Business, Innovation and Skills
Mark Prisk (The Minister of State, Department for Business, Innovation and Skills; Hertford and Stortford, Conservative)
It is important that businesses can access the finance they need from a diverse range of sources, including bank debt, equity investment and other alternative forms of finance.
The Secretary of State for Business, Innovation and Skills, Vince Cable, has established an industry working group, led by Tim Breedon of the Association of British Insurers to explore how to further develop non-bank lending channels. This group will report by Budget 2012.
The Government itself has undertaken a range of measures to promote a range of finance:
To support equity investment in firms, Government has increased its commitment to the Enterprise Capital Funds programme by £200 million over the four years to 2014-15, providing for more than £300 million of venture capital investment.
Government has encouraged a better environment for Business Angel investment through the establishment of the new £50 million Business Angel Co-Investment Fund, which aims to support angel investments into high growth potential early stage SMEs.
Government has reformed the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs), increasing rate of income tax relief for EIS to 30% and increasing amounts that can be invested in qualifying companies and the size of qualifying companies (subject to state-aid clearance). From April 2012 the Seed EIS (SEIS) scheme will provide income tax relief of 50% for individuals who invest in shares in qualifying seed companies, with an annual investment limit for individuals of £100,000 and cumulative investment limit for companies of £150,000.
The Government's Enterprise Finance Guarantee (EFG) is also available until 2014-15, to guarantee, subject to demand, up to £2 billion in additional lending for those firms who lack the collateral or the track record to secure debt finance. From January 2012 this was extended to include businesses with up to £44 million annual turnover and a number of new lenders have been accredited.
To support firms' access to finance the Government has also announced £21 billion of credit easing measures to support smaller and mid-sized businesses which will include £20 billion of guarantees for bank funding to be made available over two years under the National Loan Guarantee Scheme; and the £1 billion Business Finance Partnership which will be deployed to stimulate markets in alternative forms of finance.
As part of the Government's “Business in You” campaign, the Government's Business Link website provides advice and guidance for businesses on the range of finance options available and how to apply. This can be found at