New research shows small businesses in Britain are tiring of the slow progress in accessing bank loans, and are turning to alternative sources of funding.
A study from Nesta revealed that more and more small businesses are turning to peer-to-peer lending, which has the potential to deliver around £12bn annually.
Crowd funding websites are also moving up the list of priorities for small business funding, with an 81% increase in crowdfunding contributions in the past year.
Nesta’s research showed 75% of companies would go to crowdfunding site Funding Circle before approaching a bank for a loan the next time they needed more funding.
Stian Westlake, executive director of policy and research at Nesta, said: “Coupled with the recession, it’s the explosion of social media and the use of (the) Internet that has made it easier and cheaper to connect those who want to invest with the businesses that need finance.”
Have you had a hard time getting a bank loan for your business? Would you consider peer-to-peer lending or crowdfunding? Leave us a comment to let us know your thoughts.