News

July 12, 2013

Take-up of enterprise schemes soars by 90%

The number of UK businesses looking to raise funds under two key government enterprise schemes has gone up by 90% in the past year, according to Rockpool Investments.

A total of 4,075 companies applied to HMRC in 2012/13 for approval under the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), compared to 2,147 applications the previous year.

According to Rockpool, changes that came into force in April 2012 to expand the scope of EIS, along with the launch of SEIS to boost investment in smaller businesses, are key factors in the sharp rise in pre-approval applications.

Nicola Horlick, chairman of Rockpool, said: "It's great to see the overhaul of the enterprise investment rules working so well, giving a huge boost to SMEs by enabling them to replace vital lost bank funding, and giving investors more scope to benefit from significant tax reliefs on their investments."

She added: "In recent years, EIS has proved to be very appealing for both SMEs and investors, however this huge leap in demand for what was already a very successful scheme shows that the recent reforms are providing a real shot in the arm for Britain's small and medium-sized companies."

The changes to the rules on enterprise investment have also been "a massive boon for private investors," said Horlick, enabling them to invest more in larger, better established companies with lower risk profiles across a wider range of sectors.

"For those interested in opportunities to fund seed businesses with potentially higher risk-reward ratios, SEIS has also been an interesting option," added Horlick. "Either way, the fact that the tax reliefs have been made so favourable is hugely positive for fuelling equity investment. We expect to see demand for EIS remain robust for the foreseeable future."