The ?Help to Grow? programme will supply growth loans to companies needing between ?500,000 and ?2m to help each ?achieve their potential?.
Going into more detail on the development, Keith Morgan, CEO of British Business Bank, said: “We know from British Business Bank research that almost half of UK firms (46% per cent) want to expand this year yet there is a market gap for smaller businesses seeking finance in the ?500,000 to ?2m range. ?Growth Loans has been designed to target that market failure in access to finance ? we estimate as many as 500 businesses a year might be suitable for a Growth Loan. We are inviting proposals for partners to help deliver this scheme, to ensure more smaller businesses in the UK can access the finance they need to scale.? The growth finance under the new pilot Help to Grow programme can include debt finance with equity elements, or more simply junior debt.?The Business Bank will run a pilot of “Help to Grow” which will aim to generate at least ?100m of new lending focused on two alternative approaches. Firstly, funds that would co-invest private money alongside public money, and secondly funds that would invest private money supported by a structured government guarantee to encourage increased lending. Other business finance initiatives to be announced by Osborne in his Budget speech, which will be his 6th and last before the May general election, included amendments to the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and Venture Capital Trusts (VCTs). These were made to ?ensure that the UK continues to offer significant and well-targeted support for investment into small and growing companies, in line with new EU rules?. Read more on the Budget 2015:
The next government will also, subject to state aid approval, require that companies must be less than 12 years-old when receiving their first EIS or VCT investment, except where the investment will lead to a ?substantial change in the company?s activity?. It will also introduce a cap on total investment received under the tax-advantaged venture capital schemes of ?15m and increase the employee limit for knowledge-intensives companies to 499 from 249. The requirement that 70 per cent of funds raised under SEIS must have been spent before EIS or VCT funding can be raised will also be removed. By Hunter Ruthven
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