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Crowdfunding boosted by lack of confidence in banks

Is crowdfunding picking up the slack during the bank lending crunch?

Despite positive economic figures released last week, many entrepreneurs are still concerned about longer term growth prospects according to the latest data from Smith & Williamson’s quarterly Enterprise Index.

These figures come as a contrast to the strong positive sentiment from Britain’s tech sector, as revealed by the Silicon Valley Bank earlier this month.

The latest survey figures found despite the gloomy economic outlook many entrepreneurs appear to be look towards alternative funding methods including crowdfunding.

Osborne not doing enough to reduce the deficit

According to the survey, the main concern for respondents centred around the fact they don’t believe Chancellor George Osborne is doing enough to reduce Britain’s budget deficit. Entrepreneurs also complained about continuing difficulties accessing funding directly from banks.

Smith & Williamson found  other figures from the survey suggesting that the rise of crowdfunding as a means of finance for businesses could help with future growth.

“With most businesses unwilling or unsuited to raising traditional venture or growth capital, and with a scarcity of bank loans and overdrafts, there’s an increasing focus on the alternatives,” said Guy Rigby, head of entrepreneurs at Smith & Williamson, the accountancy and investment management group.

“Whilst, in some cases, there are regulatory challenges which undoubtedly need to be resolved, it’s new, it’s here and it’s a welcome alternative for the nation’s entrepreneurs” Rigby added.

READ MORE: How to get the most out of crowdfunding

Tech City News will be holding a roundtable discussing the benefits of crowdfunding for startups at the Eight Club in Moorgate on 28th May 2013. Attendees include private investors and KPMG’s Tim Kay If you’re interested in attending contact us by email: