Table of Contents
Overview
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- Key issues covered in this Report
- COVID-19: market context
- Economic and other assumptions
- Products covered in this Report
Executive Summary
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- COVID-19 and P2P business finance
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- Figure 1: Expected impact of COVID-19 on P2P business finance, short, medium, and long term, 16 October 2020
- The market
- Market lending expected to rise in 2020 in spite of challenges
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- Figure 2: P2P business lending, 2016-20, by market value, (£ million)
- Property and construction receive greatest level of P2P loans
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- Figure 3: P2P business lending, 2020, largest six sectors, (£ million)
- P2P loans most commonly directed towards the South East
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- Figure 4: P2P business lending, 2020, largest six regions, (£ million)
- P2P business lending to rise by 40% to 2025
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- Figure 5: P2P business lending forecast, 2021-25, by market value, (£ million)
Issues and Insights
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- Extension of coronavirus business interruption loan scheme could affect lenders who do not have access to it
- Business debt and higher risk of insolvency could dampen lending opportunities
The Market – Key Takeaways
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- Market lending expected to rise in 2020 in spite of challenges
- Lending by sector
- P2P business lending to rise by 40% to 2025
Market Size
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- Market lending expected to rise in 2020 in spite of challenges
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- Figure 6: P2P business lending, 2016-20, by market value, (£ million)
Market Segmentation
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- Lending by sector
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- Figure 7: P2P business lending, 2020, by sector, (% of total lending)
- Lending by region
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- Figure 8: P2P business lending, 2020, by region, (£ million)
Market Forecast
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- Short-, medium- and long-term impact on the industry
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- Figure 9: Expected impact of COVID-19 on P2P business finance, short, medium, and long term, 16 October 2020
- Lockdown
- Re-emergence
- Recovery
- Market drivers and assumptions
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- Figure 10: Key drivers affecting Mintel’s market forecast, 2015-24, (in % annual change, % rate, and £ million) – (prepared on 16th October 2020)
- Learnings from the last recession
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- Figure 11: Industry performance following the last recession, 2010-15, (£ million)
- P2P business lending to rise by 40% to 2025
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- Figure 12: P2P business lending forecast, 2021-25, by market value, (£ million)
The Impact of the Economy
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- Annual GDP growth falls to decade low in 2019 and is expected to decline in 2020 due to COVID-driven economic shutdown
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- Figure 13: Annual GDP growth rate, 2015-20*, (% change)
- Bank rate set at a record low of 0.1%
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- Figure 14: Bank rate, 2008-20, by date of adjustment, (%)
Market Trends
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- SME confidence hits a low point
- Credit demand and availability turn positive for small businesses as government schemes implemented
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- Figure 15: Availability of corporate credit provided to small businesses in the past three months, Q3 2014-Q2 2020, (net percentage balance)
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- Figure 16: Demand for corporate lending by small businesses in the past three months, Q3 2014-Q2 2020, (net percentage balance)
- Local authorities increasing their role in P2P lending
Market Drivers
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- Significant increase in insolvencies expected by year end as government measures end meaning lenders must be prepared for greater default risk
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- Figure 17: Company insolvencies in England and Wales, 2015-19, (Number)
- App launched to highlight P2P’s involvement in open banking
Regulation and Industry Standards
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- The Small Business, Enterprise and Employment Act
- The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001
- FCA changes
Companies and Brands – Key Takeaways
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- Former trade body axed and replaced with new wider fintech-based group
- ArchOver partners with R&D lender and rolls out open banking data
Industry Structure
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- Industry development
- Former trade body axed and replaced with new wider fintech-based group
- Industry deals and movements
- New lending market share
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- Figure 18: Net new lending, by selected P2P lender, January-September 2020, (£ million)
Competitive Strategies
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- ArchOver partners with R&D lender and also rolls out open banking data
- Rebuildingsociety launches smartphone app for investors
- Funding Circle announces partnership with Santander to support UK businesses
Company Profiles
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- ArchOver
- Recent company activity
- Financial information
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- Figure 19: Financial analysis of ArchOver, 2015-19, (£ 000)
- Assetz Capital
- Recent company activity
- Financial information
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- Figure 20: Financial analysis of Assetz SME Capital Limited, 2018-19, (£ million)
- Folk2Folk
- Recent company activity
- Financial information
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- Figure 21: Financial analysis of Folk2Folk Limited, 2019-20, (£ million)
- Funding Circle
- Recent company activity
- Financial information
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- Figure 22: Financial analysis of Funding Circle, 2015-19, (£ million)
- LendingCrowd
- Recent company activity
- RateSetter
- Recent company activity
- Financial information
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- Figure 23: Financial analysis of RateSetter*, 2015-19, (£000)
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Methodology
Further Sources and Contacts
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- Trade associations
- 36H Group
- Association of Short Term Lenders
- Financial Intermediary & Broker Association (FIBA)
- National Association of Commercial Finance Brokers
- Trade magazines
- Bridging & Commercial
- Business Matters
- Commercial Reporter
- Loans Insider
- Peer2Peer Finance News
- Trade events
- AltFi Festival of Finance 2020
- FSE Week
- NACFB Commercial Finance Expo 2021
- The Finance Professional Show
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