Peer-to-peer lending matches companies that want to borrow with people willing to lend, through an FCA-authorised platform. Most UK platforms have closed to individual investors since 2022, so a limited company has fewer genuine peer-to-peer options than it did – and the ones left mostly lend against property.

More than seven in ten (71%) brokers agree that mainstream banks are pulling back from small business lending, according to iwoca's SME Expert Index in August 2025. That is why more directors look at non-bank options like peer-to-peer lending in the first place.

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What peer-to-peer lending is

Peer-to-peer lending is a way for a company to borrow from individual investors through an online platform instead of a bank. You may also see it called peer-to-business lending, crowdlending, or marketplace lending.

HMRC describes it as a 'many to many' lending model run through internet intermediaries: the platform puts lenders who have money in touch with borrowers who want it. Your loan is usually funded by lots of people contributing small amounts, rather than by one institution.

From your side, it behaves like any other loan. The platform assesses your company, sets a rate, collects a single monthly payment, and passes the interest and capital back to the lenders. You don't meet them, negotiate with them, or owe them individually.

Peer-to-peer lending is one corner of alternative business funding, the wider market of non-bank options that also includes invoice finance, asset finance, and a small business loan from a direct lender.

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What changed: most UK platforms no longer take money from individual investors

The British Business Bank reported in March 2026 that lenders leaving the market have 'virtually ended the peer-to-peer model'. Non-bank lending to small companies kept growing over the same period. It just stopped coming from individual investors.

The platforms a director is most likely to recognise have all stepped away from retail money:

• Funding Circle closed to individual investors on 10 March 2022. Its own investor page says the decision was permanent and that 'all new lending will be funded through institutional lenders'. It still lends to companies, but it is no longer peer-to-peer.
• Assetz Capital states on its retail platform that it 'is no longer open to investment from individual investors' and that the retail loan book is in run-off. It now lends against property.
• LendingCrowd still lends to businesses, but its website no longer offers new retail investing or describes itself as peer-to-peer.

What replaced that money was institutional funding, and there is more of it than before. Lending from non-bank lenders to small businesses reached a series high in 2025, even as the peer-to-peer model behind some of it disappeared.

Source: British Business Bank, Small Business Finance Markets 2025/26, published March 2026.

The same report notes that Funding Circle alone accounted for just over half of all business originations the British Business Bank tracks. So a market that looks varied from the outside leans heavily on a small number of lenders, and the money behind them is mostly institutional.

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Which platforms still lend to UK limited companies

Three platforms still fund company loans wholly or partly with money from individual investors: CrowdProperty, Folk2Folk, and rebuildingsociety.com. Two of the three lend only against property. Every figure below comes from the platform's own website, checked on 13 October 2026.

For a trading company that wants working capital rather than a property deal, that list is short. CrowdProperty lends only to property developers. Folk2Folk needs UK land or property as security, which makes its loans secured business loans rather than the unsecured kind most directors are looking for. On that basis, rebuildingsociety.com is the main remaining option for an unsecured peer-to-peer business loan.

Two other platforms you may come across don't lend to limited companies at all: The Money Platform lends to individuals, and Kuflink arranges property-backed bridging finance. Before you apply anywhere, look the firm up on the Financial Services Register and check what it is authorised to do.

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How a peer-to-peer business loan works

You apply to the platform, it credit-checks your company and prices the loan, then funds it from its investors and collects one monthly payment from you. You never deal with the individual lenders.

The steps are much the same across platforms:

1. Apply online with your company number, how much you want, and what it's for.
2. Share your financial position, usually by connecting your business bank account or uploading recent statements, filed accounts, and management accounts for larger amounts.
3. Wait while the platform runs credit and identity checks on the company and its directors, then grades the risk.
4. Review the offer, which will set out the rate, the term, and any arrangement or completion fee.
5. Sign the loan agreement and any security documents, including a personal guarantee if one is asked for.
6. Draw down the money and start repaying, usually monthly by direct debit.

How long that takes depends on the security involved. An unsecured loan can complete in days once the platform has what it needs. Anything secured on property takes longer, because a valuation and legal work have to happen first.

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What platforms check before they lend

Platforms run full credit checks and want a trading record, so peer-to-peer lending is not a way round a declined bank application. LendingCrowd, for example, publishes four criteria: a limited company, based in England, Scotland or Wales, two years' trading history, and turnover of at least £100,000.

Expect most platforms to look at:

• Your company's filed accounts and how long it has been trading
• Your business credit file, and often the directors' personal credit files
• Recent bank statements or Open Banking data, to see how money actually moves
• Any county court judgments, insolvency markers, or late filings at Companies House
• The sector you trade in, since some are excluded

If your credit file is the thing you're worried about, it's worth knowing what a lender sees before you apply anywhere. iwoca Credit Compass is a free tool that shows your Equifax business credit score alongside four other scores, the factors affecting them, and areas to work on. There is also plenty you can do to build your business credit score over a few months.

