The Government has today announced a new £20million fund to provide grants to SMEs based in England. The grants, available between £1000 and £5000, will be used for new equipment and technology as well as for specialist advice.
The announcement comes alongside news that the UK is expanding its Covid loan scheme for small businesses, meaning that more small British firms in financial difficulty before the start of the COVID-19 pandemic will be able to access government-backed loans.
Since the start of lockdown SMEs have borrowed over £12billion in government-backed loans. This support network demonstrates the vital importance of this sector that employs over 16 million people in the UK and provides 52% of private sector turnover. Growth finance for this sector has been, since the financial crisis of 2008, hard to come by for many firms - leaving private finance and investment providers to pick up the pieces.
Luke Davis, CEO and Founder of SME investment firm IW Capital, commented on the announcement:
"Any new grants for small businesses are a welcome addition to the support already available for the arena but the vast majority of growth finance in this sector will have to come from private, rather than public, sources. As investment providers we have a responsibility to help ambitious entrepreneurs and business leaders to grow and scale, creating jobs and boosting economic growth in the process.
The extent of Government loans - especially the bounce back loan scheme - has seen over a million firms go into debt and has led many to call for a suspension of payments until they return to profitability. Among the businesses that took out these loans there will be thousands that will roar back to trading and growth if given the opportunity, they will be the drivers of economic recovery.
With an economic contribution of over £2trillion, the success of the UK economy as a whole may in future hinge on the prosperity of SMEs, start-ups and high-growth firms. We have seen that businesses have been eager to grow and strive in a post-COVID economy and as businesses prosper once again, confidence in the UK economy as a whole will grow."