Record number of start-ups apply to raise funds through government scheme
A record 2,905 start-ups applied to raise funds through the government’s Seed Enterprise Investment Scheme in 2014/15, up from 2,845 in the previous year and only 1,729 the year before.
This is according to figures from Radius Equity, a specialist provider of EIS and SEIS investments.
Director Gary Robins said: “Record numbers of entrepreneurs are choosing to start or expand their businesses, and SEIS is proving a vital source of funding for start-ups at a time when bank lending is still hard to secure for many SMEs.
“SEIS is boosting the growth of the flat white economy in particular. Hi-tech and restaurant/catering sector businesses account for a large proportion of fundraising under the scheme.”
In total, 94% of the businesses whose applications to HMRC for SEIS approval were processed last year were successful, up slightly from 93%. Radius Equity says that this shows that the vast majority of aspiring entrepreneurs using SEIS are putting clear business plans in place in advance of beginning to trade.
Gary continued: “SEIS and EIS have been the most successful government initiatives in driving investment into small businesses. Incentivising private investment into SMEs has allowed greater flexibility in capital raising for businesses, while providing better returns for investors.”