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Wellesley Finance makes loans solely to businesses (these business loans include but are not limited to business development finance, business buy-to-let, and first/second charge loans for business purposes). As a result, these loans do not have the benefit of the protection and remedies that would be available to you as a consumer in the context of a non-business loan. Wellesley Finance is not permitted to undertake retail loans to consumers. If you are a retail consumer seeking a non-business loan, you should not seek to obtain a loan from us. Business loans will be secured on relevant assets and these assets are at risk in the event of the loan being in default. A property asset may be repossessed if repayments are not kept up on a loan or other asset secured on it. If you need advice on any of these matters, or you are in any doubt as to the consequences of taking out a loan with Wellesley Finance (including not being regulated), you should seek independent advice from an appropriately qualified professional. Wellesley Finance recommends that you consider whether a potential business loan meets your own creditworthiness, risk levels and objectives. You should be seeking to borrow funds only if you believe that your business activities are capable of repaying those funds and that you have considered the required repayments in relation to your other financial commitments.

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Growth of peer-to-peer lending

June 23, 2016

pygg-916340_1920The 22nd June saw the release of the Bank of England’s Agents’ summary of business conditions for Q2. The quarterly publication is a summary of monthly reports, compiled by the Bank of England’s agents, following discussions with 700 businesses.  The document provides information on the state of business conditions from firms across all sectors of the economy.

Q2 witnessed a moderate annual rate of activity growth. The business sector in particular noticed a small stall in growth due to client decision delays ahead of the EU referendum. Positively, employment growth and recruitment difficulties eased in Q2, however, total labour costs per employee had increased due to the introduction of the National Living Wage.

Despite a decline in capital market insurance and corporate finance activity, bank credit availability has stabilised and peer-to-peer lending continues to expand.

The Bank of England’s agents were interested as to how peer-to-peer lending was being harnessed amongst corporate borrowers. After gathering information, the intelligence suggested that growth in P2P lending had been strong throughout 2015, and this trend has continued into 2016.

Receiving an institutional cash injection into the sector, the supply of P2P funding was supported, allowing P2P lenders to offer larger loans. This escalated loans offer pricked the ears of many borrowers, with property investors finding P2P particularly attractive. Unsurprisingly, “property-related lending had accounted for a large part of the recent growth in lending for some P2P platforms.”

As an overview, the number of P2P lending platforms has continued to grow, and the range of financing options has expanded, including for working capital, such as new types of invoice finance. Furthermore, reports did surface of a myriad of plans to introduce further P2P lending platforms in the future.

Generally, those investigated viewed P2P lending as a useful and growing source of finance, particularly suited to smaller businesses. Those questioned reported that the reason P2P loans skyrocketed in popularity was due to smaller borrowers struggling, or perceiving there to be barriers, with regard to the availability of bank funding.  P2P lending has been championed amongst start-ups and micro firms who have not been able to access bank finance, or more generally amongst borrowers whose projects and concepts fall outside of a bank’s lending criteria. In some circumstances, banks themselves were openly referring clients to P2P lenders as a solution. However, in the majority of scenarios, borrowers were contacting P2P lenders directly.