REGULATIONS on small businesses raising equity finance will be eased from today.
Mark Hoban, financial secretary to the Treasury, announced measures were being brought in a year earlier than planned to allow companies to access financing more cheaply and effectively.
Small and medium-sized enterprises (SMEs) will be able to access up to five million euro (£4.37m) before a prospectus – a costly compliance procedure – is triggered.
Mr Hoban said: “I’m delighted to announce the UK is introducing these deregulatory measures early, saving UK SMEs £12m per year. Reducing the regulatory burdens faced by business is vital in making the UK the best place to start, finance and grow a company.
“In order to play their part in the wider economic recovery, small businesses have to be able to access the finance they need – that includes making it easier for such businesses to tap into capital markets.”
The amendments to the EU Prospectus Directive became law yesterday, allowing businesses to take advantage of the measures from today.
John Walker, national chairman, Federation of Small Businesses, said: “We welcome the fact that the Government is making it easier for small business to access finance. More small firms should look at equity finance as an alternative route to accessing credit, and these changes will help firms who are looking to grow and invest.
“Extending the number of investors and increasing the prospectus value will help more small businesses access equity finance and show there are more options than going to the bank for credit.”