Cost Of Bank Finance Has Plateaued But Government Must Provide More Support

At a debate for entrepreneurs held at this year’s MADE Festival, almost three quarters (72%) of attendees said that the use of alternative funding will become more widespread over the next 12 months - with 40% expecting entrepreneurs to use their own pension to support growth in their company.
 
The findings from Irwin Mitchell’s research point to increased accessibility in relation to alternative funding option such as peer to peer lending, invoice trading and equity based crowd funding, but suggest that there is still much more to be done to raise awareness of its benefits.
 
Only 15% said that accessibility to alternative funding options was the biggest barrier to a wider take up, whilst a lack of financial education scored much higher with 66%.
 
Comparing traditional funding routes, the survey found that four out of 10 said that the cost of borrowing from banks had stayed the same in the last 12 months with 21% claiming that they thought it had actually gone down. Interestingly, over half (55%) said they thought banks were only ‘open to business’, but only if the company was asset rich.
 
Although 59% thought that debt funding was less risky than equity funding, 62% said that they thought that the benefits of equity funding outweighed the burden.
 
The research found that over two thirds thought grant funding was difficult to access with only 34% claiming that they thought that the Government was committed to helping young enterprises.

Irwin Mitchell conducted the research at the MADE Festival in Sheffield. As part of its support for the largest event in the UK for entrepreneurs, the leading law firm ran a panel discussion about accessing alternative finance.