Which Funding Channels To Use
Over the past decade we have seen more people than ever take the plunge and start up their own businesses. Now, there are over 5.8 million small and medium size businesses (SME) in the UK.
In 2019 there were over 678k new businesses established, a growth of over 4.2%. With all these new businesses, it is unsurprising that the demand for growth capital has dramatically increased.
There have been many advances in fundraising from the introduction of channels such as crowdfunding, peer-to-peer lending, to tax incentives such as the Enterprise Investment Schemes (SEIS and EIS), all of which have made the process of fundraising more attractive to investors. However, despite these significant changes the growth in the amount of capital that is being provided to SMEs has been marginal when looking at all funding channels combined.
Given the rapidly increasing demand for funding, and supply of capital increasing at a slower pace, it is no surprise that competition for each pound of investment is as tough now as it ever was (perhaps even tougher).