Although I firmly believe that our nation’s entrepreneurs and small and medium enterprises (SMEs) need to look after themselves, it seems that the need to support small, well managed businesses is finally being taken to heart. In connection with this, there have been some interesting announcements in recent weeks.
In case you have missed them, here are some of the headlines:
- A new company, UK Finance for Growth Ltd (UKFG), has been established to manage and coordinate the delivery of finance to SMEs. The range of funding will be from £25,000 to £10 million and funding will be in the form of debt, equity or mezzanine funding. Over time, it will bring together all of the existing SME finance schemes including the Enterprise Finance Guarantee and the newly announced Growth Capital Fund – a total of around £3.5 billion. This is a welcome simplification.
- The new Growth Capital Fund (part of UKFG) has been created to address the funding gap identified by the Rowlands Review of Growth Capital which was published in November 2009. Starting with a total of £200 million and an ambition to grow this to £500 million, it will provide funding for SMEs seeking between £2 million and £10 million, with the first investments being planned for the autumn. We have met with Chris Rowlands and this is a good initiative.
- Over the next year, RBS and Lloyds have agreed to provide a total of £94 billion of new business loans. Of this, apparently nearly half is earmarked for SMEs. Will they achieve it?
- From December 2010, there will be a new portal providing access to Government contracts, with relevant contracts flagged as SME friendly. The aim is to increase Government procurement from SMEs by 15% to a total of around £23 billion. This is still only around 10% of the Government’s annual spend, so hopefully there will be much more to come.
- Although taxes are increasing to pay for our nation’s profligate spending, the Budget introduced some welcome tax breaks for entrepreneurs and SMEs. There have also been some interesting developments at Royal Mail, where a decision by the European Court of Justice means that many businesses may be able to reclaim VAT on the cost of a number of Royal Mail services, including Parcelforce. Make sure you don’t lose out – there’s more about all this in today’s articles.
Whatever the colour of the future political landscape, this entrepreneurial momentum will continue. The importance of smaller businesses to the future well-being of our economy is increasingly being recognised and it’s something we all need to champion at every opportunity!