FEWER than 20 per cent of small- and-medium sized enterprises (SMEs) are aware of how to access peer-to-peer finance, research shows.
A poll of 1,000 firms by accountancy firm Smith & Williamson found just 17 per cent knew how to obtain a P2P loan.
The survey, part of a report called Dream Bigger: Funding ambition, showed seven in 10 businesses that have attempted to raise capital have failed at least once, two in five have failed to secure funding more than three times and nine per cent have been unsuccessful on five or more attempts.
The reasons behind this are varied.
The most common explanation given by 45 per cent of founders is that their management team wasn’t strong enough, while 27 per cent said their business model was took weak.
Another 28 per cent were told they didn’t meet the correct criteria and 22 per cent admitted to not having a good enough handle on their finances.
“Securing investment into a business shouldn’t be a blind leap of faith,” John Morris, partner at Smith & Williamson, said.
“Preparation is key. To be investor-ready, businesses must ask themselves difficult questions and demonstrate they have a strong management team in place, something that is crucial for investors. Equally important is the level of ambition displayed and a degree of certainty on future plans and objectives.
“Even with these measures in place, securing investment is never easy. Getting high-quality and relevant advice right from the outset can significantly improve the chances of businesses securing funding.
“This mindset will see the number of firms successfully raise external finance increase and, importantly, reduce the number of those experiencing funding regret.”