Government proposes National Investment Bank to replace EU startup funding
The government has proposed a new National Investment Bank to counter the loss of European funding initiatives for small UK businesses, reportedly worth 3.6bn, once Britain leaves the EU.
The announcement signals the government’s recognition that Britain’s relationship with the European Investment Fund would likely end after Brexit.
Currently under consultation, a new national fund would also be fundamental in helping UK startups challenge the dominance of US counterparts, the government said.
Designed to improve access to finance for potential world-leading unicorns? innovative firms valued over $1bn the announcement of a National Investment Bank follows a review that identified a 4bn funding gap between UK startups and those in the US.
Commenting on the proposal, Chancellor Phillip Hammond said providing startup founders with sufficient finance opportunities was a priority for ministers.
britain is an innovation powerhouse and it’s vital that we make sure our cutting-edge firms have the funding they need to meet their potential and conquer new markets, Hammond said in a statement.
meeting this challenge will boost our productivity and enable us to create more well paid jobs across the UK.
Days before the Brexit vote in June 2016, the European Investment Bank (EIB), in partnership with lending marketplace Funding Circle, pledged 100m in funding for small UK firms.
Almost a year later, in May 2017, a Federation of Small Businesses (FSB) report claimed British companies stood to lost EU funding worth 3.6bn once Britain left the EU.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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