Peer-to-Peer Business Lending: Where Did the Platforms Go?

Between 2020 and 2022, the UK’s peer-to-peer business lending market lost most of its biggest names. Funding Circle closed its retail investor platform in March 2022. Assetz Capital followed in December 2022. Zopa pivoted to become a bank in 2021. RateSetter was absorbed by Metro Bank a year earlier.

The P2P Finance Association, the industry’s own trade body, subsequently disbanded. We mapped the full exit timeline so you can see exactly what changed and when.

If you searched for a P2P business loan in 2019 and found five or six credible platforms to compare, you’ll find a very different picture today. Some of those names still appear in search results. Funding Circle is still lending to businesses. But the underlying structure has changed entirely.

It’s no longer a crowd of retail investors funding your loan. It’s an institutional balance sheet.

Where should you start?

What Peer-to-Peer Business Lending Was and How It Worked

The original P2P model connected individual investors with business borrowers directly via an online platform. The platform handled underwriting, matched borrower risk profiles to investors, and managed repayments. But the investor held the credit risk, not the platform. If a borrower defaulted, the investor lost money.

For investors in a near-zero interest rate environment, this was attractive. Returns of 5–9% p.a. compared well to savings accounts paying fractions of a percent.

For borrowers, the draw was speed and accessibility: decisions in days rather than weeks, and credit appetite that reached businesses high-street banks declined.

The Innovative Finance ISA (IFISA) wrapper, introduced in 2016, made P2P returns tax-efficient for investors. If you held loans inside an IFISA, the interest was sheltered from income tax.

At its peak, the sector had significant scale. We verified: Funding Circle alone had funded over £10bn to UK businesses via retail investors (Funding Circle investor relations, 2022).

The Contraction: Why Most P2P Business Lenders Closed or Changed

The exits weren’t a single event. They came in waves, driven by a combination of factors — and if you’re wondering why so many platforms you remember have disappeared, the reasons sit across regulation, rates, and economics.

Regulatory pressure. The FCA’s PS19/14 rules came into force in 2020 and raised the compliance burden for retail P2P platforms. If you invested after that point, you’ll have encountered the appropriateness tests these rules required.

For platforms with thin retail margins, the ongoing compliance cost was hard to absorb. That’s not a policy critique — it’s the economic reality of managing a retail lending platform.

The interest rate shift. As rates rose from 2022, the yield gap that made P2P attractive narrowed sharply. By late 2022, fixed-rate savings accounts were approaching 4–5%. The extra return P2P offered no longer looked compelling if you could get 4% with full FSCS protection on a bank deposit.

Institutional capital proved easier to scale. Retail investor pools are operationally complex: onboarding, ISA administration, investor relations, diversification management. Institutional capital is larger, more predictable, and cheaper to manage. Once platforms demonstrated creditworthy loan books, the case for retail investor pools weakened.

COVID-era credit losses. During 2020–2021, a wave of SME defaults exposed the mismatch between retail investor expectations and business credit risk. Some platforms saw loan books deteriorate faster than their published risk models had implied.

Funding Circle (March 2022), Assetz Capital (December 2022), Zopa (December 2021), and RateSetter (2020) all exited the retail investor marketplace. ThinCats was subsequently acquired by Shawbrook Bank, completing in September 2025 (Shawbrook Group RNS announcement, September 2025).

We tracked all the exits. The P2P Finance Association disbanding was the clearest signal: the sector had lost its distinct identity.

Which Peer-to-Peer Business Lending Platforms Are Still Active in 2026?

Two FCA-authorised retail P2P platforms remain active in the business lending space. Both are property-secured. Neither offers the unsecured working capital loans the sector provided at its peak.

Folk2Folk: Property-Secured P2P for UK Businesses

Folk2Folk claims to be the UK’s largest retail P2P business lender still operating in this model. It connects individual investors with UK businesses that own land or property and need secured borrowing.

