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The Assetz Capital platform is no longer open to investment from individual investors. No new investments into peer-to-peer loans are possible and, as a result, no new funds should be deposited. The existing loan book relating to the Retail platform is now in run-off and this will, over time, deliver the return of capital to investors. Full information can be found here . Existing Retail lenders can still log in, view information regarding their account and loan holdings and operate their account in accordance with the information regarding the run-off provided on the link above. Please see this important message regarding the currency of the information on the pages on this website.

RBS will refer rejected corporate loan applications to peer-to-peer providers

Britain's biggest lender to small businesses, Royal Bank of Scotland ( RBS.L ), will start steering its rejected corporate loan applicants to alternative finance providers from next week, it said on Thursday.

RBS, which provides a third of all lending to small and medium sized enterprises in Britain, said it expects to advise thousands of businesses to contact peer-to-peer lenders Funding Circle and Assetz Capital. The scheme comes ahead of government plans to make such referrals compulsory after criticism that Britain's biggest banks are failing to provide sufficient credit to a sector the government sees as having an important role in stimulating the economy.

"A key part of our long-term economic plan is to ensure that British businesses are able to access the finance they need to grow and succeed," Britain's finance minister, George Osborne, said in a statement on Thursday.

Peer-to-peer lending has grown rapidly since the financial crisis of 2007 to 2009, with bank credit remaining scarce for small businesses. These new services allow investors to lend directly to individuals and businesses via low-cost online platforms.

The market for peer-to-peer lending in Britain totalled 1.7 billion pounds ($2.58 billion) last year, nearly half of which was business lending, according to a study by the University of Cambridge and charity NESTA.

RBS said that the peer-to-peer market contributes about 1 percent of total lending to small businesses, adding that such funding is growing by 200 percent a year. The RBS referral scheme will be piloted in Scotland and southwest England, starting next week, with the intention of expanding it nationally over the next three months. 

Funding Circle, which launched in 2010, is now the fourth-largest net lender to small businesses in Britain and has so far enabled more than 7,000 businesses to borrow 490 million pounds.

"Partnering with the UK's biggest small business high street lender is a huge vote of confidence in our model," its founder Samir Desai said.

Santander ( SAN.MC ) began a similar relationship with Funding Circle last year. ($1 = 0.6586 pounds) 

- January 29, 2015

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