Budget 2015 includes new 'Help to Grow' pilot
19th March 2015 | News
Chancellor, George Osborne has sought to increase the supply of growth loans to businesses within his Budget 2015 speech, revealing details of a new “Help to Grow” pilot programme.
The scheme discussed during Mr Osborne's Budget 2015 summary, which is set to deliver up to £100m of capital to growing firms, will offer growth loans to business owners requiring £500,000 - £2 million to help them “achieve their potential”.
The British Business Bank will run the pilot, which will target a minimum of £100 million of new lending focused on alternative lending approaches.
Keith Morgan, CEO, British Business Bank, said: “We know from British Business Bank research that almost half of UK firms (46 per cent) want to expand this year yet there is a market gap for smaller businesses seeking finance in the £500,000 to £2m range.
“Growth Loans have been designed to target that market failure in access to finance – we estimate as many as 500 businesses a year might be suitable for a Growth Loan.
“We are inviting proposals for partners to help deliver this scheme, to ensure more smaller businesses in the UK can access the finance they need to scale.”
The Business Bank has outlined two alternative lending approaches which involve co-investing private money alongside public money, along with private money supported by a structured government guarantee to encourage increased lending.
Mr Osborne also announced changes to the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs).
These amendments are designed to “ensure that the UK continues to offer significant and well-targeted support for investment into small and growing companies, in line with new EU rules”.
Subject to state aid approval, the next Government will require that companies receiving their first EIS or VCT investment must be less than 12 years-old; except where investment will result in a “substantial change in the company’s activity”.