Peer-to-peer lending looks set to have an increasingly important role to play in the UK economy, claims one industry source.

In a column for telegraph.co.uk, founder of Funding Circle James Meekings claimed the past 12 months has seen the system ‘come of age’, adding that the government’s recent vote of confidence should help this form of lending become ‘mainstream’.

Mr Meekings suggested traditional banks have failed to meet the financial needs of many businesses, which is why peer-to-peer lending could come into its own – whether this is for someone beginning as a sole trader or those who need money to start a franchise outlet.

He said: ‘This does not mean, of course, that the new challengers can immediately replace the banks as the prime source of business loans. These will, in the short and medium term, continue to come overwhelmingly from those traditional financial institutions. But while we may still only represent a tiny part of the market, we are growing strongly.’

While there is a great deal of enthusiasm for peer-to-peer lending, there are those that have stressed a note of caution. Money and property expert at independent.co.uk Julian Knight pointed out that the industry is currently unregulated, so anyone looking to lend cash via such companies should beware.

Mr Knight suggested regulation could come into force next year, but, for now, some brands are trading off the good reputations of companies such as Mr Meekings’ Funding Circle.