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Government initiatives

Confused by which Government schemes could work for your business?  Bobby Lane from accountancy firm Shelley Stock Hutter gives an overview of a few initiatives you may want to consider.

Enterprise Finance Guarantee Scheme

Launched: 2009

Tell me more:

  • Where a business can get a loan (under normal bank lending criteria) but may not have the required security to offer.
  • The Government will guarantee 75% of the loan with the Bank taking the remainder of the risk. Available for businesses with annual turnover of up to £41m seeking loans between £1,000- £1m.
  • Could be useful for anyone looking to set up a business or if your business has been operating for more than 5 years and you are now looking to grow it.

Bobby’s Advice

  • Be prepared. Most businesses get rejected because they are ill-prepared when they meet the participating lenders.
  • At your meeting remember to supply an information pack which includes a detailed business plan, the last three statutory accounts (if applicable) and latest management accounts.
  • Make sure you give the lender the confidence that your business proposals are realistic and achievable and the management team have the right set of experience and skills.

Funding for Lending Scheme

Launched: July 2012

Tell me more:

  • Attempt to reduce lending costs and in turn, increase the flow of credit. Banks are given access to low-cost funding on the condition they maintain or increase net lending. While the initiative has boosted mortgages, there are few signs it is helping small businesses.

Bobby’s Advice:

  • A political hot potato, with some politicians and critics of scheme calling for urgent discussions over how the Funding for Lending Scheme (FLS) can be changed and for the Bank of England to investigate whether its criteria for the scheme are wide enough for SMEs.

Seed Enterprise Investment Scheme

Launched: July 2012

Tell me more:

  • Designed to help small, early-stage companies to raise equity finance by offering a range of tax reliefs to individual investors who purchase new shares in those companies.
  • This is a real incentive for investors to put money into a start up business. They receive an income tax deduction of 50% on investments of up to £100,000 per year as well as other tax breaks.

Bobby ‘s Advice:

  • If you are planning on investing in a business, make sure you use this scheme and, if you are starting up your own business do not underestimate how powerful an incentive it is.

 

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