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With the success of crowd funding and the growth of Peer to Peer lending players such as Zopa - giving SMEs the opportunity for new forms of finance the banks are waking up to the opportunity this platform may offer their customers.

With the success of crowd funding and the growth of Peer to Peer lending players such as Zopa - giving SMEs the opportunity for new forms of finance the banks are waking up to the opportunity this platform may offer their customers.

Banks whose application of tighter lending criteria over the last few years have forced SMEs to look elsewhere for funding which has seen the rise of Peer to Peer (P2P) companies.

P2P operations have hit the headlines with their alternative route to funding removing the banks and acting as the conduit between savers and borrowers.

Initially thought to be a short term P2P lending is growing stimulated by banks continuing unwillingness to relax their lending criteria and to make finance readily available to businesses.

Cash flow is key to any businesses economic success and banks need to relax their rules to encourage the economy to grow as it is the smaller SMEs that are driving the current economic success of the UK.

Banks may feel challenged by this new form of funding but there are signs that US banks are taking an interest with Global Investments, operated by hedge fund firm Marshall Wade, buying up loans on P2P platforms.

Crowd funding ventures have so far raised billions in capital for start-ups, small and medium-sized businesses and individual projects.

If banks moved in on this market this would give businesses an alternative route and access to more finance – but would UK banks have the confidence to take the plunge and accept the risk factor as part of this funding.

Applying their normal lending criteria would not work.

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