£95 Million Funding for Small Businesses
Prime Minister David Cameron has announced that £95 million of the Regional Growth Fund (RGF) will be set aside specifically for small businesses to help them grow.
Previously, money from the £1.4 billion fund was only available to firms seeking funding of £1 million or more, but now small firms can apply for any amount up to £500,000. Small firms qualify for the scheme if they are going to invest in new capital assets, such as plant and machinery, and create jobs ― and cannot get normal bank finance.
In addition, small and medium-sized firms will now be able to apply for RGF funding via HSBC, RBS and NatWest banks. However, this initial announcement leaves questions unanswered. Small-business groups have asked for clarification of the terms and conditions under which the money will be distributed, as funding will be linked to loans and subject to the banks’ usual lending criteria.
“It’s good news that some of the money from the Regional Growth Fund is now going to small firms, but we’re disappointed that it looks like it will not be available to all businesses that need finance to grow,”
said John Walker, national chairman of the Federation of Small Businesses.
“It’s clear that grants will only be available to businesses that qualify for bank finance, but we still need greater clarity around the terms and conditions attached to the funding, the forms of business activity that are eligible and a clear indication of where in the UK this scheme will be available.”
The RGF announcement was the chief measure among several initiatives revealed by the Prime Minister to boost the small business economy by helping small firms access finance and get a toehold in export markets.
Under the headings of ‘Finance Fitness’ and ‘Exporting for Growth’, other measures include:
- ‘One-click registration’ on the Companies House website to enable business owners to register their company, sign up for PAYE registration, corporation tax and self-assessment in one place.
- An ‘Open to Export’ web resource to be hosted by Yell and the British Chambers of Commerce
- The National Export Challenge, a series of initiatives to help small firms break into new markets.
- The expansion of the Red Tape Challenge to include regulations which restrict innovation.
- A range of bank initiatives to support exporting by small British businesses.
The Prime Minister added:
“British small and medium-sized enterprises are already doing incredible things, but we urgently need more of them to follow that boldness. We need this to be a country where more people think ‘I can start my own business and I can sell to the world’.”
“Anything that helps people start and grow small businesses is as positive thing. I was particularly happy that the Prime Minister showed support to help get 100,000 small businesses trading overseas. International trade is absolutely critical because we are facing a flat domestic market and yet there’s a growing consumer market overseas.”
British Chambers of Commerce director general John Longsworth added:
“The RGF scheme will help some companies obtain the finance they need to grow, but it’s not a panacea and will not cure the wider problems companies still face in accessing finance. Banks still need to improve relationships with business customers.”