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Will Brexit be good or bad for Britain’s small firms?

It’s always been tough for small and medium sized British firms to find enough money to enable them to grow into world-beaters. But since 1994, the Enterprise Investment Scheme has given generous tax incentives to investors to encourage them to put money into small unlisted companies, either directly or through a fund. This scheme has been very successful in helping the UK’s technology sector.

To see how Brexit might affect it, and small companies in general, we’ve turned to Mark Brownridge, director-general of the Enterprise Investment Scheme Association, the trade body for member firms.

The evidence for Brexit’s impact on small firms paints “a confusing picture” admits Brownridge. On the one hand “the majority of SMEs are by their nature small and growing and don’t have significant import and export supply chains”, which suggests that “leaving the EU isn’t a major concern”. Most firms are taking the view that “without clarity in terms of a trade deal, the best option is to keep calm and carry on”.

Still, it’s undeniable that smaller companies will feel the pain from any economic slowdown: research by the British Business Bank suggests that only 5% of SMEs expect that they will benefit as a result of Brexit.

There are obvious concerns about the labour market

One major area of concern is how Brexit will affect the labour market, both in terms of EU workers already in the UK and of future migration. Brownridge points to research by Deloitte that suggested that “as many as 47% of skilled EU workers in Britain could leave the country as a result of the fallout from Brexit”. Even if large numbers of people don’t leave, SMEs are particularly worried about “the lack of skilled labour coming in from the EU to provide them with the technical skills and workforce they require to drive their business forward as there is a lack of technically skilled people in the UK”.

This shortage of skilled workers is a big problem for all British companies. Brownridge points to a study carried out by the Open University, which found that “nine in ten companies had struggled to hire workers with the required skills in the past”. So it’s not surprising that Brownridge would like to seem an immigration policy that is as close to free movement of travel across borders as possible. At the very least, the government “could do more to address the situation”.

At the moment the UK is one of the world’s major technology hubs, “with around a fifth of technology leaders naming the UK as the most promising global market for technology breakthroughs, behind only US and China. London’s “vibrant tech scene” attracted $3.4bn in venture capital investment – four times as much as Paris, the next largest European city. But there is little room for complacency, says Brownridge, as “there is no doubt that a number of major European cities are jockeying for position as the finance capital of Europe, and London has a fight on his hands”.

But it’s not all doom and gloom

Still, it’s not all doom and gloom, as there are some clear benefits to Brexit. After all, “many of the negative aspects of the EIS scheme are actually imposed by EU state aid rules”. For example, at the moment, “companies are having to delay much needed fundraising” thanks to “rule changes included in the 2015 and 2016 Finance Acts, most of which were intended to secure EU state aid approval”. Once Britain leaves the EU, we will be able to “take back control of the state aid rulebook and rationalise rules relating to granting of EIS relief to small firms”.

But even in this case, it is unfair to put the blame solely on Brussels, says Brownridge: “There is scope to reduce the uncertainty and complexity within the current EU state aid framework if HMRC were to adopt a more pragmatic approach to its interpretation of the existing legislation”, says Brownridge. HMRC “must be given the resources it needs to process applications more quickly”.

All in all, Brownridge remains optimistic as “the government seems keen to build an entrepreneurial spirit and make the UK a hub for small businesses and we certainly believe that EIS and SEIS can play a significant part in creating that environment”. While “funding has been an issue for SMEs for a number of years now” the evidence suggests that “that cash has flown in from abroad over the past year”.

Source: Money Week

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London’s small firms hit with £8.2bn business rates bill

The business rates bill hitting London firms will rise to £8.2bn today, raising the prospect that firms could move out of central parts of the capital due to high property costs.

Both the national living wage and business rates increase across the UK today, and, according to the Federation of Small Businesses (FSB), London now pays 33.1 per cent of the country’s total business rates bill.

Meanwhile, the national living wage will rise by 4.4 per cent today, from £7.50 per hour to £7.83 per hour.

High property costs are threatening to push some businesses out of the centre of London. A recent survey from the FSB found that 60 per cent of Zone 1 firms fear they will not be able to afford their current premises in five years.

Sue Terpilowski, London policy chair at the FSB, said there should be a major review of the business rates system.

“Many small business in London will see their business rates increase upwards of 20 per cent on 1 April,” she said.

