The findings from lending firm Amicus revealed that just eight per cent of entrepreneurs believe there will be a decline over the period. It demonstrates the increased appetite for crowdfunding, and finance from property, invoices and assets ahead of traditional methods.
Indeed, business leaders expect that the demand will increase by an average of 26 per cent in the next two years 2014 resulted in 1.74bn raised through alternative finance, which was double the previous year’s figure.
John Jenkins, CEO of Amicus, said: This research shows that the business finance landscape has changed for good and demand for alternative finance is set to go from strength to strength over the coming years.
Small businesses are increasingly turning to specialist lenders who have the skills to understand their specific needs. Having built a strong business base from our property lending expertise we are broadening our proposition into other areas of lending. Our relationship-based approach resonates well in specialist lending markets that are poorly served by mainstream lenders.
Some 42 per cent of small businesses have considered embracing alternative finance in the last five years. Crowdsourcing, such as peer-to-peer lending and crowdfunding, was the most popular choice as chosen by 24 per cent of respondents. It’s perhaps unsurprising, given that the disruptive nature of crowdfunding and P2P continues to secure headlines for the sectors.
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Elsewhere, cashflow and invoice finance was the second most popular choice with 18 per cent, followed by eight per cent for property finance, such as commercial mortgages, and asset finance with six per cent.
In terms of the regions where alternative finance can expect the most demand, 77 per cent of small business owners in London expect an increase for the sector. This was followed by 69 per cent in both Wales and Scotland, followed by 68 per cent in the East Midlands, and 67 per cent in the North West and South East.
Meanwhile, just 53 per cent of business owners in the West Midlands expect to see an increase in the alternative finance model.
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