26% of people in the UK would loan money by joining a P2P scheme
According to a new report from rebuildingsociety.com, a peer-to-business lending website that connects SME borrowers with lenders, 26% of people in the UK (up to 12m) would consider loaning money to SMEs by joining a P2P scheme in 2014 when the sector will be fully regulated by the Financial Conduct Authority (“FCA”).
Peer-to-peer lending – also known as person-to-person lending, peer-to-peer investing and social lending – involves lending money to businesses or individuals online. The sector is set to boom with as much as £12bn to be lent through SME P2P schemes annually, roughly 10% of total mainstream SME bank lending in 2012.
Individual lenders can typically earn between 8% and 15% interest through P2P platforms, which is significantly higher than the returns offered by many bank and building society accounts.
Daniel Rajkumar, rebuildingsociety. com managing director, said: “This research shows P2P lending is well on its way to entering the financial mainstream with strong levels of interest from consumers and SMEs alike.”
“The FCA’s regulatory oversight from next year will provide consumers with an additional layer of protection and our study shows this is very likely to boost take-up.”
Rebuildingsociety.com post a list of success stories on their website. One of which, Exquisite Handmade Cakes, in Leeds, received more than 60 bids. The company were refused a bank loan of £50,000, to buy new cake slicing machinery, despite a £1.6m turnover and proof of future contracts. They were listed as a lending opportunity for three weeks, but had their £50,000 investment within one week.
For more information please visit the rebuildingsociety.com website.
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