“The high cost of doing business is putting additional pressure on wages and inflation for London businesses. The cost of employing staff generally and the heavy burden of cripplingly high commercial space costs is having additional negative impacts on small businesses.”

Source: City A.M.

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New business rates changes to help Scots businesses to ‘thrive’

NEW business rates changes coming into force in April will help stimulate the economy and improve transparency, the Scottish Government has said.

From April 1, there will be no business rates for unoccupied new properties and tenants who take them on will be rates-free for the first year.

Where properties are improved, they will not pay any additional rates as a result of the improvement for 12 months.

Eligible childcare day nurseries will receive up to 100 per cent relief.

The changes were announced last September following the Barclay review of business rates.

Finance Secretary Derek Mackay marked the start of the new policies by visiting The Orchard Nursery in Edinburgh.

He said: “These changes – many of which are unique to Scotland – will help our businesses to continue to thrive while also ensuring they make an appropriate contribution to important local services. When I appointed Ken Barclay to review the rates system, I tasked him with updating it to better support business growth, encourage long-term investment and enable businesses to better navigate fast-changing marketplaces.

“The changes we put in place – in many ways going further than the Barclay recommendations – also allowed us to offer wider benefits, such as supporting the expansion in funded early learning and childcare entitlement with the relief for nurseries. I’ve been impressed with what I’ve seen at The Orchard Nursery and hearing how they intend to use the savings they will make next year.”

The Scottish Government said the relief for nurseries was designed to support nursery provision throughout Scotland by reducing overheads for nursery owners, saving the sector around £6 million next year.

Vicky Coia, owner of The Orchard Nursery, welcomed the changes.

She said: “We are pleased the Scottish Government has led the way by creating business rate relief for the nursery sector across Scotland. It will allow us to invest in more training, staffing and resources to enhance staff practice and the opportunities and experiences we offer the children and their families.”

Andy Willox, the Federation of Small Businesses (FSB) Scottish policy convenor, said: “These new measures from the Scottish Government take us a step closer to developing a fairer, smarter rates system. FSB made the case for these changes in our submission to the recent rates review, and we’re pleased to see ministers turn them into real help for local firms.

“Local nurseries are a prime example of smaller businesses that are fundamental to the success of their local community and economy. These new rates should ensure that they aren’t penalised because they operate from specialised premises.

“At FSB, we’re firmly of the belief that if a business makes an improvement to their property they should be given an opportunity to recoup their costs before facing a higher bill. The Scottish Government’s new business accelerator relief does exactly that.”

The Barclay review set out 30 recommendations for changes to the business rates system in Scotland.

Two of the report’s recommendations were rejected. Farms will not be placed on the Valuation Roll and they will continue to be exempt from rates. Large-scale food processing plants on agricultural land will also not become subject to business rates.

Source: The National

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How invoice financing could help London businesses

Setting up and running a business in London offers a lot of fantastic opportunities across many industries, from finance and technology to catering and more. With these opportunities and the chance to grow comes plenty of obstacles and challenges though. As one of the most expensive cities in the world, the costs can set many back. Invoice finance can offer a solution to many London businesses in various ways.

Cover the rent

One of the largest expenses for any London business will be renting office space. The housing market gets a lot of attention due to its ever-increasing prices in the UK’s capital city with less paid to commercial buildings. In London the average cost per person to rent office space ranges greatly between £650 to £1400 per person. This is more than double and at times triple that of that in Birmingham, Manchester and Leeds. Invoice financing can help provide the finance at the start of the month to cover rent before clients pay their invoices.

Get ahead of the competition

Most other businesses know the value of setting up at least a base in London, meaning whichever sector yours works in there will likely be plenty of competition nearby. Invoice financing offers the opportunity to grow your business by providing finances up front that you are owed by clients. Rather than hold off from any ambitious projects until they have settled, you can use these funds to grow and take advantage of opportunities your competition in London may otherwise miss out on.

Stay on top of bills

The main thing that kills 25 per cent of businesses is poor cash flow. In London especially, this can occur due to costly bills and overheads going out before client payments have landed. With invoice financing your cash flow process can be smoothed over by having easy and quick access to the cash required when it’s needed. This can ensure you stay on top of bills and don’t become one of the 25 per cent.

