Peer-to-Peer Lenders in the UK

Peer-to-Peer Lenders in the UK

A round-up of peer-to-peer lenders for SMEs

By Marcia Smith

As online and mobile devices and services continue to develop, it’s becoming increasingly easy to connect businesses with potential investors. As connectivity grows, so does the popularity of peer-to-peer lending, which, in a nutshell, connects businesses seeking funding with potential investors.

Funding Circle

With online developments bringing new opportunities for peer-to-peer lending, many new lending companies have sprung up over the last few years, with some becoming very successful. Once such success story is Funding Circle. It’s now one of the largest operators in this market and has facilitated the lending of nearly £400 million to British businesses.

You can apply online for an unsecured business loan through Funding Circle and you should be told of the decision within 2 working days. If your application is successful, within 7 working days your loan will be listed on the Funding Circle marketplace where investors bid on your requested loan. Here they not only pledge the amount they’ll lend but also the interest rate. Once bidding is complete and the lowest interest rates have been accepted on the loan, your business will make monthly repayments that are distributed back to investors.

Zopa and Ratesetter

Two other peer-to-peer lending companies, Zopa and Ratesetter, can lend between £1,000 and £25,000 to businesses. To apply, visit their websites and select a term and APR then request a quote. You should be told if you’re successful within 24 hours (weekdays only) and the funds are transferred on approval.

Funding Tree

Funding Tree is a peer-to-peer lending platform that covers both business loans and equity investments. This means it not only provides the opportunity to apply for a loan, but also offers the alternative route of offering shares in exchange for funding. If you decide to stick to the loan route, their site has a business loan calculator where you can select the loan amount and the term to see what your monthly repayments would be. You can then apply for this loan online.

Funding Empire

Funding Empire offers peer-to-peer loans for sole traders, limited companies, partnerships and LLPs. As with the above peer-to-peer examples, they offer an online platform that connects businesses with lenders looking to invest. If you did indeed decide to apply for a loan through Funding Empire, they would first conduct a credit assessment of your business. Once satisfied with this assessment, they’ll assign your business a risk rating to help guide investors. Your loan request will then be listed on their site for lenders to pledge money to.

These are just a few examples of UK peer-to-peer lending companies. There are many more than mentioned here, with new ones entering the market each year. This means you can really pick and choose your peer-to-peer lender based on the terms they’re offering.

Remember, when looking for a loan, research can really pay off. By looking in detail at your options you can see not only which lender has great rates, but also key details like the security required and other terms and conditions.