By Daniel Hunter

A third of entrepreneurs claim that crowdfunding will be the most likely option for raising finance within their business in the next 12 months, according to a survey by Irwin Mitchell.

The national law firm conducted the survey amongst entrepreneurs and business leaders and found that 32% said that they were likely to use crowdfunding to raise money for their business in the next 12 months.

This compares to 17% for Peer-2-Peer lending and 13% for angel investment. Thirty-eight percent said they would use more traditional means such as bank loans or grant funding.

Over three quarters (77%) said that they would consider investing through an equity crowdfundng site. Seventy-three percent said that they would use a P2P lending portal and 69% said they would invest as an angel investor.

Central to the growing popularity of alternative forms of finance is accessibility. According to the survey, 63% said the growth of crowdfunding and P2P lending stems from issues and difficulties in accessing finance elsewhere. Twenty-nine percent said flexibility was the key to its success.

Despite crowdfunding appearing to be moving into the mainstream, almost one third (31%) agreed with its ‘wild west’ reputation and said they felt in certain situations it offered little protection to investors.

When asked specifically about angel investment, the vast majority said they believe angel investors have an appropriate amount of control over the business they invest in.

Andrea Cropley, Corporate Partner at Irwin Mitchell, said: "Although many entrepreneurs have not yet used alternative forms of funding, it is clear that many are happy to do so and will in the next year. As with all finance options, whether mainstream or less traditional, it is vital that businesses explore all options and take the appropriate advice from specialists.”

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