Government finance schemes
Most government finance schemes are now run by the British Business Bank. These include :
- Start-Up Loans – Provides advice and start-up finance (average loan size £6,000) for anyone looking to start and grow their own businesses.
- Enterprise Finance Guarantee (EFG) Scheme – Provides lending to viable businesses that have been turned down for a loan or other form of debt finance due to inadequate security or a proven track record.
- Enterprise Capital Funds (ECFs) – Provides more than £400m of venture capital investment to address the equity gap for early stage innovative SMEs with the highest growth potential.
- Business Angel CoFund – The £50m Fund invests with syndicates of business angels who are interested in investing in SMEs in qualifying areas of England.
- UK Innovation Investment Fund – Supports the creation of viable investment funds targeting UK high growth technology-based businesses.
- Aspire Fund – A £12.5m fund targeting support for women-led businesses across the UK.
Other types of finance include :
- UK export finance – Provides trade credit insurance to exporters and guarantees banks to support UK companies wanting to export.
- Grants – Though harder to come by these days, grants from national and European government funds are also available to businesses though they can be very specific to sector and geographic location. Find out how we help Forum members search and apply for grants.
- Community Development Finance Institutions (CDFIs) – Government also part funds CDFIs, which provide financial support and capital to businesses that have a social impact on communities but have been refused support by mainstream finance providers. The average loan to micro businesses is £7,250 and £50,000 to small businesses.
Advice and support
- GrowthAccelerator – This service aims to help up to SMEs achieve high growth potential over three years. Working with an experienced coach, qualifying businesses receive a focused growth plan, masterclasses, networking and peer-to-peer support from a high growth community. SMEs can also benefit from developing their leadership and management capability.
- Growth Voucher Scheme – Makes funding available to small firms to put towards the cost of receving strategic business advice. The scheme will cover half the cost up to a value of up to £2,000.
- Innovation Vouchers – Businesses can also get up to £5,000 as a grant from the European Union, which allows them to work with an external expert for the first time in order to to acquire new knowledge or technology.
- Mentorsme – This government-supported scheme gives SMEs a way to find quality-assured business mentoring services based on their business stage and location.
Tax reliefs for entrepreneurs
- Capital allowances – You can't deduct the cost of assets (i.e. vehicles, machinery) for use in your business from your trading profits, but you may able to claim a capital allowance instead. This gives tax relief for the reduction in value of qualifying assets by letting you write off their cost against the taxable income of your business.
- Research and development tax relief – This offers companies involved in research development tax relief on income. To qualify, a limited company must be involved in an R&D project which seeks to "achieve an advance in overall knowledge or capability in a field of science or technology". The rate of tax relief for research and development costs is 225%. This means that, for every £100 spent on qualifying R&D costs, a company could have the income on which Corporation Tax is paid reduced by an additional £125.
- Entrepreneurs’ relief – This allows business owners to claim relief on qualifying capital gains made when all or part of a business is sold, or the assets of a business after it has stopped trading shares in a company.
- Environmental incentives – Government is also backing initiatives to encourage businesses to install renewable energy sources. Schemes include Feed-In Tariffs (FITs) and the Renewable Heat Incentive, which allow businesses to make money from creating their own ‘green' heat and electricity. Some grants are available for investment in these schemes and capital allowances can also be claimed.
For further advice on any issue covered in this article, or to find out how we can help you access finance, Forum members should call our helpline on 0845 130 1722.
Since the demise of Business Link back in 2012, it may seem that support from government for small businesses is a bit thin on the ground. But various schemes do exist to help start-ups, sole traders and small businesses – it can just be a bit of a pain trying to find them! To help you out, we keep a list below of all the main finance initiatives from the Department for Business, Innovation and Skills and information on tax reliefs that may be applicable to your business.