[robertlagrant]

Going cap in hand to an angel investor for every £10k loan is not viable. And they don't have the levels of cash needed for this.

Why not use banks for this as well?

[Retric]

Get rid of Banks and many different things change.

Some wealthy investors would setup a lending operation using their own cash, based on historical examples of such. They would however need to charge higher interest rates than banks because they would be more capital constrained.