20 August 2015 09:00
IoD urges government to better promote enterprise schemes
The Institute of Directors (IoD) wants the Government to better promote the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) to make it easier for more people in the UK to invest in new and growing businesses.
The IoD believes the schemes "have the potential to unlock billions of pounds in business investment and create a new generation of investors". Figures published recently by the Government show that more than £1.5bn was invested in some 2,700 companies through the schemes in 2013/14, involving more than 100,000 investors.
The IoD plans to release a report next month detailing how the Government can expand both schemes to "tap in to the great appetite for investing and growth in the UK's alternative finance markets".
Jimmy McLoughlin, IoD Deputy Director of Policy, said:
"Rapid growth in the take-up of both EIS and SEIS by companies and investors shows they have the potential to unlock billions of pounds in business investment. More than 100,000 people invested in a company through the schemes last year, but there is no reason that number cannot be ten-times as high, particularly as companies raised only £150m through SEIS, which was introduced in 2012.
"With Britain leading the European alternative finance market, entrepreneurs in the UK can raise funds in more ways than ever. As traditional bank finance dried up, businesses in search of capital and investors hungry for returns looked elsewhere, and avenues such as crowdfunding and peer-to-peer lending boomed."
"Now is the time to open up the nascent 'equity economy' beyond the wealthy and well-connected in the South East, ensuring businesses and investors across the country can benefit from these focused incentives. Investing in a business should be as easy as opening an ISA. But for millions of people this isn't the case. The process is excessively complicated, time-consuming and daunting.
"The Government needs to play its part in encouraging a step-change in the way investment schemes are regulated. EIS and SEIS should be actively promoted and made as simple as possible to invest through. If the Government is serious about helping small businesses scale up, then these are vital first steps."