Peer-to-peer lenders Funding Circle and Assetz capital are to be the beneficiaries of a new initiative by RBS to refer small business customers turned down for loans by the bank.
A pilot programme begins next week in Scotland & South-West England; with a national roll-out by RBS Business Banking following over the next three months.
The move follows a commitment by the UK Government to force banks to refer customers who do not meet lending criteria to alternative sources of finance.
Crowdfunding is rapidly growing as a means to access finance, and is widely recognised as an alternative source of finance. Peer-to-peer lending to businesses now makes up about one percent of new UK SME lending, but growing at 200% a year, it is set to become a significant presence in the market in the near term.
RBS accounts for 33% of the small business lending market, so is set to become the largest lender to commit to the programme.
Andrew Holgate, MD of Assetz Capital, comments: “In the not very distant past, it would have been unthinkable for even a leading peer-to-peer lender to collaborate with a bank. However, it is clear that there’s a genuine desire emerging for banks to support SMEs more by introducing alternative lending industry options."