Small businesses with high potential to develop have been given a £40 million boost.
Business and Enterprise Minister Michael Fallon announced the launch of a new Enterprise Capital Fund (ECF) to invest in technology, science and engineering-based small and medium sized enterprises (SMEs).
The new fund is the twelfth Enterprise Capital Fund and includes £25 million of Government investment and £15 million from private shareholders. With this funding, Longwall Ventures ECF will be able to invest up to £2 million to support these growth businesses. The Government’s investment in the funds is made and controlled by Capital for Enterprise Limited, the Government’s investment corporation.
The Minister for Business and Enterprise Michael Fallon said: “We are determined to make the UK the best place in Europe to start, finance and grow a business.
“Helping entrepreneurs to access a diverse range of finance options is vital.”
He further added: “The new £40 million Enterprise Capital Fund will address a gap in the market and help our small businesses find the finance they need to realise their potential.”
Rory Earley, Chief Executive Officer of Capital for Enterprise, said: “We are very pleased to be able to support this second fund for the partners and to work alongside the private investors who are also demonstrating their confidence in the team.
“This team will continue to support the development of technologies which can generate real future growth in the economy.”
Enterprise Capital Funds were set up to address a market flaw in the delivery of equity finance to new SMEs and are a joint public-private venture. Since 2006, more than £160 million has been invested in over 140 businesses.
Doug Richard, entrepreneur, investor and founder of School for Startups, also spoke about the benefits of the SEIS following a national road show to 3,000 investors and entrepreneurs in eight cities across the UK. The Government’s enterprise tsar, Lord Young, has been working with Doug Richard to spread awareness of SEIS amongst the investor community including a new SEIS information website.
Mr Richard said: “In today’s tough climate, business owners need to look beyond the banks and traditional investment avenues when looking for funding to grow their business. The Seed Enterprise Investment Scheme is a breakthrough tax incentive which encourages investment in small businesses by reducing the risk to potential investors.”
The event underlined how SEIS was already making a difference to UK SMEs including Gloople, a social sharing ecommerce platform which received £130,000 through SEIS, and G’NOSH a gourmet dips business.
The Minister similarly discussed how a new SME Finance Guide will help small businesses recognise the different forms of finance accessible to them. The guide is produced by the UK Department for Business, Innovation and Skills (BIS) in partnership with the Institute for Chartered Accountants for England and Wales (ICAEW). It gives comprehensive information on funding options such as debt finance, equity finance, commercial mortgages and leasing.
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