Small and medium sized enterprises (SMEs) in the communications sector are more likely than other sectors to consider alternative sources to finance their businesses.

A survey on 5,000 UK SMEs conducted by the Business Banking Insight (BBI) has found that 32% of businesses were most likely to consider new ways of funding such as peer to peer lending, against a national average of 23%

25% of SMEs were considering selling equity to help raise more funds, with manufacturing (23%), science and technology (21%) and real estate (20%) businesses also more likely to sell. Only 8% of agricultural businesses were likely to sell equity for funding.

The survey also found:

• 73% of SMEs would invest their own money to expand their business
• 63% would consider a business loan
• 59% would take out a business overdraft.

70% of SMEs would talk to their bank to seek more information on financing. 78% would turn to an accountant, 58% would consider a financial adviser, while 41% would look online for financial advice.

Mike Cherry, Federation of Small Businesses policy director and spokesperson for the BBI, said:

“Investment is a vital element of business growth, and finding the right finance for your businesses needs is critical.

“Today, there are increasingly diverse and innovative ways to secure business finance. However more traditional bank-sourced lending continues to dominate the market for SMEs.”

John Longworth, director general of the British Chambers of Commerce and spokesperson for the BBI, said:

“Many firms are learning that there is a plethora of detailed and intelligent advice that is easily accessible online, which makes it important for banks and financial services providers to continue to adapt their services to support the changing needs of business customers.”