The government has recently announced that the Seed Enterprise Investment Scheme (SEIS), which is designed to help small, early stage companies raise equity finance, has, since its inception in 2012, helped over 1,100 companies to raise the money they need to grow or expand.
Recent analysis has revealed that companies have raised more than £82 million in funding through the scheme. An average of £1.3 million of SEIS funding is raised by around 19 companies each week through the scheme and the average investment is over £70,000.
SEIS enables companies to raise up to £150,000 of equity finance, this funding is in return for an agreed shareholding in the company. This provides vital early stage capital and offers an alternative or addition to bank lending, as well as potential access to angel investors that can offer invaluable business experience. It also offers tax relief to investors buying shares in small companies at a very early start up stage.
Research published by HM Revenue and Customs shows that users and their agents felt the companies would not have been able to realise their achievements without the help from SEIS and some admitted that they would not have been able to raise the funding elsewhere.
SEIS build on the long-standing Enterprise Investment Scheme (EIS) which provides tax reliefs for investors in small, high-risk companies.
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