Peer-to-peer lenders to offer Government small business loans

Simon Ward
by Lovemoney Staff Simon Ward on 12 December 2012  |  Comments 2 comments

Funding Circle and Zopa to lend to sole traders as part of the Government's Business Finance Partnership scheme.

Peer-to-peer lenders to offer Government small business loans

The Government is to lend money to small businesses via peer-to-peer lenders, it has been announced.

The money is part of the wider Business Finance Partnership, designed to help small businesses obtain credit.

Peer-to-peer lenders offer an alternative means of borrowing for both individuals and businesses. Lenders and borrowers are matched based on the amount of money required, the term of the repayments and the interest rate offered on the loan. You can find out more about how these companies work in What is peer-to-peer (P2P) lending?

So far Funding Circle has confirmed that it will receive £20 million from the Business Finance Partnership. Since it was founded in 2010, it has lent £60 million to small businesses.

And Zopa has announced it will have £10 million to lend, which marks the first time it has expanded beyond lending to individuals. Zopa was the first peer-to-peer lender to launch back in 2005.

Other peer-to-peer lenders and financial companies are expected to announce their participation shortly.

The news comes just days after it was confirmed that the peer-to-peer industry is to be regulated, following campaigning from the lenders themselves. Read Peer-to-peer lending set to be regulated for more.

You can compare peer-to-peer loan rates here on lovemoney

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Comments (2)

  • Mike10613
    Love rating 626
    Mike10613 said

    If the government printed a bit more money they could lent it to pensioners and people on benefits, so they don't have to go to the likes of Wonga. They won't though, they are friends to business including Wonga and they hate benefit claimants.

    Report on 12 December 2012  |  Love thisLove  0 loves
  • nosbort
    Love rating 160
    nosbort said

    Mike, do you ever think before you post? The Government should NOT lend to anyone and printing money inevitably has only one effect. Inflation, which will hurt those people who you think should borrow from the government the most.

    Report on 13 December 2012  |  Love thisLove  0 loves

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