Many small businesses are unaware of alternative forms of financing, according to new research.

A study of 2,000 small and medium sized businesses from Lloyd’s TSB found that asset-based funding remains a mystery to almost half of respondents. Only 52% of small and medium sized businesses said they were aware of asset-based lending, which includes invoice finance.

Invoice finance is one of the most popular forms of asset-based finance, where a company can borrow against the value of its customer invoices.

In contrast, almost all (98%) of respondents were aware of more traditional forms of finance such as overdrafts. Hire purchase and leasing are also fairly well-recognised, with 69% saying they understand these forms of finance.