You’ve set up, your product is selling like its going out of fashion, but you need some cash to take you to the next stage. So you go find some commercial venture capital bods to swing some big numbers your way so you can nail that expansion plan.
Trouble is, while you may think quarter of a million is quite a wad, the VCs probably view it as lunch expenses. They are looking for bigger fish to fry. The result? A finance cap that leaves SMEs chewing their fingernails wondering where the investment is coming from.
Fortunately, the government has spotted the problem and a number of projects have been kick-started to sort things out. Chief among these are the enterprise capital funds proposed by the DTI to provide funding in the £250,000 to £2m bracket. The Budget should see detailed plans for trial funds to start in the summer. As a result there is a general air of optimism around that the government is doing something right.
However, the CBI has been quick to point out that the ECFs should not be viewed as a quick fix. In fact, the benefits could take as long to materialise as a decent national transport policy.
In a recent ICAEW publication, Matthew Fell, head of the CBI’s enterprise group, wrote: ‘Much more should be done to enhance interventions to improve access to growth capital in the short-term.’
The crux of his argument is that government needs to sort out the corporate tax regime if it wants to encourage growth and expansion. This is a sound point. One of the biggest deterrents around is not only the mind-melting complexity of the tax system, but the energy sapping effects of the overall tax take.
The CBI has some tidy ideas for countering these, including enhanced income tax relief and levelling the tax benefit playing field between debt financing and equity finance. But dealing with these tax issues would involve the DTI speaking to their colleagues at the Treasury.
Given the turf jealousies between the two, that might be a little bit of optimism too far.
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Baldwins Accountancy Group has continued investment in the north-east and appointed David Fish as a director in its corporate finance team
UK M&A activity bounced back strongly in July and August, according to analysis by the deals practice at PwC.
Smith & Williamson has added Jim Clark and Philip Marsden, of Marsden Clark Corporate Finance Limited, to its corporate finance team.