More than half of small business owners expect demand for alternative finance to increase in the next two years, according to specialist lender Amicus Finance.
This includes forms of financing such as property finance, crowdsourcing, invoice finance and asset finance. Just 6% think demand for this sort of lending will decrease, Amicus found.
These prediction also represent a slight increase on last year: 42% of business owners said they had considered alternative finance routes in 2015, and this grew to 51% this year.
Small companies believe demand will go up by 28% in the next two years, compared with their average estimate of 26% last year. In 2015 the combined market activity for the UK online alternative finance industry grew to £3.2 billion, representing an 84% increase compared to the £1.74 billion in 2014, said Amicus.
The most popular option for alternative finance, considered by 47% of respondents, was crowdsourcing. This was followed by cashflow/invoice finance (32%), property finance such as bridging loans and commercial mortgages (29%) and asset finance (24%), which covers areas such as plant and machinery and business equipment.
On a regional basis, more than two thirds (69%) of small business owners in the North West predict a rise in demand for alternative finance over the next two years, the largest portion in the UK.
Business owners in the East Midlands and West Midlands were second and third with 67% and 62% respectively. Just over half (52%) of small business owners in London predicted a rise in demand for alternative finance. SME owners in the North East were the least enthusiastic about alternative finance with 29% anticipating an increase.
As to what businesses intend to spend their money on, two in five said it will be invested in IT equipment, a fifth said cars, and 13% said telecoms equipment.
John Jenkins, CEO of Amicus said of the findings: “This research shows that the business finance landscape continues to change. Demand for alternative finance is set to go from strength to strength over the coming years as mainstream lenders struggle to evolve to adequately support a thriving small business community.”