LAUNCHPAD: Small businesses join the crowd

Small businesses are apparently turning to crowd funding, away from those banking bad boys.

by Rachel Savage
Last Updated: 17 Jan 2014

Small companies are increasingly considering using crowdfunding to grow, as they continue to worry about getting normal bank loans, according to research commissioned by, er, online crowdfunding site FundingKnight.

Over 60% of small business owners said they have either used crowdfunding or would think about doing so, although only 20% have actually taken the plunge.

Two-thirds of the companies surveyed said they need funding to grow, but over half aren’t confident they can get that from banks. However, those rascal lenders may not be on businesses’ naughty step for too much longer – almost a third of the small businesses questioned said they think banks will start lending again (they obviously will eventually, so MT presumes that means in the near future).

‘We firmly believe that alternative methods of funding, such as crowdlending, are set to become a mainstay of business growth in this country,’ said FundingKnight’s chief exec Graeme Marshall. Well he would say that, wouldn’t he?

The survey only questioned 300 business owners and ‘decision-makers’, so not exactly scientific, and with the Funding for Lending Scheme switching back to its original mandate of business lending instead of fuelling the mortgage market, crowdfunding might not seem so hip and cool soon. More funding is good funding for small businesses though, so balance sheets could be looking perkier soon.

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