Also, the study from Radius Equity shows that small and medium-sized enterprises (SMEs) raised £1.46 billion of funding through the Enterprise Investment Scheme (EIS) over the year, an increase of 41 per cent, reaching its highest-ever level.
Latest figures from HMRC reveal that the number of businesses raising funds from private investors through EIS has increased by 10 per cent, from 2,465 in 2013 to 2,710 last year.
Some 1,995 businesses raised funds through the SEIS in 2014, up from 1,155 (an increase of 73 per cent), and 1,695 businesses raised funds through the SEIS for the first time in 2014.
Commenting on the figures, Gary Robins, director at Radius Equity says that EIS and SEIS are proving increasingly popular amongst investors, as they are now just two of the few government-endorsed investment schemes with generous tax breaks.
‘The tax breaks the government has put in place are attracting huge numbers of start-ups and investors which is encouraging growth and proving a boost to the economy.
‘These figures highlight the growing investor interest in small business investing. Investors are also benefitting from a wider choice of businesses to invest in, with private investors able to pick and choose from the businesses they think are most likely to deliver them the best returns.’
Robins adds that EIS is doing what so many other initiatives have failed to do – get increased funding to SME businesses.
‘[It is] a vital part of the economy that has seen its funding through banks loans fall dramatically and continuously since the credit crunch,’ he says.
Further reading on business funding