Applying itself needn't hurt your file. At iwoca, checking your eligibility is a soft check only; a hard check happens if you take the loan, and that one shows on your credit file. Ask any platform which kind of search it runs before you submit, because several formal applications in a short space of time can count against you.

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What a peer-to-peer business loan costs

Published rates on the platforms still lending to companies start at about 6% a year, and most charge an arrangement or completion fee on top. The fee usually comes out of the money you draw down, so compare the total cost of borrowing rather than the headline rate.

Of the platforms above, rebuildingsociety.com publishes rates from 6% a year and Funding Circle from 6.9% a year plus a one-off completion fee. Folk2Folk, LendingCrowd, and CrowdProperty don't publish a borrower rate at all, so you'll only find out what your company would pay by applying.

Two things are worth checking in any offer. The first is whether the rate is fixed or variable, because a variable rate on a five-year loan can move a long way. The second is what happens if you repay early: some lenders charge nothing, while others set a minimum interest commitment, which can wipe out the saving. Our business loan calculator will give you a sense of the repayments on a given amount and term before you talk to anyone.

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What a director signs: personal guarantees and charges

Most platforms ask a director for a personal guarantee, which puts your own money behind the company's loan. Many also register a charge over company assets at Companies House, even on a loan described as unsecured.

A personal guarantee is a legal commitment by you, as an individual, to repay the loan if the company can't. It sits outside your company's limited liability, which is the point of it from the lender's side. It is a normal part of small business lending rather than a warning sign, but it deserves a careful read, and it's reasonable to ask whether the guarantee can be capped at a set amount.

A charge or debenture is different: it gives the lender a claim over company assets. Two things follow from one being registered. Any new lender will see it, which can affect what you can borrow next. And if you already have an overdraft or an invoice finance facility, that agreement may require your existing lender's consent before you take on more secured borrowing.

Worth doing before you sign: take independent legal advice on a personal guarantee, and check what security the platform intends to register.

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Where peer-to-peer lending works for a company, and where it doesn't

Peer-to-peer lending suits an established company that wants a fixed-term loan faster than a bank will write one, and it suits property projects best of all. It works less well for small amounts, for young companies, and for anything that needs to happen this week.

It tends to work when:

• You want £25,000 or more, which is where the surviving platforms start.
• Your company has two or more years of filed accounts and steady turnover.
• You have UK land or property to offer as security, which opens up more of the market.
• You're funding a defined project with a clear end date, such as a development or a refurbishment.
• You want a fixed rate and a fixed term you can plan around.

It tends not to work when:

• You need less than £25,000, which most platforms won't write.
• Your company is a start-up or has under two years of trading history.
• Your credit file has recent problems, since platforms grade risk much as a bank does.
• You need the money in days and have property as the only security on offer.
• You want to draw down and repay repeatedly rather than take one lump sum, which is closer to what an unsecured business loan from a direct lender can do.

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The risks, and what FCA authorisation does not cover

Peer-to-peer loans can default, and the FCA calls loan-based crowdfunding a high-risk investment with no access to the Financial Services Compensation Scheme. Platforms must be FCA-authorised, but that authorisation mainly protects the people lending the money.

The FCA's guidance on understanding crowdfunding puts it plainly: 'Loan-based (peer to peer) or investment-based crowdfunding are high-risk investments, and you won't have access to the Financial Services Compensation Scheme (FSCS).' Funding Circle says the same thing in its own footer. If you lend money this way, you can lose it, and the FCA warns you 'may not be able to get your money back quickly, or at all should you need it'.

For a borrower, the risks are more ordinary but still real. Missing payments damages your company's credit file and, where a personal guarantee is in place, reaches you personally. Platform fees can make a low advertised rate expensive. And if a platform stops trading, your company's obligation to repay doesn't go anywhere: FCA rules tightened the requirements for platform wind-down plans in December 2019, so repayments carry on to whoever administers the loan book.

There's one point about regulation worth being precise on, because it's easy to misread. A platform must be FCA-authorised for 'operating an electronic system in relation to lending'. That authorisation governs how the platform behaves, particularly towards investors. The loan to your company usually isn't a regulated credit agreement, because consumer credit rules protect individuals and small unincorporated businesses rather than limited companies. The same is true of iwoca's lending to limited companies, and of a high street bank's. It doesn't make any of it unsafe. It does mean the protections you might assume as a consumer aren't the ones that apply, so the agreement itself is what matters.

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Peer-to-peer lending compared with crowdfunding

Peer-to-peer lending is borrowing: you repay the money with interest and keep full ownership of your company. Crowdfunding usually means giving away equity or offering rewards instead, so the people backing you take a stake or a product rather than repayments.

