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<p>Alternative finance is a rapidly growing sector. Latest figures from the Peer-to-Peer
Finance Association (P2PFA) show that new SME loans originated by their members increased
by 89% year-on-year in the fourth quarter of 2015. Equity crowdfunded deal numbers
and investment totals have also been steadily rising. The British Business Bank is
an active participant in the sector and during the last 12 months has supported 3,301
businesses through the peer-to-peer platforms Funding Circle, RateSetter and Zopa.</p><p>A
key element in the growth of the UK alternative finance sector has been a regulatory
environment that supports innovation while protecting both investors and businesses.
In addition, government is bringing into effect provisions in the Small Business,
Enterprise and Employment Act 2015 which will require the largest banks - where they
decline lending requests from small business customers - to offer those customers
the opportunity for their details to be referred to a government-designated funding
platform. These platforms will help match SMEs with alternative finance providers
and will be brought into operation later this year.</p><p> </p>
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