The famous saying attributed to Benjamin Franklin, one of the Founding Fathers of America, is that nothing in life is certain "except death and taxes." Small and medium-sized business owners would be forgiven for wanting to add something else onto this list of certainties; banks getting into trouble for financial malpractice while they remain reticent about lending to smaller businesses. However, the days when the banks represented the best option of providing new investment for companies could be coming to an end.

Increasing numbers of firms are turning away from their bank managers and to a new source of investment known as crowdfunding. The UK Crowdfunding Association defines crowdfunding as "a way of raising finance by asking a large number of people for a small amount of money. Until recently, financing a business project or venture involved asking a few people for large amounts of money - crowdfunding switches these ideas around."

The modern incarnation of crowdfunding (throughout history other methods have been used which are similar) really took off in 2003 following the launch of ArtistShare, the first online crowdfunding platform. Seeing the potential, other crowdfunding websites soon followed and by 2010 it was estimated that these websites had raised $89 million - just two years later this figure had skyrocketed to $2.6 billion. To call it a growth industry would be an understatement of epic proportions.

There are currently over 500 different crowdfunding ventures around the world, so there's plenty of choice for businesses as crowdfunding has become increasingly mainstream, although this vast choice can in itself be confusing. So where should small businesses begin? Start off by doing some research into the website that you're thinking of using. Some of these sites vet the companies that appear on them but others don't - it could reflect badly on your firm if you are on the same site as companies and ventures that are less than reputable - while the money that these sites charge varies as well. The industry standard is 7% of the total money raised but other sites charge an additional fee, so shop around.

Not only do these websites differ in how picky they are regarding who appears on their site and how much they charge, but crowdfunding sites have been set up for specific areas. For example, MoolaHoop only lists business ventures from female entrepreneurs and Abundance Generation specialises in renewable energy businesses. Those looking to invest in certain types of company will be more likely to visit the crowdfunding websites that cater to their needs, so it makes good business sense to at least see whether there are crowdfunding websites that specifically cater for the sector your firm operates in.

Despite the UK government seemingly taking bank lending to businesses seriously, figures suggest that this pool of finance is still desperately dry. Data released by the Bank of England for the second quarter of 2014 showed that lending to small and medium-sized companies fell by £435 million and that the government's Funding For Lending scheme was failing. Following the results John Longworth of the British Chamber of Commerce commented that, "much more needs to be done to fill the major gap in the provision of SME finance in the UK." Longworth doesn't mention crowdfunding in his comment, but could this fill the gap for SMEs?

Kevin Caley, managing director of the Crowdfunding firm ThinCats, certainly believes so. "Even though we are six years on from the recession, banks are still not lending money. This has made it extremely hard for British businesses to access capital, at a time when it's needed most. Peer-to-peer lending provides an alternative source of funding to traditional models and can help businesses raise finance relatively quickly. In many cases it can even raise awareness of their company at the same time. ThinCats is unique in using a ‘sponsorship model' (effectively using old fashioned bank managers that get to know their customers) to help business."

Crowdfunding only currently makes up a very small percentage of small business financing - around 1% - but it's an area that's roughly doubling in size every year. If this trend continues then it could have a real impact on how banks operate as they won't be the only serious players in the market. Caley has the figures to back up this point: "In the first three quarters of 2014, alternative finance platforms facilitated loans, investments and donations worth £1.2 billion, and current predictions are that this number will reach £1.74 billion by the end of the year, more than double that in 2013," he comments. "Peer-to-peer business lending continues to dominate the crowdfunding market with £749 million lent in 2014, which is 43% of the total market. Peer-to-peer lending has the potential to do to the banks what Amazon has done to bookshops."

The latest figures show that over 5,000 UK businesses have raised the money that they required through crowdfunding, and this number will only increase. The next time your firm requires some finance could it pay to see if you can make use of the strength in numbers of crowdfunding as a means of securing finance?