capitalising on this revolutionary credit advance - rather than more traditional lending routes – and those in the industry expect it to swell even further soon.


A growing trend for peer lending

Figures revealed by AltFi confirm that the P2P year to date lending total has reached £1billion – while the cumulative total stands at £2billion. Meanwhile, analyst Cormac Leech has reportedly predicted that this impressive figure could jump dramatically to £32billion in the near future.

Giles Andrews, CEO and founder of one industry player Zopa, commented on the news:

“To surpass the two billion pound mark is a massive achievement for the UK market. This has been achieved by UK consumers willing to think outside the banks. What started out 10 years ago as an idea in a barn with Zopa is now one of the most innovative and disruptive industries in the world. The UK peer-to-peer lending industry is growing faster than ever and we look forward to continuing to reshape the future of finance in the UK.”

Taking advantage of wider funding access 

P2P lending gained worthy exposure after the recession, when businesses had to look to creative ways of generating capital as the banks raised barriers to cash. The success of the alternative finance industry owes much to peer lending and Crowdfunding, both proven to be a most effective way to raise finances quickly.  

Due diligence important for lenders and borrowers

Although this new approach allows quick access to capital by sidestepping the banks, it’s important that due diligence is performed to appropriately mitigate risk, even for you as the borrower. Do your research before choosing a lending platform to find one with terms that best suit your business. Ideally, the more flexible the better. 

One benefit to choosing traditional lenders for finance is the business guidance and expertise they provide. While this is found with P2P lenders, it’s vital to make sure the individual or group of investors are legitimate and trustworthy, to help you mitigate the risk of fraud. This is where credit scoring may be worthwhile to help you uncover a negative financial history.

P2P platforms have achieved a booming success, which only looks set to continue. It’s a tried and tested route to finance for many firms, and one you should consider when growth is the aim.