Starting up

London provides a great environment for starting a business, with it a go to place for technology and financial start-ups. Along with ensuring you have enough initial capital to get started, you will need enough to cover the costs and develop growth. Invoice financing can help work towards this if your capital starts to run out and the business has to wait a few weeks or months before clients are due to pay (with little room to negotiate being a small company).

Starting or running a business sin London can be highly successful and invoice finance could be a solution worth investigating to create a strong financial process.

Source: London Loves Business

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Small Businesses Are Optimistic About the Future

The overwhelming majority of small-business owners (84%) are confident in the future of their business, according to a new study produced by the National Small Business Association and ZipRecruiter. More than half (53%) of the 1,633 small-business owners surveyed said that their revenue has gone up. That’s the first time since 1997 that the majority of companies reported an increase. The results are largely encouraging, though owners weren’t without worry.

“In the past two years, the number of small-business owners who say they expect to see an economic expansion in the next year has more than doubled,” said NSBA President Todd McCracken in a press release. “Unfortunately, the ever-rising cost of healthcare remains the biggest challenge small businesses face.”

The state of small-business jobs

Jobs and hiring practices were a major focus of the report. One of the key findings — that automation does not necessarily mean fewer jobs — differs from what’s expected to happen at many large companies.

The survey showed that only 9% of the small-business owners who plan to implement some type of automation believe that doing so will allow them to employ fewer people. Almost 1 in 4 (24%) said automation will cause them to need more workers and the majority (67%) said it will not impact their employee count either way.

In addition, small-business owners believe that the gig economy will not impact how many full-time employees they hire. While 37% have added part-time employees, 70% of them were new hires, and only 17% were current full-time employees who were reduced to part-time.

The survey also had some good news for employees. Over half (58%) of small-business owners said they raised wages in 2017 and 64% said they expect to in 2018. Nearly a third of those surveyed (32%) noted that they were having trouble finding qualified applicants due to the tight labor department.

“We tend to think of corporate America when we think of career ladders, however small businesses have ample opportunities for career growth,” said ZipRecruiter Chief Economist Cathy Barrera in the press release. “66% of all small businesses offer opportunities for promotion, and at companies with more than five employees, that number rises to 85%.”

What does this mean?

Strong small businesses are good for the economy and good for workers. They give people options and create opportunities that otherwise may not exist.

In order to continue this strong market for small business, it’s important that the government address healthcare. That was named by 32% of those surveyed as their biggest challenge to their future growth and survival. That was tied with economic uncertainty and followed by lack of qualified workers at 26%.

Still, despite those concerns, small business is thriving and confidence among owners is high.

Source: Yahoo Finance UK

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UK tech driving SME growth forecasts

Days after official documents were leaked claiming that the UK will be considerably worse off in 15 years’ time regardless of which deal is signed with the EU, small business confidence continues to hold firm for the fourth consecutive quarter – according to new data from the British Business Barometer by Hitachi Capital Business Finance.

The new data suggests that small business outlook has remained bullish over the last 12 months, despite the huge uncertainty over Brexit negotiations, customs union and the countless reports warning of imminent economic doom. Overall, 39 per cent of small business owners predict growth for the next three months – a slight rise on the final quarter of 2017 and little change on this time last year.

At a time when Britain is becoming a world leader for tech innovation – spanning the FinTech, P2P and Insurtech sectors – the Hitachi research revealed that SMEs from the tech and telecoms sector were the most confident and most likely to predict growth for the months ahead (52%).

Small business outlook for the three months to 31 March 2018: Comparison of results over 3 and 12 months respectively.

Q1 2018 Q4 2017 Q1 2017 12 month change
Significant expansion 6% 7% 6% 0
Modest / organic growth 33% 31% 34% -1
Stay the same / no change 47% 48% 46% +1
Contract / scale down 8% 9% 7% +1
Struggle to survive 4% 5% 5% -1

Sector findings

Whilst predictions on growth remained largely unchanged for small businesses as a whole, by sector the picture was quite different. Confidence levels by industry sector varied widely between 52 per cent and 28 per cent.

The most confident: Business confidence was highest in the IT & Telecoms sector, which saw the highest rise in confidence since the final months of 2017 (up 8%) and growth predictions have continually risen over the last 12 months. It is also the sector most likely to be hiring staff (24% – up 2% since Q3 2017) and 17 per cent planned to invest in new equipment – up 8 per cent since Q3 2017.  The proportion of business owners planning to expand into new or overseas markets has also increased by 2 per cent over the period.

