Peer-to-peer lenders have their say ahead of election

By Ryan Weeks on Wednesday 7 June 2017

Alternative Lending

UK’s peer-to-peer lenders call on new government to support both fintech and small businesses by backing the British Business Bank.

UK’s peer-to-peer lenders call on new government to support both fintech and small businesses by backing the British Business Bank.

The polling stations open tomorrow for an election that looks to be a great deal closer than many believed possible.

Pre-election Twitter analysis from consultancy firm Aelm (based on data from June 4th and 5th) gives Prime Minister Theresa May a 53 per cent chance of winning, versus a 33 per cent chance for Labour leader Jeremy Corbyn. Aelm used its own data and sentiment analysis to correctly predict the outcome of both the US presidential election and the EU referendum. Few pollsters were able to do the same.

The UK’s fintech sector has had little to hang its hat on in the build up to the election, with technology mentioned sparingly in the major party manifestos.

Predictably, no fintech firm has come out strongly in favour of any one party. But a number of the nation’s most active peer-to-peer lending firms have today outlined their key priorities in relation to tomorrow’s vote, at the request of AltFi.

Funding Circle, which recently overtook Zopa as the UK’s largest P2P lender by total lending, said that ensuring continued access to capital for small businesses throughout the Brexit process is critical.

“We would like to see the next Government implement measures that enable the British Business Bank to fill the funding gap left by the European Investment Bank post-Brexit,” said Natasha Jones, head of UK corporate communications at the firm.

It’s not the first time that Funding Circle has sounded such a call. Co-founder James Meekings called on the British Business Bank to step up in the immediate aftermath of the Brexit vote, which spelled the death of a planned multi-billion pound funding programme with the European Investment Bank. The Bank has since committed another £40m to Funding Circle, but clearly the company is hoping for more.

A Funding Circle survey of 2,300 small businesses in early May found that 41 per cent would be voting Conservative, while just 13 per cent were planning to vote Labour.

Carmen Dixon, vice-president of PR and Communications at LendInvest, echoed Funding Circle’s sentiments on the British Business Bank.

"Whatever the background or make-up of the new government, we will be urging it progress the (already fairly advanced) commitment made by Theresa May's government to partner with alternative lenders to lend more,” she said. “That means empowering state-backed vehicles like the British Business Bank to put more money onto alternative lending platforms that will in turn lend more into the economy.”

Dixon said that this is a priority for the alternative lending sector as a whole, and that it must not be “lost in the noise”.

ArchOver, a smaller P2P business lending platform, has said that the outcome of this election must serve to restore confidence to UK businesses. CEO Angus Dent points out that this will be the third time that the UK has headed to the polls in as many years, “which is already two times too many”.

“UK businesses need certainty and to be committed to one direction,” he said. Dent called small businesses the backbone of the British economy, and said that they are stepping up to the plate to make the most of a post-Brexit Britain “against all odds”. However, he added that they need confidence and support to grasp the available opportunities.

“And to deliver that, we need a clear winner,” he continued. “This means giving one party a mandate to govern so there’s no prospect of another election or referendum in the next five years. Policies change but as long as there’s a clear winner that can take us in one direction – whatever direction that might be – then we stand a chance of success.”

Meanwhile, RateSetter, one of the UK’s “big three” peer-to-peer lenders, has also called on the next government to be active in its support of the fintech sector:

“The next government must steer the country through a series of huge challenges, not least keeping us safe and managing Brexit.  As it does so, it should make the most of opportunities to get behind businesses so that they can thrive, leading to more jobs, output and economic growth.”

“We’d like to see the new government make an early and clear statement of its commitment to support FinTech, then back this up with action – we should back what we are good at, and believe the UK can become a true world-leader in this area.”

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.

Companies in this Article:

British Business Bank
Funding Circle
Zopa Bank

More like this:

Exclusive: Tide scoops up Funding Options in its first acquisition

Editor's Pick

29 November 2022
Oliver Smith

The AltFi Awards 2022: Here are the winners!

Editor's Pick

2 December 2022
Oliver Smith

MarketFinance rebrands as Kriya

30 November 2022
Daniel Lanyon