According to a recent research by the British Business Bank, entitled “Small Business Finance Markets 2014”, the nature of demand for finance among small businesses is changing, with an increasing emphasis on growth rather than survival.
The report points out that 54% of companies raising finance did so to purchase fixed assets or to expand, up from 39% two years ago, while the proportion of companies seeking finance to boost cash flow fell from 45% in 2012 to 33% in 2014.
The study highlights that although 68% of businesses surveyed said they were confident in their ability to obtain external finance, the report found that significant barriers remain, including a lack of awareness.
Results of the survey also include the fact that 85% of respondents were aware of lease or hire purchase, only 15% knew about mezzanine finance and 36% were aware of angel investment. Although 55% were aware of venture capital, only 20% knew a specific supplier, and awareness of peer-to-peer (P2P) lending and crowdfunding increased to 35% and 32% respectively, up from 24% and 13% in 2012.
The British Business Bank & the Department for Business, Innovation and Skills (BIS) also conducted research into private equity finance for SMEs, which shows external equity investment in SMEs increased from GBP 1 billion in 2010 to GBP 1.6 billion in 2013.
The data is derived from BMG Market Research, “SME Journey towards raising finance: 2014 survey”, and comprised 1,000 verbal interviews in August and September 2014.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now