Small business – not consumer – is driving Alternative Finance
The NESTA study has a wealth of data about UK Alternative Finance, but one fact jumps off the page
“It’s about small business, stupid!
First, the whole market is big and growing fast (all numbers in GBP millions):
2012: 267m
2013: 666m
2014: 1,740m
That 2014 total is $2.7 billion – to make it real for American readers.
That is more than doubling every year! Those are growth rates to go after.
That is not really news.
What is news is that a couple of areas that are “hot” and get a lot of attention are small:
Rewards crowdfunding: 26m (1.4%)
Equity crowdfunding: 84m (4.8%)
The big news is when you add up the two segments that offer lending to small business:
P2P Business Lending: 749m
Invoice Trading: 270m
Total Small Business Lending = 1,019m
Total Consumer Lending = 547m
Small business lending is almost twice as big as consumer lending.
The story across the pond is similar. Lending Club sounds like a consumer lending venture but the bulk of the revenue is coming from small business and OnDeck is headed to IPO based entirely on demand from small business.