The biggest rise in confidence over the last 12 months was noted in the Transport and Distribution sector – up 13 per cent to 35 per cent.

The biggest fall in confidence: In contrast, the Finance and Accounting sector saw the biggest drop in confidence (down 9% to 42%), perhaps influenced by recent concerns over the post-Brexit role of the City of London on the world stage and reports of significant job losses.

The least variation in outlook: Real Estate and Media were the sectors where small businesses seemed to feel least affected by the context of Brexit uncertainty, with business leaders most likely to predict no change whatsoever to their business outlook for the months ahead (46% for Media and 45% for Real Estate).

The lowest level of confidence: Agriculture and Construction where the sectors where fewest small businesses predicted any form of growth in the next three months (28% respectively) and in both sectors confidence has fallen since the final quarter of 2017.

The percentage of small businesses that predict growth in the 3 months to 31 March 2018 by industry sector. 

Comparison of results over 3 and 12 months

Q1 2018 Q4 2017 Q1 2017 12 month change
IT & Telecoms 52% 44% 43% +9
Media & Marketing 49% 46% 45% +4
Legal 47% 42% 0%
Manufacturing 45% 36% 49% -4
Finance & Accounting 42% 44% 51% -9
Real Estate 41% 45% 42% -1
Education 40% 40% 45% -5
Medical & Health Services 39% 39% 39%
Retail 35% 40% 34% +1
Transport & Distribution 35% 20% 22% +13
Hospitality & Leisure 31% 37% 39% -8
Agriculture 28% 23% 31% -3
Construction 28% 35% 32% -4

Regional highlights

An assessment by region also suggests the gap is closing between businesses in the north and south – specifically London which is often seen to be an engine room for small businesses. For example, the biggest regional rise in the proportion of businesses looking to hire staff happened in the North (7% rise to 16%) and Wales (8% to 13%). The North also saw the biggest quarter-on-quarter rise in the number of SMEs looking to expand into new or overseas markets (up 5% to 15%). Conversely in London, where the proportion of small businesses looking to expand into new markets, hire new people or invest in new equipment is higher than most other regions, planned activity in all these areas fell for the months ahead.

The drivers of growth

The bullish confidence of small businesses in an uncertain climate is partly explained by the fact that many are focusing on factors within their control and putting in place specific initiatives to help achieve growth and financial strength. Overall 70 per cent small businesses identified strategies they were pursuing to secure growth in the months ahead. Most prevalent were a range of financial tactics: A focus on keeping costs down (36%), whilst 19 per cent were looking to improve their cash flow and 13 per cent were planning to invest in new equipment. Almost one in five enterprises (18%) were looking to expand into new markets and 15 per cent planned to hire new staff.

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance commented: “A day barely seems to go past without warnings about the UK’s economic future: Brexit seems to have created an entire industry selling doom. The day-to-day reality with small businesses is quite different. Many are fully aware there will be a Brexit ripple that affects them at some point but the majority of small business owners are being very pragmatic, planning ahead and focusing on what is within their control. Some sectors see market uncertainty as an opportunity, many businesses are already looking to open up new markets and, across the board, SMEs are key for employment and job creation. Access to finance is key to helping all these plans happen and at Hitachi Capital Business Finance we will be broadening our range of finance solutions in 2018 to help more small businesses secure the funding they need to power growth, invest in equipment and fulfil their potential.”

Source: London Loves Business

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How SMEs can survive and thrive in 2018

There’s a bulk of changes taking place in the UK, and indeed the wider world, which are set to impact the business community in one way or another.

Let’s look at some of the trends that might affect your company in the year ahead.

Your online presence will be even more important

According to the Capital Economics’ SME Growth Tracker, 90 per cent of British businesses plan to sell their products online by the end of 2018.

As it stands, just 64 per cent sell online, but it’s largely the smaller companies that plan to make headway by selling goods on their own websites.

Huge strides will be made in tech

The government’s industrial strategy, which puts tech at the top of the priority list, is set to give British industries a boost, particularly companies in the construction, artificial intelligence (AI), automotive, and life science sectors. It’s also thought that AI products could become accessible to small firms as costs come down.

But in a burgeoning tech world comes the increased threat of cyber attacks. Make sure you have the systems in place to protect your business from this danger.

