Finance · 22 March 2018

Are British investors about to splash their cash on small UK businesses?

Collaborative investment
A fifth of British investors claimed prospective trade deals made UK firms more attractive

British investors are ready to splash their cash on SMEs after Brexit as they become more attractive to finance, new survey findings have suggested.

The new “Brexit vs Deal Flow” report, from the Enterprise Investment Scheme Association, discovered that a third of investors feel Brexit will give a lift to productivity, with one in five encouraged to invest into UK SMEs as a result of the country leaving the EU.

A fifth of investors said SME investments were more attractive thanks to Brexit trade opportunities. A similar number believe Brexit will lead to a higher frequency and better quality of SME investments.

“As the past year has shown, even when operating within a fluctuating political landscape British SMEs continue to excel,” said Mark Brownridge, director general of the EISA.

“Across all sectors, but especially among new-age businesses operating within the fintech, medtech or energy tech spaces, there is a strong desire for growth and expansion to take advantage of the greater trade opportunities ahead of them outside of the single market.”

Read more about the Enterprise Investment Scheme:

Brownridge added: “While the EISA will continue to work closely with HM Treasury, HM Revenue and Customs, government ministers, MPs and the Financial Conduct Authority (FCA) to enhance the EIS and support SMEs, it will be entrepreneurs – the architects of a post-Brexit future – who will make a success of Brexit and propel the economy forward outside of the single market.”

Breaking down the figures further the report stated that 35 per cent of those with £75,000 to £100,000 believe they will be presented with a better quality of SME investment post-Brexit with 29 per cent of affluent investors with over £100,000 of investible assets, encouraged by the opportunities to trade.

A quarter of 18 to 35-year olds said they felt more encouraged to invest into UK SMEs as a result of Brexit with a third of over 55s believing Brexit will strengthen productivity.

The report also said that four million investors are holding back money until after the formalisation of Brexit – especially in the capital with one in four Londoners doing so.

The EISA said that the report revealed a “positive and pragmatic approach by investors” and comes amidst a “staggering” one in seven business leaders expecting to shrink or close their business this year.

“This highlights a critical call for action to bridge the gap between early-stage and scale-up growth funding and provide further support to maintain the ongoing buoyancy of UK investor sentiment,” the EISA declared.

__________________________________________________________________________________
Investment

 

What steps should startup founders take before a first-time investment?

Going through the process of raising investment for the first time can be an anxious period for any small business owner. Here, Crowdcube CEO Darren Westlake tells startup founders what to consider.

__________________________________________________________________________________

Sign up to our newsletter to get the latest from Business Advice.


 
TAGS:

ABOUT THE EXPERT

Q&A

If you’ve found the article above useful, but have a more detailed and bespoke question, then please feel free to submit a query to our expert. We at Business Advice will get in contact with them on your behalf and arrange for a personalised response. These questions and answers will then be collated on the site for any other readers who have similar queries.

Ask a question

High Streets Initiative