PEER-TO-PEER platforms will continue to see strong growth from small business borrowers, according to the Federation of Small Businesses.
“P2P has been a very positive story for us,” Ben Baruch, policy advisor for finance, tax and economy at the FSB, told Peer-to-Peer Finance News.
“Our latest small business index for the second quarter showed that there’s been a huge spike in our members looking to apply for P2P finance.
“With credit conditions a little more challenging from banks, firms have been keen to consider P2P.”
Many of the FSB’s members seek P2P financing to manage cash flow and service existing debts, rather than just to support expansion plans, Baruch added.
The policy advisor said that the authorisation of three referral platforms announced in this year’s Budget, should boost the sector even more. The platforms will match smaller businesses that have been rejected for bank loans with alternative finance providers.
“I think P2P will maintain a level of momentum and growth in the short to medium term,” he said. “The real test in the longer term will be whether that rate of growth and uptake will continue with the political and economic uncertainty created by the EU referendum.”