There are a considerable number of peer to peer lending sites in the UK. In fact, the United Kingdom dominates the peer to peer lending market in Europe, currently taking up a staggering market share of 72.5%. In relation to the worldwide market, the UK is the third-dominant lending market, exceeded only by China and the USA.
If you decide to try and secure a loan or lend funds through a P2P lending site, the next decision is which platform to use. Hundreds of P2P lending websites have cropped up in the last decade, and each come with their own perks. Some sites are designed for small businesses to acquire funding, while others aim to provide personal loans.
Broadly, you can group peer to peer lending into three categories:
- lending to consumers
- lending to businesses
- lending against property.
Some P2P lending platforms are dedicated to just one of the above types of peer to peer lending, while others offer all three. The list below covers some of the most popular providers, as always. The list below sheds light on some of the most popular peer to peer lending platforms in the UK for lenders and borrowers.
Loanpad
One relatively new P2P lending platform offering competitively low loan-to-value loans is Loanpad. They specialise in short-term loans designed to fund property development, business funding or bridging. The average loan size on the site is £151,000, and the loan terms tend to be between 3 and 18 months. Loanpad gives investors the option to invest through a peer to peer ISA, too, making it an attractive option tax-wise. One of the unique aspects of Loanpad is that you accumulate interest on your account daily, rather than monthly. Investment through Loanpad is automatic, as your money will be split equally between every active loan on the platform, which offers a higher level of security for the investor.
Blend Network
Founded in 2017, Blend Network specifically targets property professionals, enabling crowdfunding in the real estate sector. The minimum investment is £1,000, and the site is open to both company and private investors worldwide, except those from blacklisted countries, the USA or Canada. The target borrowers are UK real estate developers, who can offer bridge and development financing for acquiring and refurbishing residential and commercial property across the UK. Borrowers can secure finance of up to £3 million with loan terms of 2-36 months.
Zopa
One of the longest-standing peer to peer lending platforms in the UK is Zopa. Since its launch in 2005, it has grown to have around 50,000 active lenders and was crowned the Best Personal Loan Provider in the 2020 British Bank Awards for the fourth time in a row. It’s a flexible platform, allowing lenders to invest as little as ten pounds. Zopa operates using a microloan model, where investors lend a lump-sum amount which is then divided into smaller loans distributed to multiple borrowers. Borrowers can expect fees of 0% – 2% of the loan, and investors can expect to see an average return of up to 5% on the amount they loan out.
Zopa is quick and easy to use, and they have even developed an app for investors and borrowers to track their money on the go. In the app, you can keep track of your loan and investment, and find out your credit score. Borrowers can apply for a loan in a matter of minutes, with no fees or paperwork. Advisers are available on live chat to answer queries.
RateSetter
Another leading peer to peer lending site is RateSetter, winner of the prestigious Queen’s Award for Enterprise in 2019. The site has attracted over 84,000 investors since launching in 2010, with over £3.6 billion invested through the site in its lifetime. They provide the option to invest in their Innovative Finance ISA tax-free. Businesses looking for a loan can enjoy competitive rates and flexible repayment terms.
Investors have the security of the RateSetter Provision Fund, which protects investors against poorly performing loans. Investors can also request to release their investments at any time. As soon as there are lenders to take over your investment, RateSetter will release your money.
Funding Circle
Another popular P2P lending site is Funding Circle, who have facilitated access to funding for over 57,000 UK businesses, who have borrowed a total of £6.2 billion since the site began in 2010. The site offers unsecured loans exclusively to companies. Applicants need only fill out a simple application form, which takes no more than ten minutes, and they will receive a decision within 24 hours. Funding Circle has one of the highest average return rates for lenders, currently sitting at 7%. Borrowers are charged 1% on loan repayments, and there’s no upper investment limit.
Funding Circle has one of the higher default rates in the industry, currently 1.5%. This makes it one of the riskier platforms to use, but also offers higher projected returns and has even been used by the government. Funding Circle’s offices are located in London, and all loans are in British pounds, though the company has expanded abroad and now has a branch in the USA, Germany and the Netherlands.
Lending Works
Through Lending Works, investors can earn up to 5.4% per year on the funds they loan. Lending Works has an award-winning customer service team and is one of the most flexible sites for lenders, who can reinvest, draw income or withdraw their funds early. The site also offers security to investors, who will benefit from first-cover through the Lending Works Shield.
For those looking to borrow, the application process is quick and easy. The site offers 12.9% APR representative, and borrowing parties can pay back their loans early at any time without incurring extra fees. It can take just 48 hours from applying to see your borrowed funds.
ThinCats
ThinCats is a market leader in peer to peer lending for SMEs. Since its launch in 2010, the platform has facilitated more than £663 million of loans to businesses. ThinCats can offer some of the biggest funding solutions on the market, offering loans varying from £1 million to £15 million to SMEs. Loan markets must have been operating profitably for at least two years, making it only suitable for companies looking to grow. Companies can use the loans as working capital, for finance restructuring or for acquisition financing. The company is based in Leicestershire, and loans are only available in GBP to UK-based businesses.
Assetz Capital
An ideal platform for small businesses is Assetz Capital, which connects small businesses and property developers with investors in the UK. Total loans funded to date exceeds £50 million since the site launched in 2012, which is impressive for a platform that has a minimum investment amount of £1. Assetz Capital offers a fixed pricing approach, as all interest rates are set by a team of lending experts in-house.
The site offers a variety of different loans, from commercial mortgages, development loans, buy-to-let loans, secured SME loans and bridging finance. Any adult in the EU holding a UK bank account is eligible to invest. Borrowing is open to UK real estate developers as well as other SME companies, with a financing volume of up to £2.5 million. Loan terms start from as little as one month and go up to five years.
LendingCrowd
This Edinburgh-based peer to peer lending platform, LendingCrowd, facilitates business to business lending. Companies can secure a range of loans for debt refinancing, working capital, asset purchase and growth in a variety of sectors, including the hospitality, retail, e-commerce and manufacturing industries. Businesses can secure loans between £5,000 and £500,000, with loan terms of six months to five years. Any UK resident aged 18 or over can invest on LendingCrowd, with a minimum investment of £20. The site is only open to UK-based companies seeking finance, and all loans are in GBP.
Lendwise
One P2P site facilitating crowdfunding for students is Lendwise. The site offers unsecured loans to UK citizens pursuing graduate studies, such as a PhD and Master’s. Lendwise is the brainchild of Ioannis Georgiou, founded in 2016. The company is located in London, and only offers loans to UK students. The platform is open to any UK-based investors over the age of 18, with a minimum investment of just £10. Students can secure finance for their MBA, Master’s or PhD programme with a minimum loan of £5,000 and a maximum loan of £100,000. To allow for students to complete their education and secure a job to pay back the loans, they come with extended repayment terms of up to 10 years.
Kuflink
Kufllink came about in 2011 and opened up peer to peer lending in 2016. Investors have the select-invest option where they can choose the individual loans they wish to invest in, where it’s possible to withdraw funds early using the platform’s secondary market. Investors looking for an easier time can choose the auto-invest option, although manually selecting loans tends to offer higher interest rates. Those choosing the auto-invest option can also benefit from Kuflink’s peer to peer ISA option. All loans on Kuflink are secured by property, with loan terms ranging from three months to a year.
