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Alternative Financing Market Size - By Type (Peer-to-Peer Lending, Crowdfunding, Invoice Trade), By End Use (Individual, Businesses) & Global Forecast, 2023 – 2032

  • Report ID: GMI5670
  • Published Date: May 2023
  • Report Format: PDF

Alternative Financing Market Size

Alternative Financing Market size was valued at over USD 10 billion in 2022 and is anticipated to grow at a CAGR of over 15% between 2023 and 2032. Millennials & young adults entering the workforce are driving the need for change and greater financial efficiency as they seek to start businesses and invest in their financial futures. The market is also propelled by factors including increased access to capital, flexibility, lower costs, innovation & technology, and public change with alternative financing.

Alternative Financing Market

Alternative finance refers to financial channels, processes, and instruments that have emerged outside of the traditional finance system such as regulated banks and capital markets. Alternative lenders often offer an easier & faster loan process than traditional lenders such as banks. Furthermore, Technological developments, especially in fintech and online loan platforms, played an important role in the growth of the economy.

The major limitation of the business is the lack of knowledge and understanding of the options available. Many individuals and businesses still need to be familiar with other financial products and their benefits. However, providing clear and concise information about the benefits, risks and methods of alternative financing can increase confidence and encourage adoption of alternative financing methods.

Alternative Financing Market Trends

The alternative financing market growth is being driven by the increasing use of the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), and other similar technologies. Alternative financing provides solutions to businesses to sustain themselves in the industry by providing access to capital in difficult times. Alternative financing methods are generally seen as more flexible and less costly than bank loans. This has encouraged many businesses to use alternative financing to raise capital. As regulations provide protection to borrowers and lenders, government support increases consumer confidence in other financial options.

Alternative Financing Market Analysis

The alternative financing market from businesses segment was dominated around USD 5.5 billion revenue in 2022. The main advantage for businesses using alternative financing is the ability to secure capital quickly and effectively. Traditional financing options, such as bank loans or venture capital, can take time & effort and often require extensive documentation & lengthy approval processes. Alternative financing options, such as financial aid, peer-to-peer loans, or utility bills, can give businesses access to capital within days or hours, enabling them to take advantage of the brick face and stay ahead of the competition.

The peer-to-peer lending segment held significant market share of over USD 4 billion in 2022. Peer-to-peer lending provides a more efficient & effective way for individuals and businesses to obtain loans. Online peer-to-peer lending platforms allow borrowers to apply for loans anytime & anywhere. This is particularly helpful in areas where access to credit is limited or non-existent and for those who need help obtaining loans from traditional financial institutions.

The North America alternative financing market accounted for 30% revenue share in 2022. North America has the presence of a large & growing financial services industry, good infrastructures, and a large pool of investors & borrowers. This provides a good working environment for other financial service providers, giving them access to a large client base and the capital they need to grow & succeed. The high level of innovation and technological advancements in the region.


Alternative Financing Market Share

Major companies operating in the alternative financing market include:

  • Borrowers First
  • Credoc
  • Finastra
  • Funding Circle
  • GoFundMe
  • Kickstarter
  • Kiva Microfunds
  • LendingClub
  • LendingCrowd
  • Prosper Funding LLC
  • RateSetter
  • Sofi
  • Quicken Loans (Rocket Mortgage, LLC)
  • Upstart Network Inc.
  • Zopa.

Alternative Financing Industry News:

  • In May 2022, OnDeck announced partnerships with SoFi Technologies, Inc. and LendingTree. The partnership aimed to focus on helping small businesses nationwide. These partnerships combine best-in-class fintech and digital lending products with OnDeck's Artificial Intelligence (AI) and Machine Learning (ML) expertise, giving small businesses additional flexibility in using capital to support their development.

The alternative financing market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments:

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Market, By Type

  • Peer-to-peer lending
  • Crowdfunding
  • Invoice trade

Market, By End Use

  • Individual
  • Businesses

The above information is provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Netherlands
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • ANZ
  • Latin America
    • Brazil
    • Mexico
    • Argentina
  • MEA
    • Saudi Arabia
    • South Africa
    • UAE


Authors: Preeti Wadhwani

Frequently Asked Questions (FAQ) :

The market size of alternative financing was worth more than USD 10 billion in 2022 and will witness over 15% CAGR from 2023 to 2032, due to surging need for greater financial efficiency amongst millennials.

The businesses end-user segment reached over USD 5.5 billion in 2022, owing to the growing need for securing capital quickly and effectively.

North America accounted for over 30% of the alternative financing market share in 2022, attributed to the strong presence of a large and growing financial services sector in the region.

Borrowers First, Credoc, Finastra, Funding Circle, GoFundMe, Kickstarter, Kiva Microfunds, LendingClub, LendingCrowd, Prosper Funding LLC, RateSetter, Sofi, Quicken Loans (Rocket Mortgage, LLC), Upstart Network, Inc. and Zopa are some leading market players.

Alternative Financing Market Scope

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Premium Report Details

  • Base Year: 2022
  • Companies covered: 15
  • Tables & Figures: 208
  • Countries covered: 19
  • Pages: 250
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