Statistics released by two of the main alternative peer to peer lenders suggest that the market is attaining a certain degree of respectability.

In the first instance, MarketIinvoice, an online platform which enables companies to secure borrowing on individual invoices (ie selective invoice discounting), has recently celebrated the landmark of having lend more than £250m since its inception.

The second announcement involved Funding Circle, which is an Internet based peer-to-peer lender, reporting that they have lent approximately £50m in the second quarter and £73m in the third quarter of this year.  As their website indicates, they have lent some £387m since they started, so it is clear that MarketInvoice have a little way to go to catch them, even if they appear to be growing faster at the moment!

The important issue which comes out of these facts is that the alternative lending market is becoming rapidly more mature.  Its acceptance into respectability is indicated by the fact that Santander Bank now directs any clients who have failed in their borrowing application to Funding Circle as an alternative.  In addition, Funding Circle will be channelling government funds to their clients in future, as some £40m is being made available by the British Business Bank.  It is also encouraging to note that they are lending to small house builders which have struggled to to get funding from conventional sources in recent years.  Stimulus of the building industry and provision of much needed housing can only be good for the economy.

In another positive move on the other side of the Atlantic, a peer-to-peer lender called Lending Club is in the process of a flotation which on the basis of initial reaction looks as if it should be successful.  A good valuation for this will undoubtedly encourage our own City to give greater support to alternative lenders in the UK – even if only in the expectation of rewards for themselves!

At a time when some of the main clearing banks are announcing positive moves in respect of small business lending – notably NatWest and RBS – the environment for borrowing is starting to look distinctly more rosy.