By Samantha Goins on Friday 28 November 2014
Peer to Business lending is not an asset class that you can afford to ignore. It’s fast growing (900% growth since 2011), it’s significant (£193m raised in 2013) and it’s set to challenge and disrupt traditional lenders – the banks that have fallen out of favour with both the public and small businesses.
For that reason Intelligent Partnership, the alternative investment research provider, has published their second in a series of alternative finance sector reports – this time round looking at peer to business lending.
You can download a complimentary copy of the 40 page report here.
“Peer to Business lending is the largest and fastest growing sector of the Peer to Peer market in the UK. It tends to have higher rates of interest paid to investors and also often offers security behind the loans meaning that defaults don’t have to turn into losses for investors. This report shows the breadth of the market, the opportunities for growth and the potential to profit from this alternative finance industry as it takes a greater and greater market share of what was the sole domain of banks in the past.” Stuart Law, Chief Executive, Assetz Capital
Check out the backstory and statistics charting the growth of alternative finance from page two onwards
One of the reasons for its growing popularity is the high yields on offer, which are very attractive in our low interest rate environment.
Review the returns and how they measure up against traditional investments on page 8
And if you have the perception that alternative finance is always high risk, speculative activity, think again. Many projects are asset backed or based in sectors with secure cash flows.
Find out more about asset backed projects that offer investors protection from page 20 onwards
Investors in P2B also have the satisfaction of knowing that they are supporting SMEs – the most vital part of our economy - and stepping in where the banks have failed us.
Find out more about how P2B benefits SMEs on page 28
Finally, governments have caught on to just how important the P2B development is and are revising the ISA rules to allow the inclusion of P2B investments, promising to take this asset class mainstream within the next 2-3 years.
Learn how P2B is being included in ISA’s and SIPPs and is set to become a staple of everybody’s portfolio on page 34
It’s a fast moving sector, but the signs are there that it is set to carry on growing and become an accepted part of the investment landscape. If you want to understand where P2B has come from, how it works and why it’s so popular right now, then you need to read this report.
Guy Tolhurst of Intelligent Partnership concluded; “Encouragingly we are seeing more and more interest in this sector from intermediaries. SIPP Operators and Wealth Managers are traditional gate-keepers of investment capital – they are looking for education first and then access to comparable data and due diligence; to first establish why, and then how they can evaluate the different platforms and propositions.”