Businesses in the North East have been urged to turn to crowdfunding to stimulate growth in the current climate.
The Federation of Small Businesses (FSB) has put its support behind crowdfunding initiatives after accessing bank loans have become increasingly difficult.
Bank lending has fallen significantly since the recession hit, and crowdfunding schemes could open up opportunities for businesses in the North East to be able to access finance.
Ted Salmon, the North East Regional Chairman of the FSB highlighted how firms could tackle the financial issues they are facing.
He commented: “Accessing finance is one of the biggest issues that our members across the region are facing.
“With statistics showing that the banks aren’t lending to small businesses, many are exploring alternative sources of finance to meet their growth ambitions.”
Crowdfunding enables companies to do a funding pitch to gather small amounts of investment from several different sources to potentially attract funding.
Exeter-based Crowdcube is a platform for this type of investment that has successfully helped businesses to gain funding.
A joint venture between the FSB and Enterprise Europe Network team at Newcastle Science City will uncover different routes to funding at the “Accessing Alternative Source of Finance” event on Thursday.
The chief executive of Crowdcube, Darren Westlake, explained crowdfunding ahead of his speech at Newcastle Business School’s event.
He said: “Having run businesses before, I know how hard it can be to raise finance or attract investment.
“There’s no doubt that businesses are struggling to access finance from traditional providers like the banks.
“We launched Crowdcube to help businesses across the UK attract investment from a larger pool of investors who invest smaller sums.
“To date, we have helped 21 firms raise £3.7m which has helped them grow the business and expand into bigger markets.”
Thursday’s seminar will focus on business growth and how to gain funding for expansion.
Attendees will hear from experts from Ward Hadaway and UNW, who will introduce a new Government scheme for enterprise investment.