The survey of entrepreneurs found that 32 per cent thought it was the most likely funding choice they would use in the next 12 months.
17 per cent said they would use P2P loans and 13 per cent angel investment, while two fifths said they were lost likely to go for more traditional sources such a bank loans, grants and venture capital.
The survey found that accessibility was a key factor in the rising popularity of alternative funding. Sixty three percent said the growth of crowdfunding and P2P lending stems from issues and difficulties in accessing finance elsewhere.
Andrea Cropley, Corporate Partner at Irwin Mitchell, said: “Although many entrepreneurs have not yet used alternative forms of funding, it is clear that many are happy to do so and will in the next year. As with all finance options, whether mainstream or less traditional, it is vital that businesses explore all options and take the appropriate advice from specialists.