December 16 2016.

Demand for traditional bank debt has continued to fall, according to a study by Albion Ventures.

More than two in five (44 per cent) small and medium-sized enterprises (SME) owners would consider taking equity finance, up from 34 per cent a year ago. In 2013 just 12 per cent of SMEs were willing to swap equity for support.

More than a quarter (26 per cent) of business owners would consider a ‘Dragons Den’ style exchange of equity for hands-on support from venture capital, private equity or business angels, rising to almost four in ten (35 per cent) among firms with more than five employees.

Over the same period, demand for traditional bank finance fell to 45 per cent, down from 49 per cent in 2015, suggesting that the UK SME sector is pivoting away from its reliance on debt.

In its analysis of the largest barriers to growth, the report shows that access to finance, arguably the highest profile concern facing small firms in recent years, has fallen to seventh place in 2016 (and 13th among firms with over five employees), down from sixth in 2015 and fourth in 2014.

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