12% of small and medium sized businesses who were refused bank funding didn’t seek alternative finance because their financial advisor/accountant didn’t signpost them to it, according to new research by One Poll, commissioned by revenue based funder, Liberis.
Not knowing where to look, however, was the biggest barrier, with 29% of respondents citing it as the reasons they didn’t look elsewhere. 20% were deterred because they assumed that alternative funders would turn them down too and 10% were put off by press coverage on how difficult getting funding is.
Financial advisors/accountants in the South East were the least likely that those in other regions to advise their clients of alternative funding options, followed by East Midlands and Northern Ireland.
Awareness of the types of alternative funding varied amongst the 500 businesses surveyed, with peer to peer lending being the most recognised by 50% of respondents. This was followed by equity crowd funding (30%), business cash advance (24%), pension led funding and invoice trading (22%) respectively. Angel investment had the least awareness with only 12% of respondents and a surprising 20% of respondents were not aware any types of alternative finance.
Liberis CEO Paul Mildenstein said: “There are incredible opportunities for financial intermediaries in this space and it’s important that they keep abreast of the developments and help clients understand and embrace the new options. We’re in the midst of a funding revolution and they’ve got a hugely important advocacy role to play not to mention a whole new source of deals.”
Overall, 45% of SMEs think finding alternative funding compared to bank funding is difficult – 22% per cent considered it to be easy.