For investors

Folk2Folk investors currently receive a fixed return of 8.5–8.75% p.a., paid monthly (Folk2Folk, May 2026). The IFISA wrapper is available for the 2025/26 tax year, making returns tax-free within the annual allowance. Minimum investment is £20,000.

You must be a UK tax resident aged 18 or over and pass Folk2Folk’s Investor Appropriateness Test before your money is deployed. A secondary market exists and may allow you to exit early, though this isn’t guaranteed. Capital is at risk and not FSCS-protected.

For borrowers

Loans start at £100,000, secured by a first charge on UK land or property (not your primary residence). Maximum loan-to-value is 60%. Interest-only terms are available. Folk2Folk lends into specific sectors: rural and agricultural businesses, hospitality and leisure, renewables, and property.

Folk2Folk doesn’t publish a standard borrower rate. Your total cost includes the investor interest rate (currently around 8.5% p.a.) plus Folk2Folk’s arrangement fee, potential ongoing administration fees, and third-party legal and Land Registry fees.

Because pricing is bespoke, you need to request a direct quote to get an APRC. When comparing Folk2Folk against other secured products, compare total cost of borrowing, not headline rates.

We rate Folk2Folk as the only FCA-regulated retail P2P route for UK rural and agricultural businesses that need secured borrowing in the £100,000–£500,000 range with non-residential property as security. It isn’t a working capital or unsecured lending product.

CrowdProperty: P2P for Property Development Finance

CrowdProperty (FCA authorisation no. 723959) is an FCA-regulated P2P platform focused on property development loans. It has funded over £832m in projects since launch and offers an IFISA wrapper. As of May 2026, it is fully authorised with no FCA restriction notices.

The platform went through a leadership change in January 2025. Capital is at risk and not FSCS-protected.

CrowdProperty promotes a “perfect, 100% capital and interest payback track record” on its website. That claim dates from late 2020.

The platform itself labels its loans as high-risk investments — a categorisation required by FCA rules on P2P platforms. Both facts matter when assessing it.

The platform doesn’t publish aggregate lending rates or delinquency statistics for its live loan book. We note this limits independent performance verification beyond the platform’s own marketing claims.

Before investing, review the platform’s resolution plan, confirm your eligibility under the FCA’s appropriateness requirements, and check the FCA register for any new notices (register.fca.org.uk). CrowdProperty is a specialist property development lender. It isn’t relevant to trading businesses seeking operational capital.

Note: the 100% payback claim refers to completed projects only. Projects in an active default or workout phase are not “completed” for this purpose, and the claim dates from late 2020.

CrowdProperty itself categorises its loans as high-risk. Ask the platform directly for the current status of its live loan book before committing capital.

Kuflink: Still Authorised, but Severely Restricted

Kuflink Ltd (FRN 724890) remains FCA-authorised to operate an electronic system in relation to lending, but it isn’t a viable platform for new business. The FCA issued restriction notices in August and November 2025 requiring Kuflink to stop onboarding new retail investors.

As of May 2026, Kuflink must obtain written FCA permission before taking on new lenders. Its auto-lend accounts are closed to new money. Connected entities (Kuflink Bridging Limited and Kuflink Landlord Limited) are no longer FCA-authorised.

Kuflink is winding down its retail investor activity. It shouldn’t be treated as an active option. Always verify current status on the FCA register at register.fca.org.uk before engaging with any platform.

The Institutional Alternative: Where P2P Borrowers Go Now

The borrowing need P2P used to serve hasn’t disappeared. The difference is where the money comes from and what that means for you as a borrower.

We covered each platform individually so you can compare the borrower experience against what P2P used to offer.

Funding Circle: Institutional Capital, Same SME Focus

Funding Circle permanently closed its retail P2P investor platform in March 2022. It continues to lend to UK small businesses using institutional capital, including a £300m partnership with Barclays Bank and TPG Angelo Gordon (February 2024).

