Start-ups seek alternative finance in 2012

UK entrepreneurs believe they can no longer rely on the banks

Nearly two thirds of entrepreneurs (65%) are planning to seek alternative forms of finance in 2012, after losing confidence in the banks funding their businesses.

That is according to research by daily deals site Huddlebuy.co.uk, which spoke to 1,000 small business owners in the UK.

The results are in contrast to the initiatives announced by the government this year, such as Project Merlin, which claimed to boost bank lending to small businesses.

The research also revealed distinct disillusionment among young entrepreneurs – with almost three quarters of 18-34 year old start-up owners saying they saw no option but to seek alternative funding channels in 2012.

Craig Hamer, joint managing director of Dews Motor Group, said: “The banks are now the last place many businesses think about for investment and funding.

“They’re not lending like they used to, and the situation’s only going to get worse in the coming months.”

Saurav Chopra, CEO of Huddlebuy.co.uk, added: “Bank lending for UK small businesses has gone from bad to worse. The coalition government and banks talk a good game but talk is all it is.

“The reality is that businesses know they can no longer rely on banks. But at least entrepreneurs [like Crowdcube, Funding Circle and MarketInvoice] are fighting back to help fellow businesses find the finance they need.”

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