EEF Chief Economist
, Steve Radley, said
“The innovative package of measures to improve access to finance will give small and growing businesses greater flexibility in attracting the funds they need to invest in innovation and growth. This comes an especially opportune time given the current credit crunch.”
Commenting on specific measures:
Small Firms Loan Guarantee Scheme (SFLG)
As EEF called for in its Budget submission, extending the eligibility of the SFLG to all enterprises regardless of age or ownership will benefit those businesses looking to invest in growth and innovation but lacking the collateral or track record to get funding from their bank. And, given the current credit market conditions, EEF also believes that the one year, 20% increase in SFLG funding is a welcome sign of government flexibility in supporting small and growing businesses struggling to attract finance.
Mezzanine Finance
EEF supports the additional £30m for providing mezzanine finance through the SFLG and the Enterprise Capital Funds (ECF). In particular, this is an attractive means of providing greater debt finance for businesses without requiring them to sacrificing an equity stake and the focus on mezzanine finance will give businesses greater choice in financing.
Enterprise Investment Scheme
EEF believes that making the Enterprise Investment Scheme (EIS) more flexible has the potential to enable businesses to attract financing from a wider range of private investors, especially business angels. EEF welcomes the changes to the EIS announced in the Budget and looks forward to working with the government’s consultation on how to enhance the EIS.
ENDS