Never has there been a year so challenging, and thus, never a test of business survival that has enabled front-runners and nimble reactors to springboard from the pandemic into phases of survival and growth that many never knew they held. Equally, with e-commerce models sent into trial phase and beta test-runs discarded for the real-deal, online operations became a must-have not a nice to have.
So what will we have left once the smoke has begun to clear? One thing is clear from now, and that’s a chasmic funding gap that falls heavily to the investor community, especially those with institutional sized assets under management.
Private capital from institutional investors is proving to be as important in helping UK businesses survive the pandemic as any government support. Institutional investors in the UK manage £8.5 trillion of assets according to the latest figures. Even 1% of that funding would dwarf the £2.2billion made available to SMEs by the government during the latest national lockdown.
CEO of IW Capital, Luke Davis:
“The size of funds managed by the UK's community of institutional investors demonstrates the potential power that private capital has in helping SMEs survive and grow out of the Covid pandemic. There is no more important section than this to helping small firms stay trading and able to employ the 16 million that the sector accounted for pre-pandemic.
"We, as investors, have a duty to support firms in the good times and the bad. The plight of small businesses during this time is less than reflective of what their business model could have ever predicted. If we can come together to help save businesses now, we could see not only great returns in future but also offer a helping hand to the British economy.
“Making investment and survival funding more easily available to small businesses should be a priority. The last time that the Government-backed EIS was extended, it resulted in a significant jump in private investment into small businesses. Replicating this effect with new, or increased, incentives would provide a much needed boost to a section of the economy that is most in need, and so we hope this will be addressed in the near future.”