Table of Contents
Overview
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- What you need to know
- Covered in this Report
Executive Summary
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- The market
- Market lending reaches record high in 2019 but growth is set to slow
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- Figure 1: P2P business lending, 2015-19, by market value, (£ million)
- Property and construction receive most P2P funds
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- Figure 2: P2P business lending, 2019, largest six sectors, (£ million)
- P2P loans most commonly directed towards the South East
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- Figure 3: P2P business lending, 2019, largest six regions, (£ million)
- P2P business lending to rise by 98% to 2024
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- Figure 4: P2P business lending forecast, 2020-24, by market value, (£ million)
- Companies and brands
- What we think
Issues and Insights
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- New FCA rules come into effect from December but not all platforms are ready
- The facts
- The implications
- SME funding gap continues to provide opportunities
- The facts
- The implications
The Market – What You Need to Know
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- Market lending reaches record high in 2019 but growth set to slow
- Lending by sector
- P2P business lending to rise by 98% to 2024
Market Size
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- Market lending reaches record high in 2019
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- Figure 5: P2P business lending, 2015-19, by market value, (£ million)
Market Segmentation
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- Lending by sector
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- Figure 6: P2P business lending, 2019, by sector, (% of total lending)
- Lending by region
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- Figure 7: P2P business lending, 2019, by region, (£ million)
Market Forecast
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- Business lending to rise by 98% to 2024
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- Figure 8: P2P business lending forecast, 2020-24, by market value, (£ million)
- Lower availability of business funding could see P2P account for over a third of all lending by 2030
The Impact of the Economy
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- Annual GDP growth falls to six-year low in 2018 and continues to fall in 2019
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- Figure 9: Annual GDP growth rate, 2015-19*, (% change)
- Bank rate remains at 0.75%
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- Figure 10: Bank rate, 2008-18, by date of adjustment, (%)
Market Trends
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- Business confidence at an eight-year low as many continue to adopt a ‘wait and see’ approach
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- Figure 11: Business confidence index, per half-year, Q4 2008-Q2 2019, (index figure)
- Credit demand and availability remains in negative territory for small businesses
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- Figure 12: Availability of corporate credit provided to small businesses in the past three months, Q4 2013-Q3 2019, (net percentage balance)
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- Figure 13: Demand for corporate lending by small businesses in the past three months, Q4 2013-Q3 2019, (net percentage balance)
- Average loan amounts rising whilst borrowing rates decline
- Younger and services-based businesses most likely to use alternative finance
Market Drivers
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- Brexit impasse and the remaining prospect of a ‘no-deal’ outcome continues to affect lending plans
- Industry-led push to promote awareness and simplicity of taking out P2P finance aims to boost market development
Regulation and industry standards
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- The Small Business, Enterprise and Employment Act
- The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001
- P2PFA Industry Standards
- FCA changes
Companies and Brands – What You Need to Know
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- P2P loans now available within a SIPP
- Institutional funding becoming a key financing source for several lenders
Industry Structure
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- Industry development
- P2P loans now available within a SIPP
- ThinCats creates data models to help locate most viable business opportunities
- Lenders working on ways to protect investors against losses
- Market share
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- Figure 14: P2P business lenders, cumulative lending and market share, at 30 September 2019, (in £ million and %)
Competitive Strategies
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- ArchOver accelerates UK expansion
- Institutional funding becoming a key financing source for several lenders
- MoneyThing lowers its investor rates as it shifts its focus onto less risky loans
Company Profiles
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- ArchOver
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- Figure 15: Financial analysis of ArchOver, 2014-18, (£ 000)
- Assetz Capital
- Folk2Folk
- Funding Circle
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- Figure 16: Financial analysis of Funding Circle, 2014-18, (£ million)
- LendingCrowd
- RateSetter
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- Figure 17: Financial analysis of RateSetter*, 2015-18, (£ 000)
- ThinCats
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- Figure 18: Financial analysis of Business Loan Network Limited (under the trading name of ‘ThinCats’), 2016-18, (£ 000)
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Methodology
Further Sources and Contacts
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- Trade associations
- Association of Short Term Lenders
- Financial Intermediary & Broker Association (FIBA)
- National Association of Commercial Finance Brokers
- Peer-2-Peer Finance Association (P2PFA)
- Trade magazines
- Bridging & Commercial
- Business Matters
- Commercial Reporter
- Loans Insider
- Peer2Peer Finance News
- Trade events
- AltFi London Summit 2020
- Financial Services Expo London 2020
- NACFB Commercial Finance Expo 2020
- The Finance Professional Show
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