Nearly half of British entrepreneurs have nowhere to turn for funding, according to data released by Crowdfinders.
The data shows that 23 million people across Britain are unsure how to fund a business with 52% of 18-34 year olds saying they would not know where to turn for business funding.
A further 35% would resort to personal savings instead of alternative sources if they were to start or grow a business.
The bank of mum and dad has always been a stable source of funds for many; however 64% of those surveyed said that those close to them do not have the means to support their business venture.
Luke Davis, co-founder of Crowdfunders, said: “The alternative finance revolution was meant to democratise access to funding.
“However more needs to be done to connect entrepreneurs with potential investors so they no longer have to rely on personal savings or the bank of mum and dad.”
Analysis by Funding Options revealed that since 2011, banks have withdrawn £5.7m a day in small business overdrafts alone thereby cutting available credit by £8.4bn at a cost of £2.9bn to the UK economy.
Britain’s SMRs are feeling the financial shortfall, and RSA figures revealed over half of UK businesses are failing within the first five years as a result.
Crowdfinders’ survey comes after they launched a new pre-crowd investment platform to address the problem of declining bank lending, which marks the second stage of Crowdfinders’ £100m scale-up funding initiative Race to Scale.
Luke Davis added: “The Crowdfinders’ new pre-crowd platform ensures entrepreneurs can access scale-up investment without needing a network of wealthy contacts to get a business off the ground.”