Figures released by the UK Peer to Peer Finance Association shows the industry in buoyant mood ahead of the introduction of new regulations in April, with P2P lending increasing by 121% during 2013.
The figures show that cumulative lending at the end of quarter four in 2013 hit £843 million compared to just £381 million at the end of 2012.
The data also shows that at the end of 2013 there were over 3,700 business borrowers, 70,000 consumer borrowers as well as more than 86,000 active lenders.
Christine Farnish, chair of the Peer to Peer Finance Association says: "2014 will be a significant year for the industry. We are about to pass the £1billion milestone of total monies lent and in April we become regulated by the Financial Conduct Authority, something we strongly support."
Just last week, industry pioneer Zopa raised £15 million from Arrowgrass Capital Partners, after doubling in size and loaning out more than £180 million in 2013.
With strong support for the industry from City investment funds unlikely to tail off, and plans to include the asset class in tax-free ISA accounts, 2014 looks set to see a huge upswing in lending volumes.
Daniel Rajkumar, managing director of OP2P outfit rebuildingsociety.com, comments: "These latest figures support the view from inside the industry that growth is inevitable. We expect both supply and demand to grow strongly in 2014 as awareness and confidence increases among SMEs and consumers."