For you as a borrower, the practical change is limited. We checked the current product against the pre-2022 P2P version: the borrower experience is largely unchanged. Funding Circle still offers:

• Business loans from £10,000 to £750,000
• Terms up to 6 years
• Rates from 6.9% per year (Funding Circle, May 2026)
• A one-off completion fee of 1.5–6% of the loan value, variable by risk assessment. A typical fee is around 3.5%, per Funding Circle’s 2026 introducer documentation. This fee is added to your loan balance on acceptance, and there’s no early repayment charge.
• Government-backed Growth Guarantee Scheme (GGS) loans from 13.4% per year (Funding Circle, May 2026)
• FlexiPay line of credit at 0% interest, with transaction fees from 1.99%

Eligibility: standard business loans and FlexiPay

Minimum 1 year’s trading. Sole traders, partnerships, LLPs, and limited companies are all eligible.

Funding Circle doesn’t publish a strict minimum annual turnover. The eligibility process focuses on your trading history and overall business performance. A personal guarantee may be required. You can check indicative eligibility in around 30 seconds without a hard credit search.

Eligibility: Growth Guarantee Scheme (GGS) loans

GGS eligibility is more restrictive. To qualify via Funding Circle your business must:

• Be a limited company or LLP (sole traders and partnerships are not eligible for GGS)
• Have been actively trading in the UK for a minimum of 2 years
• Have annual turnover below £30m
• Be viable and not in collective insolvency proceedings
• Use the loan for a business purpose (growth, investment, or working capital)

GGS loan amounts go up to £2m, over terms of 6 months to 6 years. Personal guarantees are not required for loans of £250,000 or less; they may be required for higher amounts.

The GGS is the current active government-backed scheme for UK SMEs, succeeding the Recovery Loan Scheme (RLS) and earlier Covid-era programmes. GGS active status confirmed May 2026.

If you previously took out a CBILS, BBLS, or RLS loan, you’re still eligible for GGS. A single 7-minute application checks eligibility for both GGS and standard loans. (Funding Circle, May 2026)

Funding Circle no longer publishes a retail loan book with default rate data since exiting the retail P2P model. We reviewed the FY2024 results: £1,899m in credit extended and a first full-year profit of £3.4m before exceptionals (Funding Circle plc, Full Year Results 2024).

No credit loss rates are publicly disclosed.

What Funding Circle is now: a fast-approval alternative lender with institutional backing. It isn’t P2P in structure, but it occupies the same borrowing category.

iwoca and Other Fast-Approval Lenders

iwoca isn’t, and has never been, a peer-to-peer lender. Its own website explicitly describes it as “your flexible alternative to peer-to-peer loans.” It’s included here because it operates in the same borrower segment: UK SMEs seeking faster, more flexible access to capital than high-street banks offer.

iwoca’s representative APR is 49% (3.33% per 30 days) (iwoca.co.uk, May 2026). Loan amounts range from £1,000 to £1,000,000, over terms of 1 to 5 years.

A drawdown fee applies for longer terms: 5% for 13–24 months and 6% beyond 24 months (iwoca.co.uk, May 2026; verify before applying). Borrowing example: £10,000 over 12 months totals £12,294 in repayments.

We note: that 49% representative APR reflects the profile of a short-term, unsecured SME lender operating across a wide risk spectrum. It isn’t directly comparable to a 6.9% Funding Circle rate, which is a risk-adjusted quote given after full underwriting.

Compare total cost of borrowing across similar terms. Headline rates in isolation mislead.

Sole trader eligibility

iwoca’s documentation is contradictory. Some pages state you must be a limited company or partnership; others (including the Flexi-Loan product guide) indicate sole traders can apply by providing personal bank statements and a self-assessment tax return.

If you’re a sole trader, the practical route is to apply online. The automated process determines Flexi-Loan eligibility without a hard credit check at the initial stage. Typical criteria: minimum 6–12 months’ trading, annual turnover of at least £10,000–£20,000, UK-based business.

