A new survey of 5,000 UK SMEs conducted by ICM on behalf of Business Banking Insight has found information and communications businesses were the most keen to consider the relatively new forms of funding such as peer-to-peer lending.
Information and communication businesses were also considering selling equity in their business to help raise funding for expansion (25% against a national average of 16%). Manufacturing, professional services, science and technology and real estate firms were also more likely to sell equity (23%, 21% and 20% respectively). Agricultural firms however were much less likely to do so (at just 8%).
Overall, the survey found that 73% of businesses would consider investing their own money to expand their business, 63% would consider a business loan and 59% would consider an overdraft.
To find out more information about financing, 70% of small businesses would consider talking to their bank, 78% would turn to their accountant, 58% would talk to an independent financial adviser (IFA) and 41% would look online at financial advice websites.
Mike Cherry, pictured Federation of Small Businesses Policy Director and spokesperson for the BBI, says: “Investment is a vital element of business growth, and finding the right finance for your businesses needs is critical. Today, there are increasingly diverse and innovative ways to secure business finance. However more traditional bank-sourced lending continues to dominate the market for SMEs. The BBI report gives small businesses an important tool to find the best product that’s right for them.”
John Longworth, Director General of the British Chambers of Commerce says: “The best financial guidance will be specific to each business, which is one of the reasons why accountants, banks and IFAs that offer personal interaction with customers score the highest among businesses. However, many firms are learning that there is a plethora of detailed and intelligent advice that is easily accessible online, which makes it important for banks and financial services providers to continue to adapt their services to support the changing needs of business customers.”