Industry survey indicates impact of COVID19 on growth businesses needing investment

by Startacus Admin

Growth businesses currently seeking investment need UK government support, EISA Survey suggests...
The Enterprise Investment Scheme Association (EISA) has undertaken a survey with 250 growth businesses currently seeking investment, and it indicates that more than 9 out of 10 of them will close down within the next 12 months if their current investment plans, disrupted by the coronavirus crisis, fail to materialise.
The survey covered businesses currently in discussion with investors, with nearly 80% in the £50,000 to £2m bracket and 4 out of 5 reported that the current disruption has impacted their plans either ‘a lot’ or ‘a great deal’. In fact, over 70% said that they now expect to receive less than 40% of the investment they need to develop their businesses.

The EISA is lobbying the Chancellor to increase the tax relief available to private investors for investments in qualifying Seed and Enterprise Investment Scheme businesses to 60% and to extend the scheme, for the period of the crisis. The view is that this could attract a further £200m of private investments into the businesses that could well represent the future of the UK’s unicorns.
Mark Brownridge, Director General of the EISA, commented,

The evidence we have in the survey showing that nearly two thirds believe that relaxing the EIS rules would lead to an increase in equity funding, emphasises that the Government needs to act now, and we strongly encourage them to consider the request we have put to them to provide short term additional reliefs to investors without delay.”
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Published on: 7th April 2020
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