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EIS Investment Falls 15% – but New Government Could Help Investors to Back Fast-Growing British Businesses

by Growthdeck Team

23 May 2024


New figures published by HMRC show that the amount of investment made through the Government’s flagship Enterprise Investment Scheme (EIS) has fallen by 15% from £2.3bn to £2bn in the year ended March 31 2023.

Our CEO, Ian Zant-Boer, says that the next Government should consider expanding EIS to help the UK’s tech sector compete with those of other economies.

“A bigger, better EIS could help the UK’s tech sector compete with the US. It’s no secret that raising equity in the US is much more attractive for a lot of tech companies. EIS should play a major part in redressing that balance.”

“Whoever wins the next election should be looking at what it can do to help EIS supercharge growth in the small business sector. This scheme has proven itself over the last 30 years and there is so much more it could do if more businesses had access to that vital equity funding.”

“EIS only covers companies less than seven years old. It would be great to see the next Government provide similar support for businesses outside the current scope of EIS. An eight or ten year old business can have just the same funding needs and potential to grow exponentially. The fact that they can’t get EIS funding means that some aren’t able to deliver the growth they could.”

“Another simple step to take would be raising the EIS investment limit of £1m per investor. That has been in place since 2012. If it had kept pace with inflation, it would now be £1.6m.”

“EIS does a great job of addressing the funding gap that scale-up businesses in the UK face – the ones who need more finance than their banks can provide but aren’t yet big enough for larger PE funds to back.

“Fast-growing SMEs can be the engine that powers the UK economy back to growth. That means more jobs and more tax revenue. Getting them the investment they need is a critical part of making that work.”

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