Zopa, the UK’s largest peer-to-peer lender, has been granted £10m from the government to lend to sole traders.
This is part of £55m worth of Government funding, through a scheme called the Business Finance Partnership, to help small businesses. The loans will be arranged through Zopa and other peer-to-peer lenders and finance suppliers over coming years.
Giles Andrews, co-founder and CEO of Zopa, said: “We are delighted to be included in this scheme and pleased that the Government has recognised that there are alternatives to the traditional financial institutions that work.
“We hope that the additional money being lent through Zopa will help thousands of sole traders to further their business and help build the economy. With over 3.5 million sole traders in the UK at the moment, one of the backbones of the economy, it is a vital sector that has felt the effects of the banks’ reluctance to lend money.”
Zopa arranges loans between creditworthy borrowers and savvy savers looking to get higher, inflation beating returns.
It was the first peer-to-peer lending platform anywhere in the world when it launched in March 2005 and has since arranged more than £250 million of peer-to-peer loans, all at rates effectively agreed between savers and borrowers.
Earlier this week, Zopa confirmed it had secured additional investment from ‘Augmentum Capital, the technology fund backed by Lord Rothschild’s RIT Capital and welcomed news from the Government that the peer-to-peer lending sector is to get its wish to become formally regulated by the FCA.