Research by crowdfunding network Crowdfinders has found that 35% of respondents said they would turn to personal savings to fund their business, closely followed by banks and institutions and friends and family.
However, only 8 per cent of the respondents said they would turn to crowdfunding and just 5 per cent said they would opt for P2P lending.
The figures hint that the supposed alternative finance revolution, which has a significant base in London, still has some way to go before it becomes a truly mainstream financing option for the UK’s businesses.
Crowdfinders’ research also points at a worrying lack of awareness among the country’s young entrepreneurs, with 52% of 18-34 year olds claiming they would not know where to turn to for financial support when starting a business.
Luke Davis, Co-Founder of Crowdfinders, believes there is more to be done before alternative finance platforms such as Seedrs and Crowdfund can truly realise their potential as democratising forces.
He said: “There has been a long-standing issue in the world of business that typically only entrepreneurs with deep pockets or wealthy friends and family can access the capital they need to start or scale-up their business.
“The alternative finance revolution was meant to democratise access to funding; however, more needs to be done to connect entrepreneurs with potential investors so they no longer have to rely on personal savings or the bank of mum and dad.”