SMEs suffer £1 billion funding gap, despite £126 billion in untapped private investor finance

More than a third of investors with £100,000 would invest in the UK’s SMEs but do know enough about funding to do so

funding

According to a report from IW Capital, 34% of the UK’s serious investors would invest in SMEs but do not have the knowledge about funding to do so. This equates to £126 billion in untapped private investment funds.

The lack of awareness is despite the fact that 71% of private investors with more than £40,000 worth of investments feel confident in the growth capabilities of UK SMEs and 54% are looking to the Enterprise Investment Scheme (EIS) for the new tax year.

This is despite David Cameron’s 2015 pledge to fill a £1 billion funding gap that is preventing the growth of UK SMEs, caused in part by institutional lending reducing at a rate of £5.7 million a day.

George Osborne’s latest Spring Budget focused heavily on the micro-businesses of Britain’s private sector, but did not do enough to educate high-net-worth individuals as to how they can invest in upscaling SMEs.

Given the high levels of confidence and subsequent intentions ahead of the imminent new tax year on April 6th, the research further analysed investor sentiment towards one of the last private equity initiatives supporting SMEs – EIS.

There are 64% of investors who intend to invest between £100,001 and £250,000 looking to this scheme for their investment plans. Moreover, 54% of investors with more than £40,000 in portfolio size (not including their mortgage or pensionable assets) will do so imminently for the 2016/17 financial year.

Accounting for 16% of the UK taxpayer population, this high-earner group contributes a disproportionate 67% of the country’s income tax bill. IW Capital’s research of 2,000 relevant people examines just how much income tax the UK’s high-earners pay in comparison to the national average, with a focus on specific investor sentiment towards EIS.

Monty (707 Posts)

Monty Munford has more than 15 years' experience in mobile, digital media, web and journalism. He is the founder of Mob76, a company that helps tech companies raise money and exit. He speaks regularly at global media events with a focus on Africa, writes a weekly column for The Telegraph, is a regular contributor to The Economist, Wired, Mashable and speaks regularly on the BBC World Service.


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About Monty

Monty Munford has more than 15 years' experience in mobile, digital media, web and journalism. He is the founder of Mob76, a company that helps tech companies raise money and exit. He speaks regularly at global media events with a focus on Africa, writes a weekly column for The Telegraph, is a regular contributor to The Economist, Wired, Mashable and speaks regularly on the BBC World Service.