Since 2011 the peer to peer (P2P) lending sector has grown significantly and as of April 2014, roughly £1 billion has been injected into it which has made its way to SME businesses seeking funding for expansion.

One finance firm that has been working with MGI members to help facilitate P2P loans is West Midlands-based Ludgate Finance.

Ludgate Finance work with a variety of different lending platforms and in the first quarter of 2014 completed 24 deals raising £4.7million of funds working with five platforms. This takes Ludgate’s total funds raised in the sector to just under £25 million spread across 123 deals.

Among the deals that Ludgate have helped conclude with MGI firms includes a £150,000 loan for Harrison Beale & Owen (HB&O) clients Darren and Katrina Young to help them take over their family gym business.

The loan, secured through the ThinCats peer to peer lending network, has enabled Darren and Katrina to take over the ownership of Iron Works Fitness Concepts in Birmingham from Darren’s parents Bob and Monica Young.

Darren plans to boost the gym’s legacy and modernise its training facilities.

HB&O also called on Ludgate Finance’s expertise to help secure £170,000 funding for Midlands engineering company PowerKut, also through the ThinCats network.

The £170,000 loan has enabled the firm to invest in new equipment, which will bring £100,000 of previously sub-contracted work back in house.

In addition, Ludgate helped secure a £160,000 loan for HB&O client Edgbaston Hotel Ltd. to fund the conversion of a listed building into a quality boutique hotel.

Richard Mason, of Ludgate Finance, said: “We are pleased to work with MGI firms to help facilitate loans for clients, when they perhaps couldn’t get finance through traditional means.

“The growth of peer to peer lending over the last four years means that SME businesses now have many options to get the finance they need to invest in growth.

“And now with the involvement of institutional investment, the marketplace is moving in a different direction with many different funding lines and lending products available.

“Appetite for deals and increasing awareness in the marketplace suggests that P2P is here to stay. Some argue that at some point, bank finance will be seen as the alternative.”