A Third of Small Tech Businesses are Seeking Finance to Accelerate Growth

Traditional funding remains the main source of finance for small and mid-sized technology firms Small and mid-sized tech businesses displayed optimism in a recent survey of 500 business owners, with 32% admitting they plan to seek finance in order to meet growth plans. Traditional funding is still the preferred route, with 42% accessing capital through a finance institution last year and 41% doing so via the bank. Other finance solutions named in the survey, which was conducted by accounting group Crunch, included private investors (26%); crowdfunding (16%); family and friends (13%), and government grants and support schemes (9%). However, while firms are keen to borrow, institutions are still reluctant to lend. 42% of the firms who applied for capital through financial institutions were d... »

Lord Young Declares ‘Golden Age’ for Small Businesses

The prime minister’s enterprise advisor analyses the changing face of UK enterprise in new report Lord Young is optimistic about the future for small businesses, announcing they are entering a ‘golden age’ in a new report published yesterday. The Report on Small Firms 2010-2015 was compiled to analyse the UK business landscape and highlights business growth, the factors that impact small firms, and the government’s future support plans. Young, who acts as David Cameron’s advisor, revealed the huge increase in the number of small businesses, up by 760,000 and now equalling around five million in total. The report also underlined a record number of people in work (30.8 million) and a rise in firms with a social ethos – with social businesses presently accounting for 6% of UK enterprises. In ... »

Small and Medium Firms Raise over £1bn in Investment through EIS tax incentive scheme

More than a thousand start-ups obtain finance through the Seed Enterprise Investment Scheme The government’s Enterprise Investment Scheme (EIS), which launched in 1993 but was revised in 2012, has funded 2,400 small and mid-sized firms with investment totalling over £1bn, according to a new report. Additionally, EIS sister programme the Seed Enterprise Scheme (SEIS), which launched in 2012, has been found to have backed funding in 1,120 start-ups with investment totalling£83.7m altogether. In 2012 the government reformed EIS, enabling investors to fund larger businesses with more investment and to receive better tax breaks. The changes included increasing the maximum investment to £1m, eligibility to companies with staff numbers of up to 250 and revenues to £15m. Since the changes were int... »

Majority of Investors Still Unaware of Small Business Tax Relief Schemes

Only 11% of survey respondents would invest in a UK start-up as report reveals lack of knowledge of government schemes EIS and SEIS According to a new report conducted by YouGov, only 13% of small business investors are aware of available government tax relief schemes. Despite widespread coverage and an increase in the number of small businesses making use of schemes, the investment community remain unaware of schemes such as the Enterprise Investment Scheme (EIS) and The Seed Enterprise Investment Scheme (SEIS). Launched 10 years ago, EIS provides an initial 30% tax relief on investments up to £1m for companies not listed on the stock market. SEIS targets early seed-stage companies and offers investors 50% income tax relief. There is no capital gains tax on profits or inheritance tax for ... »

80% of Small Businesses Successful in Acquiring Finance

Funding optimism up as a third of small businesses plan to apply for finance next year and focus shifts from survival to growth 80% of small and mid-sized businesses successfully received funding this year, according to the latest research conducted by Albion Ventures, increasing from 71% in 2013. However, despite the 9% increase in success rates, the research found that the number of small and medium firms applying for finance had dropped from 17% to 10% this year. The findings also revealed a wider shift in focus for small businesses from survival to business development, demonstrating a “healthier business environment” – with a focus on growth. 27% of businesses raised finance to develop their businesses and an additional 23% to expand their premises – up from 5% last year. Additionally... »

How to Attract Small Business Investment: 10 Top Tips

How to Attract Small Business Investment: 10 Top Tips

If you’re running a small but growing company, seeking an equity investor to fund your business can seem like a time consuming exercise and a distraction from your daily management functions. However, if you want to accelerate your business growth, it’s often the only option you’re your burgeoning company. To maximise your chances of success, follow these top 10 tips, designed to help keep raising finance as smooth a process as possible. Have a well written business plan Investors are looking for a transparent, fundable business that can provide them with the returns they require. Check that your business plan is clear, to the point, and that it concisely outlines the product/service and its route to market. Less is more and too much technical detail is a turn-off. Have the right peo... »

Half of UK Start-Ups Rejected for Finance Told they Hadn’t Been Trading for Long Enough

Study finds 44% of small businesses are self-funding to raise necessary capital Almost half of the UK’s small and medium businesses rejected for finance were turned down because they hadn’t been trading for long enough, according to a new study by invoice finance provider Bibby Financial Services. Surveying over 1,000 businesses, the research found that 44% of start-ups had used their own savings or borrowed money from friends or family after being turned down for funding from banks and investors. The study also found that in the last year alone one in five small and medium enterprises have been rejected for funding. Bibby Financial Services CEO, David Postings, discussed the research: “Accessing finance is still a challenge for a large number of viable businesses. “The fact that half of t... »

Small Businesses Using the Enterprise Investment Scheme Jumps 16%

Record numbers of small and mid-sized businesses looking to Enterprise Investment Scheme for funding Small and mid-sized businesses receiving funding through the Enterprise Investment Scheme (EIS) rose a record 16%, with 372 more businesses using the scheme this year than 2011/12. A report by Chancery Investment Partners (CIP) shows that applications for funding through EIS by small and mid-sized businesses has increased consistently since 2008 but this year’s increase, which witnessed the number jump to 2,718, has been the biggest increase to-date. HMRC latest data revealed that the amount raised also reached a record high at £1,017m. EIS is designed to encourage private investment in smaller companies by offering investors generous tax breaks. In 2012 the government reformed the scheme, ... »

Small Businesses Granted Over £40m in Bank Loans via Appeals

Report reveals Appeals Process helped revoke over a third of rejected small business loans Over the last three years, small businesses have received a total of £41.7m through the independent business loans appeal process, it was announced this week. The report, conducted by independent external reviewer Professor Russell Griggs OBE, showed that a total of 3,518 appeals were made this year, rising from 3,311 last year and resulting in £13.1m of lending going into the small business community in 2014. Over the three years that Griggs has been reviewing the process, there has been 9,006 small business loan appeals processed and 3,274 of these were reapproved (36.4%). The report also highlighted the main reasons why businesses were declined loans; failed credit score is the highest at 43%, fol... »

Sources of Funding for Small Business

Once you have exhausted the 3 F’s (Friends, Family and Fools!) for funding your business – where else might you look? In the current climate, funding is still available, however the criteria for obtaining money into your business may be more stringent. Finance for business can be obtained through a number of different sources summarised below: Loans Loans are an excellent source of finance if you have suitable security to borrow against or a reliable earnings stream. This needs to be planned and presented well to obtain funds. Credit cards – Provides up to 56 days free credit if you play the game – otherwise the cost of borrowing is high and not recommended. Overdraft – Banks can be surprisingly supportive when presented with a well thought through plan; albeit the ... »

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