Increase in small businesses planning to raise money through EIS
The number of small businesses planning to raise money under the Enterprise Investment Scheme (EIS) rose from 2,965 in 2019/20 to 3,245 in 2020/21 – representing a near 10% increase according to a report from Growthdeck. As part of a long-term government initiative, EIS Investments encourage investors to buy shares in new or young businesses.
With significant obstacles affecting the business world, SMEs are looking to utilise the EIS scheme to continue to progress. Since its inception in 1994, the Enterprise Investment Scheme has raised over £24 billion in funds for almost 33,000 companies. This trend continued into 2021 with a total of £1.65 billion of investment being raised by small businesses. With over 6 million SMEs in the UK, making up 99.9% of private sector businesses, EIS is an essential tool to accelerate the country’s SME landscape. Providing such pivotal support to the backbone of the economy, if the EIS scheme were given greater muscle to assist startups and scale-ups to traverse the challenges posed by the current economic arena, it could provide a boost for the UK economy as a whole.
The EIS could be an important trend throughout 2022. It can provide SMEs with much-needed investment to give them a platform to grow, whilst providing investors with tax relief to incentivise this investment. Small businesses and SMEs throughout the UK have benefitted enormously from the EIS in the last 25 years, fuelling growth and job creation at an impressive scale.
There is a huge amount of ambition and talent throughout the UK small business ecosystem, and it is an exciting time for SMEs, both from an investing and business standpoint. At IW Capital we are always searching for and looking to invest in small businesses through the Enterprise Investment Scheme to aid their growth journey and provide them with the opportunity to thrive and succeed. It’s great to see the current flourishing UK SME market and the consistent increase of SMEs utilising the Enterprise Investment Scheme which is set to continue for the rest of 2022.