Jasper Cuppaidge started brewing beer for fun in the basement of The Horseshoe, his north London pub. Today, he is running one of London's most respected and innovative brewers of beer, the Camden Town Brewery.
Founded in 2010 – when the U.K. economy was going through huge difficulties – the brewery now employs over 60 people and sold 7.5 million pints in 2014, according to its website.
With the company forecasting sales of 40 million pints annually by 2020, it is in the midst of an expansion, funded not by traditional lenders but by an online, crowdfunded project to fund a brand new, much larger brewery.
Why did Cuppaidge choose to raise money via crowdfunding - when large numbers of small-time investors help finance a project, typically via the Internet - rather than by more traditional means?
"I guess the main thing for us with the 'crowd' was that it was a crowd… to become a well-known, well appreciated brewery we needed people to know about us," he told CNBC in a phone interview.
The initial target for the Camden Town Brewery was to raise £1.5 million ($2.4 million) through crowdfunding platform CrowdCube.com. The campaign proved so popular, however, that the amount raised exceeded that figure.
In addition to the crowdfunding campaign, which ended in April this year, an outside investor also invested £10 million, meaning that just over £13 million was raised, Cuppaidge said.
Cuppaidge explained that the interaction with those who donated money was another key factor behind opting for crowdfunding.
"We engaged with them because they asked interesting questions rather than financial questions, they were interested in where we wanted to go… also, we've got now 3,000 ambassadors who ultimately want us to succeed because in our success they'll reap the benefits," he said.
Those who invested in the project were not only offered equity in the brewery, but also beer-related rewards. A £100 donation would result in a five percent discount on Camden Town beers at the brewery's bars and an invite to the Camden Town Brewery Annual General Meeting. At the other end of the scale, a £250,000 investment came with the benefit of a three-day tour of German breweries, among other incentives.
The experience of Cuppaidge and his business is indicative of a broader shift, as more and more businesses look to alternative sources of finance, such as peer-to-peer lending as well as asset-based lending, private equity, trade finance and supply-chain finance.
A report from the University of Cambridge and Nesta in 2014 predicted that the size of the alternative finance market would reach £4.4 billion in 2015, up from £267 million in 2012, "if current growth remains buoyant."
Only this week another craft brewery, Scotland's BrewDog, announced that it had raised £5 million through its crowdfunding scheme Equity for Punks. The capital raised will be used to expand the BrewDog brewery as well as help launch new projects such as a craft beer hotel. The brewery hopes to raise £25 million in total through crowdfunding.
For Marte Borhaug from the Confederation of British Industry (CBI), the distinction between alternative finance within the debt and equity spaces is crucial, with the latter potentially more important for U.K. businesses.
"Our view is that in the U.K. we are heavily dependent on bank lending and generally quite happy to take on debt finance," Borhaug, head of financial services and corporate governance at the CBI, told CNBC in a phone interview.
"We think that, increasingly, a lot of the businesses that can really kick-start growth in the economy, what they need is equity finance… long-term patient capital that can stay in the business not only for three-to-five years but going to 10, 12 years."
Could we eventually see banks become redundant when it comes to financing businesses?
"We think that traditional lenders like banks will still remain a very big part of the market," Borhaug said, but added that the "mere existence of alternative sources of finance is actually pushing the traditional lenders to change."
Because of increased competition, lenders were now, "starting to offer more alternative sources of finance within their own business… they're scaling up their asset-based lending."
For Cuppaidge, the experience of using an alternative source of finance has been overwhelmingly positive. "It's got our name and reputation out and amongst the people – this is ultimately what we want to do… it's broadened the horizon."