The words get mixed up partly because the regulator groups them. The FCA treats loan-based peer-to-peer lending as one of four kinds of crowdfunding, alongside investment-based, donation-based, and rewards-based. Only the first two are FCA-regulated. In its words, investment-based crowdfunding lets someone 'invest in a business by buying shares or investing in business-backed loans', while loan-based crowdfunding means they 'lend money to a borrower and receive repayments over time, usually with interest'.

For a director, the practical difference is what you give up. A loan costs you interest and leaves the share register alone. Equity crowdfunding costs you part of the company and, often, a say in how it's run.

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Other ways a limited company can borrow

If no platform fits, the usual alternatives are a business loan from a non-bank lender, invoice finance, asset finance, or a bank loan backed by the Growth Guarantee Scheme. Which one fits depends on what the money is for and when it comes back.

• A business loan from a non-bank lender. A fixed amount over a fixed term, usually unsecured, with a decision in days rather than weeks.
• Invoice finance. Money against invoices you've already raised, which suits a company whose cash is tied up in long customer payment terms.
• Asset finance. Funding secured on the equipment or vehicle you're buying, which can reduce the security a lender needs elsewhere.
• A Growth Guarantee Scheme loan. A government-backed guarantee to the lender, which can help a company that falls just outside standard criteria. Funding Circle is among the accredited lenders.
• A high street bank loan. Often the cheapest option if your company fits the criteria and you can wait.

Brokers have been steering larger borrowing away from banks. Over two thirds (67%) of finance brokers now recommend alternative lenders to their small business clients for loan applications over £100,000, compared with just 6% who recommend high street banks, according to iwoca's SME Expert Index in May 2025.

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Where an iwoca business loan fits, and why it isn't peer-to-peer

iwoca isn't a peer-to-peer lender: it lends its own money, financed by institutional investors rather than individual savers. What it shares with a platform is the job most directors are actually trying to do, which is covering a gap between money going out and money coming in.

That gap is the reason most companies borrow at all. Managing cash flow is now the top reason for small business loan applications, cited by 61% of brokers in iwoca's SME Expert Index. It usually looks like one of a handful of situations: an invoice that won't be paid for two months when your own suppliers want paying in 30 days; a VAT or corporation tax bill landing in the same month as payroll; stock you need to buy in September to sell in December; a deposit on a van or a machine that won't earn anything until it's on the road.

Guy Walker runs Dovetail and Slate, a recruitment company that pays its staff weekly while its clients pay on 30-day terms or longer. He describes the pressure this way:

'Finance and cash flow have consistently been my greatest challenge. I look at the cash flow before I look at the balance sheet or the P&L. Every single night.'

An iwoca Flexi-Loan is a business loan with flexible repayment options, and it's built for that shape of problem rather than for a five-year project. You borrow what you need to cover the gap, you pay interest only on the outstanding balance for the days you're actually using the money, and there's no fee for repaying early. So if the invoice lands sooner than expected, clearing the loan costs you less.

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If you want to lend money through a platform

Lending your own money through a platform is an investment, not a savings account. Your capital is at risk, borrowers can default, and the returns platforms advertise are not guaranteed. Several platforms also warn that you may not be able to sell your loans on quickly if you want your money back.

Of the platforms above, CrowdProperty, Folk2Folk, and rebuildingsociety.com still take money from individuals, each with its own minimum, and several offer an Innovative Finance ISA. Anyone considering it should read the FCA's guidance on crowdfunding, check the firm on the Financial Services Register, and think about independent financial advice first.

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Frequently asked questions

A few shorter questions come up often enough to be worth answering on their own.

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Is peer-to-peer lending legal in the UK?

Peer-to-peer lending is legal in the UK, and the platforms that arrange it must be authorised by the FCA for 'operating an electronic system in relation to lending'. You can confirm any firm's authorisation and what it covers on the Financial Services Register.

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Do you pay tax on peer-to-peer lending?

Interest you receive from peer-to-peer loans is taxable in the same way as any other interest received, according to HMRC's guidance on peer to peer lending. The same guidance covers how a lender can claim relief on a loan that isn't repaid.

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Can a company deduct the interest against corporation tax?

Interest on money a company borrows for the purposes of its trade is generally deductible under HMRC's loan-relationship rules, whoever lent it.

HMRC's Corporate Finance Manual says a company has a trading loan relationship as a borrower 'if it entered into the loan relationship because of its trade'. Arrangement fees and how the money is used can change the picture, so ask your accountant how it applies to your accounts.

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What happens if a peer-to-peer platform stops trading?

Your company still owes the money. FCA rules strengthened the requirements for platform wind-down plans in December 2019, and repayments carry on to whoever takes over administering the loan book.

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Can a start-up get a peer-to-peer business loan?

Start-ups rarely qualify. The platforms still lending to companies ask for a trading record, and LendingCrowd publishes a two-year minimum, so a company in its first year or two is usually better off looking at a direct lender, a Start Up Loan, or asset finance.