British Business Bank relies on P2P platform loan due diligence

THE British Business Bank (BBB) has said it doesn’t conduct due diligence on individual peer-to-peer loans but relies on the platforms it is channelling funds through.

The state-backed business development bank has faced parliamentary questions from former City minister Lord Myners regarding whether it independently vets every loan it makes through P2P lending platforms.

But a spokesperson for the BBB told Peer2Peer Finance News that rather than checking individual loans, the lender conducts “extensive due diligence on the platforms themselves.”

Anyone seeking funds from the BBB must go through a rigorous application process that details the investment structure and strategy as well as elements such as how funds are deployed, the returns and its track record.

It may also conduct background and referencing checks and interviews with current, previous and potential investors.

Read more: British Business Bank extends funding programme to P2P lenders

The BBB has previously channelled funds via P2P platforms ThinCats, RateSetter, Funding Circle and MarketInvoice.

Its latest annual report for 2018 showed that it lent over £6.6bn to more than 89,000 businesses in the UK over the past year.

This represents a 27 per cent increase on the £5.2bn which was lent in 2017, the bank confirmed.

More than 90 per cent of the finance the bank provided was through smaller, newer, or alternative finance providers. In the 12 months ending on 31 March 2019, the bank also added 13 new delivery partners across its programmes, bringing the total to over 130.