British Business Bank to lend to small businesses via RateSetter
Partnership between government firm and P2P lender will see loans provided at commercial rates to stimulate economic growth
The government-owned British Business Bank has announced that it will begin lending to small and medium-sized businesses in the UK through peer-to-peer (P2P) lending platform RateSetter.
British Business Bank Investments (BBBI), the commercial arm of the British Business Bank has been lending to sole traders and partnerships since July 2014 – delivering almost 1,000 loans – but has now agreed to expand this to small businesses.
BBBI will lend on commercial terms at the same rates as all other investors, in a bid” to encourage lending to the real economy” and wants to reinforce the position of alternative finance such as P2P as an emerging competitor in the business finance landscape.
Launched in 2010, London-based RateSetter aims to provide P2P loans to businesses and individuals “within 48 hours”. The firm has seen a 60% year-on-year increase in small business lending during the last three months, with £8m of the £830m it has lent so far funded by BBBI.
Rhydian Lewis, RateSetter founder and CEO, said: “In recent years banks have pulled the shutters down firmly on lending to small businesses. RateSetter is helping to reverse that trend and our book of loans to small businesses is growing strongly – business loans make up £137m of our outstanding loan book.
“We are very pleased that our partnership with British Business Bank Investments Ltd has delivered finance for almost 1,000 creditworthy sole traders across the UK, and it is great news that this will now be extended to small businesses.”