Handshake
Media playback is unsupported on your device
Video

Peer lending: the answer for cash strapped small firms?

As the amount UK banks lend continues to fall, more businesses are turning to peer to peer lenders to get cash.

They connect savers directly with companies that need a loan - essentially cutting out the need for banks. But are there risks involved?

James Meekings is founder of Funding Circle, one of the biggest peer lenders in the country. From today it will offer sole traders - like lawyers, farms, and doctors - the opportunity to apply for finance.

He told BBC Radio 5 live's Wake Up to Money, "You get the benefit of local money staying in the area... and people get to know local businesses."

Go to next video: Bank lending continues to fall