With the support of Workspace Group, Buzzacott and the GLE group, Knowledge Peers will be launching the second phase of their research on crowdfunding.
The market place for SME funding is increasingly inefficient. Funders struggle to find the “right” SMEs to finance, and SMEs struggle to find the right funding. Finding solutions to the two challenges (complexity and inadequate advice) would hugely increase efficiency and energise growth in the SME market place.
Knowledge Peers’ Alternative Funding Network “Crowdfunding: Attitudes and Perceptions” report summarises the findings into United Kingdom SME attitudes and perceptions towards a range of funding sources, and in particular emerging sources of platform and web based crowdfunding.
Knowledge Peers surveyed, in depth, over 100 SMEs operating in a wide range of sectors. Nearly 70% of these businesses were profitable in 2013 and a positive outlook dominates: 50% plan to grow moderately in 2014 and 35% plan to grow significantly.
Their approach was to survey a spectrum of different sized businesses, with some 50% having a turnover of more than £500,000. If one surveyed a representative cross section of SMEs, 90% would show as micro businesses with a turnover of less than £100,000. On balance, they surveyed a growing and positive sample of SMEs.
Some key findings:
- The Funding Gap Has Not Gone Away
- Complexity Is Filling The Gap
- Supply Not Matching Demand: A Deeply Inefficient Market
- A Dearth Of The Right Advice
- The Stress Of A Personal Guarantee
- Funding Platforms are Perceived as Good News by SMEs
Peter Thackwray, OBE Managing Director GLE Enterprise Development stated;
“As a provider of non-bank finance to new and growing SMEs for 20 years, GLE knows very well that the supply of capital has not matched demand for some considerable time, even before the crunch. Crowdfunding is an exciting and intriguing addition to the marketplace. Knowledge Peers’ research shows there is clearly a market, and a quickly growing appetite from businesses and capital providers. But the tests of its longevity will be whether Crowdfunding operators’ cost/income models prove profitable and if the returns for investors or lenders match the risks. While, these are still open questions, the research holds many insights and lessons on how, and if, these challenges can be met.”
The research will be released at a breakfast meeting on Tuesday, February 25th, 2014.