P2P lenders helped British Business Bank fund £717m of SME loans last year

PEER-TO-PEER lenders were among the delivery partners helping the British Business Bank (BBB) fund £717m of loans to small businesses last year, the firm’s annual report revealed.

The state-backed institution, which has channelled funds through P2P platforms such as RateSetter, Funding Circle and MarketInvoice, facilitated 94 per cent of its finance through banks outside of the ‘big four’ last year, up from 90 per cent in 2015 and 79 per cent in 2014.

The BBB has a key performance indicator of having more than 75 per cent of its finance facilitated through providers other than the four largest banks over five years, so it has already surpassed that aim.

Increasing numbers of small- and medium-sized enterprises (SMEs) also said they were aware of alternative options, at 50 per cent, compared with 48 per cent the previous year.

Overall, the BBB reported an operating profit of £49.8m for the 2016/17 year, with £9.2bn of finance now provided in total across all its SME supporting projects.

Read more: British Business Bank says P2P is here to stay

“Over the past year, we have delivered strongly against our four key performance indicators, broadening our support to provide more finance and extra choice for smaller businesses, at all stages of their growth,” Keith Morgan, chief executive of the BBB, said.

“It has been a year of significant expansion,, as our market impact continues to grow, we are well placed to respond flexibly to challenges ahead, helping to increase the amount and range of finance available to smaller UK businesses.”

The BBB was set up by former Business Secretary Vince Cable to boost funding to SMEs.

In January, it pledged a further £40m for lending through Funding Circle, bringing the total lent by the UK government through the platform to £100m.

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