You face a surge in regulatory changes

2018 is the year when regulators introduce a whole host of new rules, including Mifid II, PSD2 (which includes Open Banking in its midst), and GDPR, to name but a few.

For many businesses, this has been, and will continue to be, a huge operation to ensure they meet the necessary standards.

Plan a time each week or month to review your progress so you can comfortably meet deadlines.

The gig economy will grow

As more people go freelance in preference for flexible hours, we will gradually see the end of the traditional 9 to 5 working day.

In fact, a report from Timewise and EY, indicates that a whopping 87 per cent of British workers are either keen to work flexibly, or are already doing so.

Companies should take stock of this – and perhaps look at measuring employees’ on what they deliver, rather than the hours they sit at their desk.

Giving employees more freedom could actually benefit your business in the long run.

Keep a beady eye on Brexit

You’ve probably had enough of the dreaded “B” word, but it’s crucial to keep one eye on the outcomes of negotiations to gauge the potential impact on your business, particularly if you import or export goods.

In fact, research from the CBI in November found that optimism among SME manufacturers had deteriorated for the first time in a year as growth slowed and pricing pressure increased. Yet it’s not all doom and gloom, because the research found that companies were spending more on staff and innovation.

This year it will be more crucial than ever for British businesses to stay on their toes if they want survive, and ultimately thrive.

Peter Alderson, managing director of business finance group ​LDF, says:

“For many business owners across the UK, January is a time to consider the year ahead. Some will be adapting to accommodate pending changes in regulation, while others will be facilitating new business development, or recruitment aims. It’s very much a time for taking stock.

“There’s no doubt that a number of changes are coming for small business in 2018 which will, in turn, create some challenges over the next couple of years.

“Access to finance remains a critical consideration for UK small business, and more are exploring financial options outside of traditional bank offerings that can support the level of business development needed to compete in new tech and online spaces.

“It’s crucial that businesses, are financially agile enough to adapt.

“We’ve seen a large uplift in demand for our services in the last 12-months, which saw us deliver over £500m in funding to small business in 2017, up more than 30 per cent on the previous year, and this shows no sign of slowing.”

Source: City A.M.

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Get Started: Small businesses more interested in loans

Small businesses are getting more interested in borrowing, but many are still finding it hard to get loans from banks.

That’s the finding of a quarterly survey of small businesses released last week by Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet Corp.

An index that measures small companies’ demand for financing, including loans and investment money, rose 3.6 percent to 37.5 from 36.2 in the third quarter. A separate index, which measures their ability to get financing, rose 0.2 percent to 33.1 from 33.

But while demand is up, many owners aren’t in the market for credit. Thirty-eight percent of small companies didn’t get any credit in the last quarter. And small businesses are still finding it harder to get loans than mid-sized ones do — 61 percent of small company owners called debt financing difficult to get versus 31 percent of mid-sized business owners. During the previous three months, 36 percent of small businesses were able to get bank loans, compared to 69 percent of mid-sized companies.

The survey findings show that owners who have shied away from risks like borrowing ever since the election may be feeling more secure about taking on debt. But banks that are adverse to risk, especially given the rules imposed on them by the Dodd-Frank banking law, are still wary about small companies.

On a positive note, many companies wanted financing because they want to grow or acquire another business — 44 percent of small businesses, and 47 percent of mid-sized ones. And 46 percent of small companies and 70 percent of mid-size ones who weren’t trying to raise financing because said they didn’t need the money because their cash flow is good.

The survey, conducted from Oct. 31 to mid-November, questioned 1,341 companies from the Dun & Bradstreet database that have revenue up to $100 million. Dun & Bradstreet compiles credit reports on businesses of all sizes.

ONLINE LEARNING

Business owners with down time the last week of the year might want to do some online learning. There are many free online seminars, workshops and courses they can take on their own, at any time.

SCORE, which sponsors live online seminars, has them archived on its website, www.score.org . The seminars have dealt with topics including marketing, managing, social media and business plans. The organization, which offers free advice to small businesses, also has interactive courses available on its website.

The Small Business Administration also has a variety of online courses, including business basics, and also courses about cybersecurity, customer service, disaster recovery and starting a business. You can find them at www.sba.gov.

Source: Yahoo News UK

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56% of SMEs consider securing finance a struggle

More than half of small and medium-sized businesses (SMEs) in the UK are struggling to get the funding they need to help boost investment and productivity, new research has revealed.

