MANY small businesses are turning to alternative finance options, including peer-to-peer lending, to support their growth plans in 2018, research suggests.
A poll of 1,000 small business owners by payments company Worldpay found 52 per cent are concerned that traditional routes to finance, including bank loans, might not be available at the same levels in the coming year.
Nearly a third (30 per cent) have already encountered difficulties securing funding through these traditional channels.
Meanwhile, 40 per cent of younger business owners claimed the growth of alternative finance options has made them less reliant on banks for funding.
The poll found alternative funding options are almost on a par with traditional bank lending in terms of popularity among start-ups and younger business owners.
Although 21 per cent of business owners aged 44 or under said they are still most likely to apply for a bank loan when looking for funding, 17 per cent said they are more likely to look at crowdfunding, 11 per cent P2P lending and six per cent a business cash advance.
The survey also suggests small business owners are concerned about political and economic uncertainty in the year ahead.
Just 43 per cent thought trading conditions would improve in 2018, with Brexit the most popular reason for their concern.
Only 32 per cent of businesses in London said they are optimistic about the economy in 2018, compared with 54 per cent of those in Birmingham and the West Midlands.
Despite their concerns, more than half of the small business owners surveyed stated they are planning to grow in 2018.
James Frost, chief marketing officer at Worldpay UK said it is important that small businesses familiarise themselves with the options available to them, so they can pick the funding route that best suits their circumstances.
“Banks do an incredible job in supporting thousands of small businesses every year, but the traditional bank loan may not be right for everyone,” he added.