UK SMEs raise record £1.5bn through Enterprise Investment Scheme

More than £1.5bn has been raised by the UK’s small businesses through the government’s Enterprise Investment Scheme (EIS) across 2013 to 2014 – a 48 per cent increase year-on-year.

The scheme is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase shares in those companies.

2,770 small businesses have secured investment through the scheme so far this year and the data above suggests the number of growing start-ups utilising EIS has reached the highest levels in 15 years.

In addition, the number of start-ups raising investment through the Seed Enterprise Investment Scheme (SEIS) has also risen considerably.

2,030 start-ups have raised money through the SEIS scheme in the last 12 months – a 75 per cent increase on 1,160 companies in the previous year. The total amount raised also soared by 93 per cent year-on-year, from £86.1m to £166m.

Radius Equity, the firm behind these latest figures, has stated that the growing interest in EIS is helping to provide investment for the UK’s small business sector at a time when many are still struggling to secure lending from traditional sources such as high street banks.

Gary Robins, director, Radius Equity, said: “EIS is becoming an increasingly valuable source of capital, especially as bank lending can still be difficult to secure.

“This capital raising is important to ensure small and medium enterprises continue to be a strong engine for economic growth in the UK.

“They employ a huge number of people while stimulating local and regional economic development.”

Date published 2 Nov 2015 | Last updated 4 Nov 2015