The reluctance of banks to lend to businesses has kick-started massive innovation in business finance.  This week peer-to-peer (P2P) lender Zopa passed the £1bn lending mark and is expecting to do the next billion by the end of 2016. Peer-to-peer lenders have captured the public imagination by offering an alternative to banks.

Yet, focusing on P2P misses a huge part of the story of how funding in Britain is changing. P2P lenders innovated on the funding side by sourcing liquidity from individuals rather than institutions. That was helpful during the banking crisis when funding was scarce. Today we are facing fundamentally different challenges. There is plenty of funding available but businesses are still finding it very difficult to access credit.