£340m budget boost for Chancellor proposed through Enterprise Investment Scheme

Covid-19 News | Economy & Politics | Funding | South East

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The Enterprise Investment Scheme Association (EISA) is presenting the opportunity for the Chancellor to attract £340m from private investors to support the country’s growing businesses by making some changes to the EIS (Enterprise Investment Scheme) terms in the coming Budget.

The challenging economic situation during 2019 and 2020 has seen a 30% year-on-year reduction of the number of investments in EIS eligible companies, amounting to £341m.

Two key recommendations are proposed by the EISA to reignite private investors’ appetite to back the country’s future winning businesses through the scheme: an increase in the investment limit in the Seed Enterprise Investment Scheme from £150k to £250k; and a change in the eligibility of businesses able to use the schemes from ‘age of the business’ to ‘size of the business’.

Director General of the EISA, Mark Brownridge, said: “Investors have understandably been cautious over the past eighteen months, and as a result many businesses that require investment capital to grow have been unable to do so.

“There does however remain good liquidity in investment funds and in the accounts of private investors who are familiar with the benefits of the EIS based schemes.

“We believe that the Chancellor should be looking to attract private sector investment to boost business expansion where ever possible, and our estimate is that by making just a few small adjustments to the scheme rules up to £340m could be unlocked relatively quickly.”

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