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Increasing Applications for the EIS

As small businesses continue to run into rejection when looking for funding from their banks, the government is thinking more about schemes and initiatives which enable more businesses to get hold of the funds they need for growth. One such scheme is the Enterprise Investment Scheme (EIS) which is enabling more businesses than ever to access crucial sources of funding that would otherwise be out of reach.

A report, published by Rockpool Investments, sheds light on the increasing numbers of applications to the EIS; “It has been a year since the Government’s radical shake up of the EIS rules made it more attractive to businesses and investors. The changes opened up EIS, allowing bigger companies to become eligible, and the tax incentives were also made more attractive.”

“Access to funding from banks for small businesses remains very difficult. This means that funds raised from private investors under EIS are becoming an increasingly attractive and substantial source of finance. This kind of investment is essential if we are to witness a dynamic and expanding small business sector – something which is critical to our economic well being.”

Rockpool reports that 91% of applications by UK small businesses in 2011/12 were approved by HMRC, up from 89% the previous year. The number of businesses applying also increased 47% in the last year, jumping to 2,147 in 2011/12.

“It is encouraging to see HMRC playing the role of a pragmatic enabler of UK businesses’ gaining access to tax efficient funding” commented a Rockpool spokesperson; “We suspect that the high level of interest from private sector investors in EIS will keep HMRC business going forwards.”

Is your business planning on taking advantage of increasingly attractive government schemes for SME funding such as the EIS? With invoice finance, alternative funding and government schemes, there are plenty of options outside the banks.

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