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Personal savings top fallback option for UK’s entrepreneurs

The UK’s entrepreneurs are more likely to fall back on personal savings than alternative financing platforms such as crowdfunding or peer to peer lending, according to a survey of 2,000 adults.

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 (28%) and friends and family (15%).

However, only 8% of the 2,000 respondents said they would turn to crowdfunding and just 5% 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.”

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