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A Business Lending Revolution
How small and medium sized businesses are
benefiting from peer-to-peer lending
Todays session
What is peer-to-peer lending & the SME lending landscape
Using technology & innovation to make borrowing simpler & faster
What does the future looks like
Hear from a Funding Circle borrower
Questions
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Peer-to-peer lending
and the
SME lending landscape
What is peer-to-peer lending?
Traditional lending
Peer-to-peer lending
A simple model: Lenders can spread risk by lending
small amounts to hundreds of businesses
Business loan
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
The growth of alternative options is creating
healthy competition in the market
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Total SME lending by provider
Bank lending Non-bank lending
Estimated 85% of SME lending is through the
five big banks
Source: Project Merlin, Bank of England; Funding Circle analysis; does not include loan secured on property
Bank lending includes lending from the five big banks: Barclays, HSBC, LBG, RBS and Santander
Lending pm, £bn
UK Business peer-to-peer lending (P2B) has
now surpassed £700 million
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Mill
ions
Other Business p2p lending Funding Circle lending
Source: Funding Circle analysis
“71% of SMEs approach
only one provider
of finance”
British Business Bank, 2013
Using technology and innovation to
create a better solution
Convenience and simplicity of application
Application Fees
Online application means business
can apply 24/750% of Funding Circle loans are
applied for out of business hours
Assessment Funding Fees
Simplified online application –
no business plans to apply
Instant decision on whether you
have passed the first stage of
approval
Fast decision making
Application Fees
Technology supporting operational
effectiveness means faster decision
making
All Funding Circle loan
applications get a decision in
2 working days
Assessment Funding Fees
Marketplace lending: connecting lenders
and borrowers
Application Fees
Loans are typically funded by a
marketplace where investors compete to
lend to businesses
Only the lowest bid rates are successful
on the loan
32,000 retail investors and
other organisations
Assessment Funding Fees
10% of most loans currently
funded by British Business
Bank*
* The British Business Bank Investment Programme is a part of the British Business Bank programme, which is currently run
directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct
Authority or the Prudential Regulation Authority. British Business Bank plc will operate as a Government-owned financial
institution once HM Government has received European Commission State aid clearance, which is expected in 2014.
Transparency of fees
Application Fees
Transparent fee structures, so businesses
can understand the total costs they will
ever be charged
One-off arrangement fee
Assessment Funding Fees
No early repayment fees
Continued growth of marketplace lending
Diversity of options for businesses
Collaboration to provide real support
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What does the future look like?
Hear from a Funding Circle borrower
Link: https://www.youtube.com/watch?v=1_-GWQz5Uys
Thank you
Funding Circle Limited is authorised and regulated by the Financial Conduct Authority under firm registration number
635439. Funding Circle is not covered by the Financial Services Compensation Scheme. Registered in England (Co. No.
06968588) with registered office at 3 Dorset Rise, London, EC4Y 8EN.
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