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Survey points to expanding sector

Small firm owners expect growing demand for alternative finance

alternative financeSmall business owners expect demand for alternative finance – including property finance, crowdsourcing, invoice finance and asset finance – to increase over the next two years, while just 8% think it will decline.

Business owners in Scotland and Wales were jointly second behind London in their expectations of growth in the alternative finance sector.

It was responsible last year for raising £1.74 billion, double that of 2013 and 42% of small businesses said they considered using alternative finance in the last five years.

The findings, in a survey conducted by Consumer Intelligence for property-based lending firm Amicus, show that small firms predict demand for alternative finance will increase by an average of 26% over the next two years.

The most popular option, considered by 24% of respondents, was crowdsourcing finance, including peer-to-peer lending and crowdfunding, followed by cashflow/invoice finance (18%), property finance such as bridging loans and commercial mortgages(8%) and asset finance (6%), which covers areas such as plant and machinery and  business equipment.

On a regional basis, 77% of small business owners in London predict a rise in demand for alternative finance, the largest portion in the UK

Business owners in Scotland and Wales were equal second with 69%

SMEs in the West Midlands were the least enthusiastic about alternative finance with 53% anticipating an increase.

John Jenkins, chief executive 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.

Do you believe that SME demand for alternative finance will increase over the next two years?

UK region

Those that answered yes (%)

London

77%

Wales

69%

Scotland

69%

East Midlands

68%

North West

67%

South East

67%

Yorkshire and the Humber

63%

South West

61%

North East

59%

Northern Ireland

56%

Eastern

56%

West Midlands

53%

UK average

64%

Source: Consumer Intelligence (May 2015)

 



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