Most small businesses are continuing to depend on traditional business finance in the form of a bank overdraft or personal cash, according to recent study.
The survey was conducted to understand why and how businesses have sought further finance, finding that alternative finance sources have not as yet made a substantial impact.
From the variety of finance options available, crowdfunding ranks at the bottom of the list when it comes to how well-known these options are, with a huge 60 per cent saying that they have never come across it. Also rating poorly were government grants, business cash advances and angel investments.
More than 40 per cent of those who responded said that the first step they would take, should they need finance, would be to talk to their bank. The second most popular answer was to speak to an accountant, with 18 per cent offering that response.
A representative of the company producing the report told Small Business:
?When looking for finance, the first port of call for SMEs is their bank. However, a commercial loan is unlikely to be appropriate for their specific needs, especially if the need is short term, such as alleviating cash flow issues.
?For many SMEs, it may make more sense to consider invoice finance options to alleviate the stress of collecting payments, especially where large new deals are won and they are already dealing with increased outgoings to ensure delivery of an order.?
Further, the report revealed that 60 per cent of those surveyed have sought additional finance in the last year, with the most popular reason given being short-term problems with cash flow.
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Source: http://www.psfinance.co.uk/businesses-remain-aware-of-alternative-finance-1210.html
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