Small and medium enterprises (SMEs) have been fueling the economic recovery in the U.K. and the U.K. government has been trying to boost lending to the sector. But now the London Stock Exchange is getting in on the act, urging SMEs to look at raising equity instead.
According to the CEO of the LSE Group, Xavier Rolet, not enough SMEs used equities to fund their growth.
"The London Stock Exchange group today is a widely diversified group. SMEs represent less than one percent of our revenues," Rolet told CNBC in an interview on Friday.
(Read more: Funding for lending to focus on SMEs: Carney)
"What we can offer is additional funding options, and particularly non-debt based financing. If you're an entrepreneur, if you're going to borrow money, you have to pay interest, very often you have to mortgage some assets. This is not the case with equity investors."
The LSE has identified 1,000 SMEs that will help propel the British economy through a report by Growth Intelligence titled "1,000 Companies to Inspire Britain," which details the most vibrant, fast-growing companies in the country.
Rolet told CNBC that 50 percent of SMEs use credit cards to fund themselves, and that only three percent currently tap into the equity market for funding.