Business minister Michael Fallon announced the launch of a new Enterprise Capital Fund (ECF) to invest in science, technology and engineering-based SMEs.
The Government have invested a whopping £25m in Longwall Ventures ECF, the twelfth Enterprise Capital Fund. Private investors injected a further £15m into the scheme, and the ECF is to invest in funding rounds of up to £2m to support science, technology and engineer-based growth businesses.
Business minister Michael Fallon made the announcement during a speech at the Investing for Success: The Seed Enterprise Investment Scheme (SEIS) briefing at the London Stock Exchange. SEIS aims to encourage investors to put their money into new firms by offering significant tax breaks.
“We are determined to make the UK the best place in Europe to start, finance and grow a business,” explained Fallon. “The new £40m Enterprise Capital Fund will address a gap in the market and help our small businesses find the finance they need to realise their potential. And we are also taking action to encourage more investors to bank roll small businesses.”
Doug Richard, founder of School for Startups believes: “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 SEIS is a breakthrough tax incentive which encourages investment in small businesses by reducing the risk to potential investors.”
Since its launch in 2006, ECF has invested more than £160m in over 140 businesses to date. The event highlighted how SEIS was already making a difference to UK SMEs: Gloople, a social sharing ecommerce platform received £130,000 through SEIS.
SMEs are Britain's fasting growing and most dynamic businesses. Effective funding is instrumental in restoring the UK economy back to sustained growth. ECF is a step in the right direction, but as more banks turn their backs on SMEs, other measures need to be implemented to ensure growth.
Could ECF help drive your business forward?
Want the latest business news and analysis? Get our FREE newsletter.