Government commits to helping SMEs with funding

SMEs are responsible for 60 per cent of Britain’s jobs and half of GDP. Sixty-six per cent of SMEs are ambitious to grow within two to three years but only 20 per cent expand their workforce each year.

Today’s Summit for Small Business in London, hosted by small business minister Mark Prisk, saw the government commit to the Enterprise Finance Guarantee (EFG) for the next four years, making around £2bn available to viable small companies without a credit history or collateral. It will also be easier for small and specialist lenders, such as Community Development Finance Institutions to lend under EFG.

Similarly, the government will commit a further £200m to Enterprise Capital Funds supporting equity investments in the highest growth-potential businesses over four years. The first of the new funds are expected to be invested early in the new year.

To encourage ‘business angel’ investments government has welcomed a joint bid of business angels and the government’s SME investment arm, Capital for Enterprise, for a co-investment fund as part of the Regional Growth Fund to support investments into early-stage SMEs.