There are a record 5.2 million small firms in the UK, according to a government report.
The number of small businesses has increased by 760,000 since 2010 and 4.5 million people are now self-employed, an increase of 500,000 from 2010.
The report reveals that more than £130 million has been lent through the Start Up Loans Company which has supported 25,000 start-ups and created 33,000 jobs.
The dawn of alternative finance
However, businesses are increasingly looking towards alternative sources of finance. Data from AltFi reveals that during the first half of 2014, £1.3 billion was lent through peer-to-peer (P2P) lending and crowdfunding. With a slowdown in bank lending, these new types of finance have been particularly popular with small firms and start-ups.
Peer-to-peer: Peer-to-peer (P2P) firms connect you with investors across the world. The cost of borrowing through P2P can be lower than the deals you’ll find on the high street.
Crowdfunding: Through the power of the internet you can raise money from a large number of people. You can raise equity and debt finance by pitching your idea on a crowdfunding website and promoting it with social media.
Talk to us about accessing business finance.