ThinCats: Now Part of Shawbrook Bank

ThinCats moved to institutional funding before being acquired by Shawbrook Bank, completing in September 2025 (Shawbrook Group RNS announcement, September 2025). FY2025 originations reached £381m with assets under management approaching £1bn (ThinCats, 2025).

ThinCats isn’t relevant to small businesses seeking sub-£500,000 loans. It sits in the mid-market and is relevant to established businesses with borrowing needs at the larger end of the SME spectrum.

Risks, Protections and What FSCS Does (and Doesn’t) Cover

Is Peer-to-Peer Lending Covered by the FSCS?

No. Peer-to-peer lending investments aren’t covered by the Financial Services Compensation Scheme (FSCS), and this hasn’t changed. We verified this position against FCA guidance and the December 2025 FSCS discussion paper.

The FSCS deposit protection limit increased from £85,000 to £120,000 on 1 December 2025. This increase applies to bank deposits only. It doesn’t extend to P2P investments, lending platforms, or any investment product.

If you’re a Folk2Folk investor and a borrower defaults, you have no FSCS recourse. We checked the FCA’s December 2025 discussion paper: no changes to P2P FSCS coverage were announced. The limit increase is deposit-specific.

What does partially protect P2P investors:

• FCA Consumer Duty (effective July 2023): Requires platforms to act in your interests, ensure products are fit for purpose, and provide clear disclosures. This is a conduct obligation on the platform, not a compensation guarantee.
• FCA PS19/14 appropriateness requirements (in force 2020): Platforms must verify that you understand the risks before accepting your investment, including that your capital is at risk and there’s no FSCS protection.
• Property security (Folk2Folk and CrowdProperty): Both platforms secure loans against real assets. In the event of borrower default, the platform pursues recovery against the property. This provides some recourse, but recovery isn’t guaranteed, isn’t immediate, and depends on property market conditions and legal process. CrowdProperty promotes a 100% payback track record on completed projects (a claim from late 2020); the platform also labels its own loans as high-risk. Live loan book performance data isn’t publicly published.

Platform Failure Risk and What Happens to Your Loan

If a P2P platform fails while you have active investments, your loan doesn’t automatically disappear. But the outcome depends on the platform’s wind-down arrangements.

FCA rules require P2P platforms to maintain a resolution plan, including arrangements with a backup loan servicer if the platform ceases to operate. This transition isn’t smooth.

You may face delays in receiving repayments. Costs associated with the wind-down may be deducted from returns.

The Kuflink situation illustrates what a restricted-but-still-authorised platform looks like: existing loan books continuing under restrictions, new activity frozen, regulatory oversight tightened.

If you’re already invested in a platform facing regulatory action, the practical steps are: check the FCA register for restriction notices (register.fca.org.uk); identify the backup servicer named in the platform’s resolution plan and contact them directly.

If the platform has entered administration, check Companies House and the FCA’s website for the administrator managing the loan book. The FCA consumer helpline (0800 111 6768) can confirm whether a platform is still authorised.

Before investing in any P2P platform, review its resolution plan and understand who the backup servicer is. We recommend doing this before you commit capital, not after.

Personal Guarantees and Rate Transparency

Many business loans described as “unsecured” (including some P2P and alternative lending products) include a personal guarantee clause in the standard terms. A personal guarantee makes you personally liable for the debt if the business defaults. We see this misunderstood regularly: “unsecured” describes the security structure, not the personal exposure.

Read the full terms before signing. Take legal advice if the guarantee terms are unclear.

The rate advertised by any lender is a representative figure: the rate given to a majority of accepted applicants. Your actual rate is set after the lender reviews your business, credit profile, and loan structure.

Get an indicative quote before a hard credit search. Hard credit searches leave a footprint; applying to multiple lenders without checking their likely rate first can compound this.

