The research – conducted by One Poll and encompassing 500 SMEs – unveiled a number of telling results about why more businesses don’t seek out alternative forms of finance. We’ve summarized the key findings below:
29% of businesses that were refused bank funding didn’t seek alternative finance because they didn’t know where to look.
20% of SMEs were deterred because they assumed alternative funders would turn them down.
12% didn’t seek alternative finance because their accountant/financial adviser didn’t suggest it.
Peer-to-peer lending was the most recognized form of alternative finance by respondents (50%), with 30% aware of equity crowdfunding, 24% familiar with business cash advance, and 22% with pension led funding and online invoice finance.
Angel investment had the lowest profile – with only 12% of respondents aware of it as a means of funding.
20% of respondents were not aware of any types of alternative finance.
45% of SMEs think that securing alternative sources of funding (compared to attaining bank funding) is difficult – and 22% considered it easy.
“Despite the fast growth of alternative funding and its increasingly higher profile, education and information is still key. We need to overcome the lack of awareness amongst a large part of the small business community. Thought leaders, government and financial advocates must all do their bit so SMEs know where else to go to access vital working capital.”
The alternative finance sector has made great strides – but, and at the risk of beating upon a heavily worn drum, there remains much work to be done in terms of elevating the sector’s public profile.