Tag Archive for SME funding

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Investment lies in hands of pension holders, says Sunak

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

EXCLUSIVE: The key to small business investment lies in the hands of those who pay into pensions, chancellor Rishi Sunak said this afternoon.

Mr Sunak said that it was up to everyone who pays into a pension to tell pension funds that they want some of their money invested in technology start-ups.

“Making sure these companies have access to capital is critical,” said Mr Sunak.

>See also: Nearly 17% of small businesses at risk of insolvency

The chancellor, who hosted the first Treasury Connect event in East London this afternoon, was in listening mode, taking in the observations of Pension Bee founder Romina Suvova, who said it was difficult for institutional invest to put money into unquoted companies.

One takeaway from the event, which brought together tech founders with Treasury mandarins, was the three-way disconnect between tech start-ups, which need investment – especially at the later stage – institutional pension funds and the public, who would support a small percentage of their pension to support fast-growth businesses.

The UK’s pension funds control £4tr of cash paid in by up to 30m people through workplace pensions, making the UK the second-largest pension

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Hot Business News Today

Investment lies in hands of pension holders, says Sunak

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

EXCLUSIVE: The key to small business investment lies in the hands of those who pay into pensions, chancellor Rishi Sunak said this afternoon.

Mr Sunak said that it was up to everyone who pays into a pension to tell pension funds that they want some of their money invested in technology start-ups.

“Making sure these companies have access to capital is critical,” said Mr Sunak.

>See also: Nearly 17% of small businesses at risk of insolvency

The chancellor, who hosted the first Treasury Connect event in East London this afternoon, was in listening mode, taking in the observations of Pension Bee founder Romina Suvova, who said it was difficult for institutional invest to put money into unquoted companies.

One takeaway from the event, which brought together tech founders with Treasury mandarins, was the three-way disconnect between tech start-ups, which need investment – especially at the later stage – institutional pension funds and the public, who would support a small percentage of their pension to support fast-growth businesses.

The UK’s pension funds control £4tr of cash paid in by up to 30m people through workplace pensions, making the UK the second-largest pension

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Just 25% of cash earmarked for £20m Brexit Support Fund applied for

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Originally written by Timothy Adler on Small Business
Less than 25 per cent of the £20m Brexit Support Fund promised to help small business get through Brexit transition has been applied for.
Actual applications for the Brexit Support Fund have fallen far short of initial interest and the scheme due to end in weeks before July.
HM Revenue & Customs has only received fewer than 3,000 applications for the £2,000 grants since March, totaling £4.3m. HMRC had been expecting around 10,000 applications.
>See also: Small business to spend £23bn this year alone keeping Covid safe
According to the Times, businesses are being asked to jump through too many red tape hoops when applying for the Brexit grant.
Michael Gove, the Cabinet Office minister, launched the Brexit Support Fund in March, accepting that businesses needed support to “adjust” to the new import controls, which will be fully introduced on July 1.
The Institute of Export and International Trade, which is providing training under the scheme, said that demand from businesses for support with overseas trading remained strong.
A spokesman put the lower than expected take-up of the scheme, which is open to applications until the end of this month, to the complexity of the process, which is being administered

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Qardus opens Islamic finance to small business for first time

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Originally written by Timothy Adler on Small Business
Qardus, the first small business Islamic finance platform in the UK, hopes to arrange up to £2.5m worth of funding over the coming year.
The crowdfunding platform, which launched last July, offers sharia-compliant Islamic finance to any small business, whether it is Muslim-owned or not.
Muslim-owned SMEs are an underserved market in Britain, as they are forbidden to borrow money or pay interest under Sharia law yet still need to grow.
>See also: Sharia start-up funding boom as UK leads in Islamic finance
An estimated 3.3m Muslims live in Britain, many of whom need to grow their small businesses but are prohibited under Sharia from borrowing from high street banks. (The word “Sharia” means a well-trodden pathway to water, although in this case it means religious legislation.)
So far, Qardus has arranged nearly £320,000 worth of Islamic finance for five small business owners, including a property firm, a chemist and a dental practice.
Firms can arrange anything between £25,000 and £200,000, which they repay over up to 36 months.
Around 750 individual investors have signed up for the Qardus crowdfunding platform.
Just as Muslim-owned microbusinesses do not really have anywhere to turn for Sharia-compliant finance – most of the big Islamic

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Using Islamic finance for your small business – what is it?

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Originally written by Timothy Adler on Small Business
What is Islamic finance?
Islamic finance is a means of funding or banking money in a way that respects the principles of Sharia law, guided by Islamic economics. In Arabic, Sharia means the clear, well-trodden path to water. The fundamental principle of Islamic finance is to avoid any financial activities which could be deemed either harmful (Haram) or risky for the user.
The main difference between Islamic finance and standard finance is that charging interest in forbidden. Conventional banks and lending facilities earn money by charging fees and monthly interest charges for borrowers.
The principle features of Sharia-compliant finance are:

A ban on what the Koran refers to as “riba” and we would call paying interest
Sharing losses as well as profits

What is Sharia-compliant finance?
Sharia-compliant finance bans excessive risk or uncertainty, as well as restricting any form of gambling or speculation.
Businesses involved in the activities below cannot use Islamic finance:

Alcohol
Gambling
Tobacco
Pork
Entertainment such as music, TV or cinema
Pornography
Arms sales

Do you have to be Muslim to use Islamic finance?
No, you do not have to be Muslim as long as your business is halal (allowed) or promotes a social good.
What kind of small business suits Islamic finance?
Islamic finance dictates that a business

