EIS and the SME Arena post-COVID

30th July 2020

Statistics have shown that the UK’s economy grew by 1.8% in May, when Coronavirus lockdown measures were still at their strictest. The growth gives hope to businesses across the nation who have experienced financial difficulty over the past few months and are now looking to grow. This news is surely welcomed as lockdown measures are beginning to lift and firms and retailers are slowly able to resume trading with an element of normalcy. With it, the easing of lockdown ushers in a new range of exciting opportunities for private investors.

 

Small and Medium-sized Enterprises (SMEs) will be absolutely key to the state of the economy in both the near and distant future, as SMEs account for 52% of annual turnover in the UK, meaning their growth is closely linked to the economy as a whole. In other words, the health and wealth of SMEs will directly affect the state of the UK economy and its recovery in a post-Coronavirus world. To help with this through the lockdown period, IW Capital was able to raise £10 million for eco-friendly packaging firm Transcend Packaging, £2 million for on-demand doctor service GPDQ, as well as supporting the development of a new event space in Hove, called Rockwater. These types of regional investments especially will help to catalyse the economy and ensure it returns to strength quickly.

 

Investing in high-growth companies is a vital part of helping the SME arena to thrive in the future. The UK has some of the best, brightest and most ambitious entrepreneurs and innovators in the world, who offer myriad opportunities to disrupt and challenge a range of sectors. In the last year IW Capital has seen a record amount of deal flow in terms of the number of business looking for investment and a huge appetite from our investor base to support small businesses, which reflects how truly important this sector is to the nation’s economy.

 

The use of tax efficient Government schemes, such as the Enterprise Investment Scheme (EIS), make the investment in small firms all the more appealing to private investors. The small business community has perhaps been the most affected through this period; and as one of the sectors most reliant on private investment, investors must rise to the challenge and support the ambitious eco-system of entrepreneurs that exists in the UK. Schemes such as the Enterprise Investment Scheme have been a hugely important source of finance for start-ups and scale-ups in the last 25 years, providing £20 billion of growth capital to businesses otherwise rejected by traditional finance sources. In fact, in 2017/18 the EIS experienced the highest amount of investment ever, with close to £2billion of support for growing start-ups and scale-ups.

 

IW Capital is keen to help SMEs that need assistance to plan for the future and find the right kind of investment in order to help them reach the next level.

 

To find out more about IW Capital, or for more information on investment and non-executive opportunities, please speak to a member of the IW Capital team today on 020 7015 2250, or email info@iwcapital.co.uk