Santander will point firms to the P2P alternative through its website and in letters. In exchange, Funding Circle will signpost its customers to Santander for day-to-day banking support.

P2P lending has been picking up steam over the last year, offering an alternative to high street banks, which are still wary of lending to small and medium sized businesses.

Recent figures from the UK Peer to Peer Finance Association show that lending increased by 121% during 2013, with cumulative lending at the end of quarter four hitting £843 million compared to just £381 million at the end of 2012.

The UK government has thrown its weight behind the new alternative lenders. In February it handed £40 million to Funding Circle to distribute to businesses after the firm successfully offloaded an initial tranche of £20 million.

The government is also consulting on whether to make the kind of arrangement between Funding Circle and Santander mandatory, forcing banks to refer businesses to non-bank providers.

Ana Botin, UK CEO, Santander, says: "SMEs need access to multiple sources of finance, and Santander's partnership with Funding Circle is a good example of how traditional and alternative finance can work together to help the nation's SMEs prosper.

"Peer-to-peer financing is also a useful way to introduce people to the concept of investing in entrepreneurs; an important element in a healthy enterprise economy."

Similar cooperation is happening in the US. Last month, Union Bank agreed to purchase personal loans through the Lending Club P2P platform, and the two companies will work together to create new credit products to be made available to both companies' customer base.

Just published research from Greenwich Associates shows the tide is turning towards non-bank lenders. From a survey of 125 companies, it found that one-quarter reported securing funds from non-bank providers. Moreover, 90% of them said they would use non-bank providers for credit again, while 60% said the process of obtaining credit is easier through non-banks than it is through traditional banks.