Is Peer-to-Peer Business Lending Right for Your Business?

Who It Works For

Folk2Folk is worth exploring if you:

• Own non-residential UK land or property you can offer as security
• Need £100,000 or more
• Run a business in rural, agricultural, hospitality, leisure, renewables, or property sectors
• Can accept an interest-only loan structure
• Need a tailored, relationship-based borrowing arrangement

Funding Circle is worth exploring if you:

• Have been trading for at least 1 year
• Need £10,000–£750,000 as a term loan
• Want a fast decision with a transparent rate quoted upfront
• Can factor the one-off completion fee (typically around 3.5%) into your borrowing cost

CrowdProperty is relevant only if you’re a property developer. FCA-authorised (FRN 723959) with no current restrictions. The platform promotes a 100% payback track record on completed projects (claim from late 2020) and labels its own loans as high-risk. Ask the platform for current live loan book status before committing capital.

Who It Doesn’t Work For

Pre-revenue startups. Folk2Folk has a property security requirement; Funding Circle requires 1 year’s trading. If your business is in its first year, neither is a viable option.

Businesses needing a revolving facility. If you need the flexibility to draw down and repay repeatedly, these fixed-term products won’t serve you. They don’t replace an overdraft or revolving credit facility.

Distressed businesses. P2P platforms and alternative lenders price elevated risk into the rate or decline. These products aren’t rescue finance, and if your business is in active financial distress, you’re unlikely to get terms that work.

Businesses expecting bank-equivalent rates without strong credit. Funding Circle’s 6.9% headline rate is available to well-qualified borrowers. If your credit history or trading record is mixed, your actual rate may be materially higher. Factor in the 1.5–6% completion fee from the start.

Quick Eligibility Check

Before approaching any platform in this category, confirm the basics. We built this checklist from the common eligibility failures we see:

• Minimum 12 months’ trading (24 months for GGS loans or some platforms — confirm before applying)
• UK-registered business
• No active county court judgments (resolved CCJs may be acceptable — check with the lender)
• No current insolvency proceedings
• For Folk2Folk specifically: non-residential UK property available as security, with sufficient equity for 60% LTV

Peer-to-Peer Lending Alternatives and Next Steps

If P2P and alternative lending isn’t the right fit, the most relevant alternatives depend on the underlying problem. We mapped each alternative to the scenario it actually solves:

Cash flow gap from slow-paying customers. Invoice finance releases the value of your unpaid invoices without waiting for customers to pay. It directly addresses debtor-driven working capital pressure and isn’t a term loan product.

Equipment or vehicle purchase. Asset finance secures the loan against the asset itself, which typically produces a lower rate than an unsecured term loan and doesn’t require you to offer property as security.

Property-backed borrowing above Folk2Folk’s scope. A commercial mortgage or development finance product may be more appropriate for larger property-secured needs. A commercial mortgage broker can access the wider market.

Variable or seasonal revenue. Revenue-based finance ties repayments to a percentage of your monthly revenue rather than a fixed amount. This suits businesses where fixed monthly repayments create cash flow risk.

More time, cleaner credit. For creditworthy businesses with a clean trading history and time to spare, a high-street or challenger bank term loan typically offers lower rates than alternative lenders. The trade-off is a longer application process and less flexible eligibility.

The Bottom Line on P2P Business Lending in 2026

Peer-to-peer business lending, in the original sense of retail investors funding your loan through an online marketplace, is largely gone.

If you need secured borrowing of £100,000+ and own rural or agricultural property, Folk2Folk remains a genuine option. If you need £10,000–£750,000 quickly and have been trading for a year, Funding Circle still lends.

For everything else — working capital, unsecured lending under £100,000, revolving facilities — the alternatives section above maps the right product to the right problem.

We’d put it plainly: the category has evolved. Start with the problem you’re solving, not with a platform name you remember from 2018.

Peer-to-Peer Business Lending FAQs

Methodology and Disclosure