Other News
Government Proposal to Help Fund Business Growth
Sector:Central Government
Date Created:Mon 23rd Nov 2009, 14:19:21
Source:Department for Business, Innovation and Skills
Link: http://www.englandsnorthwest.com
Business rates are set to drop for 60 per cent of businesses in the north-west following a revaluation, the government has announced.
The Government welcomed the publication of Chris Rowlands’ independent review into the availability of growth capital to small and medium sized businesses.
Welcoming the report, Prime Minister Gordon Brown announced the Government’s intention to develop a proposal for a new growth fund to provide finance for companies looking to invest and grow.
He said:
"We are publishing today the Rowlands’ Report which shows that we have too many small and high growth companies that need capital to grow – and therefore better access to finance. Where there has been market failure in the past, our new innovation fund will provide support to high-tech start-up businesses growing to £1 billion as a fund over the coming years. And where there is a gap also in finance for companies looking to expand, we propose a Growth Capital Fund, a credible channel for private capital to invest in established and growing SMEs."
The Rowlands’ Growth Capital Review concludes that a permanent gap exists for businesses looking for between £2m - £10m in growth capital and that neither banks nor equity investors are likely to fill this gap in the near future.
The review highlights the importance of ensuring that small and medium sized businesses (SMEs) have the access to the financing they need as the economy recovers and opportunities emerge in a new, global economy.
It adds that the potential for increased demand for this type of financing in a recovering economy should provide a strong rationale for Government intervention to address this market failure.
A vibrant SME sector displaying strong growth is vital for overall economic growth, leading to increased competition and innovation, and improved productivity.
Chris Rowlands said:
"The review shows that there is a gap in the provision of growth capital to small and medium sized firms.
"This gap is permanent and we need to act in order to ensure that UK firms have the finance they need as we emerge from the recession. I believe Government should act to initiate activity to attract private capital into the field."
Business Secretary Lord Mandelson said:
"I welcome the conclusions of this review by Chris Rowlands. It is now for Government and the market to work together to address these issues effectively. It is vital that UK SMEs can secure the investment they need to grow."
James Caan, member of the advisory panel for the Rowlands Review, said:
"The report shows that we have an urgent need to support UK small businesses in finding finance, especially as our economy recovers. I am glad to see the government committed to working with the private sector to ensure that this happens."
