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The Rise of Peer-to-Peer Business Fundraising

THE RISE OF PEER-TO-PEER BUSINESS LENDING World's largest investment bank, Lehman Brothers goes bankrupt. The great financial collapse begins, costing UK taxpayers trillions of pounds to date. 2008 LEHMAN BROTHERS The taxpayer foots the bill for a £45bn bailout of RBS after its ill-judged purchase of ABN-Amro. Banks retrenched and stopped lending, resulting in over £6tn sitting on their balance sheets - more than four times the annual GDP. Despite massive balance sheets, bank lending to small businesses collapses, even though they are critical to financial recovery. 29%. RBS 91% of the SME 20% banking market is Lloyds TSB dominated 17% HSBC by the big five banks. 13% BARCLAYS 12% Santander The effect on small businesses 30% of small businesses lay off staff as a result of a lack of funding and the economic crisis. A potential small business funding gap Small businesses would over the next five years of hire more than between £26bn and £59bn 500,000 is estimated. additional members of staff, if they could access finance. 2010 Rise of Peer-to-Peer Business Lending Businesses continue to struggle to access finance and As businesses are continuing to struggle to get credit from their banks, developing alternative lending channels is essential so firms are less reliant on banks. - Vince Cable individuals become increasingly frustrated with low interest rates on their savings accounts. They start to seek alternatives to traditional banking, resulting in a P2P lending boom in the UK and USA. 3,1,33333 Sound local businesses are unable to find banking support at sensible prices. - Andrew Tyrie, chairman of the Treasury Select Committee Funding Circle Funding Circle launches, connecting people who want to lend with businesses that want to borrow. Funding Circle Small peer-to-peer lenders like Funding Circle could in time replace High Street banks. The banking middlemen may in time become the surplus links in the chain. More than £60million of loans facilitated through Funding Circle in the first - Andy Haldane,Bank of England 30 months. The UK is pronounced the "indisputable world leader" of this alternative financing model by independent think tank, Nesta. 2013 Nesta.. Lending via Funding Circle continues to gather pace with five local councils signing up to lend to small businesses, helping to boost economic growth in the regions. The UK Government invests £100million The University of Huddersfield starts to lend, with all interest earned put towards a student scholarship in non-traditional lending channels, scheme. £20million of which went to Funding Circle and was lent out within 10 months. = 300 People 30,000 people are now lending alongside the government, councils and universities. 2014 Funding Circle reaches the £200 million lending milestone in the first week of the New Year! It's announced in the Budget that ISA eligibility will be extended to peer-to-peer lending, making P2P an attractive option for savvy investors. Independent research by Nesta found that an average business that borrows through Funding Circle increases employment by 27%. Lending via Funding Circle to over 5,500 businesses has now therefore created an estimated 16,500 jobs across the country. Rules governing peer-to-peer lending platforms are established by the Financial Conduct Authority in April, providing additional consumer protection and a sign of the industry's growing maturity. The UK Government reaffirms its commitment to the =200 Jobs peer-to-peer lending industry, lending a further £40 million out of a Funding Circle reaches £300 million £300 million lent in June, facilitating investment through Funding £100 million Circle. of lending in just six months. Independent research by Foundation Capital predicts that the global peer-to-peer lending industry will become worth $1 trillion by 2025. Funding Circle

The Rise of Peer-to-Peer Business Fundraising

shared by fundingcircle on Aug 20
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To celebrate our fourth birthday we’re publishing an infographic which tracks the rise of peer-to-peer business lending . Find out how Funding Circle is allowing small businesses to grow and helping...


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