According to merchant bank Close Brothers, only four out of ten SMEs have been able to secure funding from their chosen lender.

Of these, 34 per cent felt that the capital available to them wasn’t enough to fund their investment plans, while a further 24 per cent said that the type of funding they had used was too expensive.

Since the financial crisis, Britain’s high street banks have been less willing to lend to small businesses over fears they might default.

However, the market has recently started compensating to some degree with the growth of challenger banks and peer-to-peer lenders – giving businesses more options.

“Lenders could certainly do more,” said  Mike Cherry, chairman of the Federation of Small Businesses.

“One in five of our members had their credit applications turned down in the third quarter, while over half were offered a lending rate of over 4 per cent,” he added.

Adrian Sainsbury, banking division managing director at Close Brothers, said the right funding was “integral” to improving productivity and investment.

“Low productivity hinders economic growth and improving productivity is vital, particularly as the UK prepares to leave the EU. Given their importance to the economy, SMEs will be central to potential productivity gains,” he said.

“SMEs need access to the right finance and support to invest in training staff or adopting new technologies so increasing awareness of financial options is crucial.

“Bespoke funding solutions which align to specific needs and growth plans are always preferable to a one-size-fits-all approach.”

Close Brothers polled nearly 1,500 SME decision makers across the UK, France and Germany.

Its research also revealed that German SMEs were better able to access funding than their UK peers, while French SMEs were less able to do so.

Just 33 per cent of French SMEs were able to access capital through their chosen funding route, compared to 47 per cent of German SMEs.

The current level of UK productivity has flat-lined since the financial crisis.

Last month, the Office for Budget Responsibility downgraded its estimate of productivity growth by 0.6 per cent on average for the years to 2022.

It said that while productivity growth is expected pick up slightly in the future, it will remain significantly lower than its pre-crisis trend rate over the next five years.

This is bad news for UK workers as slower productivity growth means wages will not rise as quickly.

Source: Independent

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Pension funds, small businesses boost growth in UK alternative finance

LONDON (Reuters) – Britain’s alternative finance market grew by 43 percent in 2016, research showed on Friday, with interest from start-ups, small businesses and institutional investors helping to boost demand for services such as crowdfunding and peer-to-peer lending.

Last year, 4.6 billion pounds ($6.2 billion) was raised through alternative channels, up from 3.2 billion pounds in 2015, according to a survey of 8,300 investors and 77 crowdfunding or peer-to-peer platforms.

“Alternative finance has entered the mainstream and is likely here to stay,” said Byran Zhang, executive director of the Cambridge Centre for Alternative Finance (CCAF) at the university’s Judge Business School, which conducted the survey.

Approximately 72 percent of the year’s market volume, or 3.3 billion pounds, was driven by demand from start-ups and small businesses. That was up from 50 percent the year before.

Major banks reined in their lending in the wake of the financial crisis, and many small businesses complain of poor treatment and difficulty accessing funds.

Several alternative finance providers have sprung up to try to fill the gap, such as peer-to-peer lender Funding Circle, which announced this week it had lent more than 3 billion pounds to almost 40,000 businesses since its launch in 2010.

Another, MarketInvoice, offers peer-to-peer loans secured against businesses’ invoices and has lent 1.7 billion pounds since 2011.

ATTRACTING ATTENTION

After peer-to-peer business lending, the biggest categories were peer-to-peer consumer lending, peer-to-peer property lending, invoice trading, equity-based crowdfunding, real-estate crowdfunding and reward-based crowdfunding.

Institutional investors including pension funds, asset managers and banks were also increasingly backing the platforms, the survey showed. Funding from these sources accounted for 34 percent of peer-to-peer property lending, 28 percent of peer-to-peer business lending and 32 percent of peer-to-peer consumer lending.

 Peer-to-peer lending can offer relatively high returns. Funding Circle, for example, currently boasts an all-time average annual return of 6.6 percent.

But the sector’s fast growth has also caught the attention of the Financial Conduct Authority, which is looking at introducing new regulation for the sector, highlighting concerns about past loan losses and due diligence.

This week, peer-to-peer lender RateSetter, the UK’s third-largest, reported a pretax loss of 23.7 million pounds after it took a hit from a bad loan.

Source: UK Reuters