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Hot Business News Today

Qardus opens Islamic finance to small business for first time

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Originally written by Timothy Adler on Small Business
Qardus, the first small business Islamic finance platform in the UK, hopes to arrange up to £2.5m worth of funding over the coming year.
The crowdfunding platform, which launched last July, offers sharia-compliant Islamic finance to any small business, whether it is Muslim-owned or not.
Muslim-owned SMEs are an underserved market in Britain, as they are forbidden to borrow money or pay interest under Sharia law yet still need to grow.
>See also: Sharia start-up funding boom as UK leads in Islamic finance
An estimated 3.3m Muslims live in Britain, many of whom need to grow their small businesses but are prohibited under Sharia from borrowing from high street banks. (The word “Sharia” means a well-trodden pathway to water, although in this case it means religious legislation.)
So far, Qardus has arranged nearly £320,000 worth of Islamic finance for five small business owners, including a property firm, a chemist and a dental practice.
Firms can arrange anything between £25,000 and £200,000, which they repay over up to 36 months.
Around 750 individual investors have signed up for the Qardus crowdfunding platform, attracted by projected annual returns of anything between 12 per cent and 16 per cent.
Just as Muslim-owned microbusinesses do

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Why Rishi Sunak is going to be good for small business

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Originally written by Timothy Adler on Small Business
Forget about the fact that you probably could not have a finer education – our new chancellor won a scholarship to Winchester College, a dauntingly intellectual public school – where he became head boy – followed by graduating with a first in politics from Oxford University and then an MBA at Stanford, probably America’s version of Cambridge. (Our dear prime minister scraped a 2:1 while at Oxford, mainly down to his laziness.)
And it’s nothing to do with him being the son of a shopkeeper pharmacist and her GP husband, who experienced the day-to-day hardscrabble of running a family business. (They had their future chancellor son do the bookkeeping.)
No, the reason why new chancellor Rishi Sunak bodes well for small business is because of a paper he wrote for free market-leaning think-tank Centre for Policy Studies three years ago.
In it, Sunak – then an ordinary MP for Richmond in Yorkshire – argued that the government should support the creation of an investment exchange for SMEs, where ordinary savers like you and me could lend money to small businesses, trading bonds like shares.
This Retail Bond Exchange would generate fresh capital for SMEs, while at the

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5 reasons why SEIS/EIS is the best funding route for tech startups

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Originally written by Alistair Marsden on Small Business
As an entrepreneur, it’s crucial that you understand the scope of the funding landscape. You wouldn’t start your business without knowing the market and your customers inside out, and the same approach should be taken to investment.
Often, entrepreneurs can become so preoccupied with chasing funding that they lose sight of the bigger picture. They don’t fully consider which funding source is the best fit for their business in the long term.
What is SEIS/EIS investment?
The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are a huge part of that funding landscape. They are designed to encourage investment into startups and early growth-stage companies through offering tax incentives to investors.
Investors can place a maximum of £100,000 (SEIS) or £1,000,000 (EIS) per tax year in return for equity.
Tech startups in particular can snap up a lot of this investment – the higher startup failure rate in the tech sector means that these businesses can easily prove that investor capital has to be at risk for both SEIS and EIS.
Some organisations that provide operational support to help found startups – for example through mentorship and the provision of a team and other resources — have

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Four fintechs share £40m funding pot to boost small business finance

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Originally written by Timothy Adler on Small Business
Four fintechs have been awarded £40m between them to address the £10bn funding gap caused by the lack of small business finance.
The £40m is part of a £775m programme funded by Royal Bank of Scotland as a condition of its bailout during the financial crisis.
A total of £425m will be given in cash grants to rival business banks and financial technology companies to support small businesses.
Previous recipients include Nationwide, Investec and the Co-Operative Bank.
Read: Best small business loans in the UK
Iwoca
Iwoca has been awarded £10m in funding, pledging to make £5bn available to small businesses by 2023.
The lender has pledged an additional £13m on top of the £10m grant to help open an office outside of London with at least 50 staff.
The £10m grant will expand Iwoca’s SME customer base to 150,000.
Since Iwoca launched in 2012, the small business lender has already funded 35,000 businesses in the UK, raised £350m in equity and debt finance.
Iwoca will make finance more accessible through the introduction of OpenLending, a customisable self-serve “plug & play” platform for a growing number of SME fintech partners involved in small business finance.
And Iwoca has partnered with Xero, the online accounting

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British Business Bank increases small business support by 27pc

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Originally written by Timothy Adler on Small Business
British Business Bank, the Government economic development bank, increased support for start-ups and smaller businesses by over a quarter in the past year.
It has supported over 89,000 businesses in the UK with £6.6bn of finance in 2018-19, an increase of 27pc from £5.2bn the previous year, according to its annual report.
Over 90pc of the finance was delivered through smaller, newer or alternative finance providers. The bank announced 13 new delivery partners across its programmes during this period, lifting the total number of providers it works with to more than 130.
Almost half of the £6.6bn involved providing capital to SME lenders, a third consisted of equity placed with venture capital fuinds, and the rest spent by the BBB guaranteeing borrowing by businesses.
Indeed, the BBB has become one of the largest investors in venture capital funds. Unicorn companies that the BBB has backed through VCs include Revolut, Graphcore and TransferWise.
Meanwhile, the bank’s regional development funds, aimed at levelling the playing field for access to finance, now support more than £240m of funding.
The bank made a pre-tax profit of £81.3m over the period.
Lord Smith of Kelvin, chairman of the British Business Bank, said: “Smaller businesses are

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