Family offices to fund SMEs in the absence of bank lending

A new platform for Enterprise and Seed Investment Schemes (EIS and SEIS respectively), launched by broker, Prime Wealth Group, will allow young companies to tap into funding of £5m over next year from high net worth individuals and family offices.

The platform, which is currently focused on the film production market, is an alternative structure to other tax-driven film finance deals which have not been accepted by HMRC. Some of these involved establishing partnerships for the sole purpose of accumulating tax breaks or tax credits and VAT rather than driving investment.

"As well as hoping to help our investors achieve great returns we also hope the new platform will help direct more much-needed funding to hard-pressed growth businesses, which are still struggling to source finance despite popular funding options such as crowd funding," said Patrick Butler, chief executive of Prime Wealth Group. "With our platform, we aim to assist growth businesses quicken the pace of their expansion and and help drive a the UK’s economic recovery.”

Under EIS, companies are able to accept up to £5m of investment, while individual investors are able to buy shares up to £1m and receive up to 30pc in tax relief on the cost of the investment, and since the scheme was launched a decade ago, nearly £10bn has flowed into growth companies.

SEIS aims to specifically help young, start-up companies raise equity finance and so far the programme has helped over 1000 companies, raising over £80m from private investors. Tax relief of 50pc on the initial cost of the shares is available on an investment of up to £100,000 in a single tax year.

more