SME’s are missing out on Government growth initiatives

Only approximately 5 percent of SME’s are taking advantage of government support available. These schemes were established to help to improve environmental performance and ultimately save money. Entrepreneurial or research and development tax relief and capital allowances are among some of the incentive opportunities not being taken advantage of. Only 34 percent of UK SME’s are even aware of the schemes existence let alone how to access them.

Turn to Beer & Young for some free advice on what help is available for business owners.

NLGS Scheme not designed to help small businesses

It has been claimed by the British Chambers of Commerce that small firms, as well as younger and high-growth firms (who already have trouble getting credit) may not be supported by the National Loan Guarantee Scheme (NLGS). The NLGS is a scheme designed to help businesses acquire cheaper bank loans. It appears that the help will be more forthcoming to medium sized firms.

Although many of the major banks have signed up to the scheme, HSBC has not as they believe it to not be commercially viable.

If you are a small business in need of help contact Beer & Young. They have a large network of  business angels looking for the right investments.

Hard Times Ahead

The number of company failures in the England and Wales increased by 4.5% from 20,901 in 2010 to 21,843 in 2011. In the South East, South West and London 1 in 70 businesses became insolvent .

Despite interest rates remaining low the economy is still expected to worsen over the forthcoming year. There will be a rise in fuel food and travel; however wages are expected to remain stagnant.

Formal company insolvencies are predicted to rise in 2012 due to the higher levels of distress. The lack of creditor and supplier leniency will play a part in this, as when consumer confidence falters companies who rely on consumer spending will suffer when they start to tighten their wallets.

If your company gets hit hard and is struggling financially then contact Beer & Young for some advice on the best way to move forward.

Improvements to EIS Scheme

The Seed Enterprise Investment Scheme was confirmed by the chancellor in the recent budget. This enables investors to inject up to £100,000 per year in qualifying seed businesses.

The EIS scheme (a tax break for people who invest in qualifying companies, releasing their income tax liability by 30% of the amount invested) has also increased to £1 million, with the qualifying companies extended to £5 million per annum.

With these new incentives put in place it gives greater flexibility to make investments in clients businesses. Please contact Beer & Young for more information.

Will tomorrow’s budget help financially struggling SME’s

In the budget tomorrow there is expected to be a 30 percent tax relief on £500,000 within the enterprise investment’s scheme, with an increase to £1 million from 6^th April.

Companies are also entitled to write off the cost of acquiring qualifying assets (up to an annual limit of £100,000) against their taxable profits, including commercial vehicles, computers and other equipment.

This is excellent news for investors and business owners; as if the investors are receiving a higher tax relief then they will be more inclined to invest. Please call Beer & Young today to discuss your investment requirements.

Will this scheme be a success

The government have launched a national loan scheme, whereby small businesses will have billions of pounds of state backed loans available to them.

The aim is to create a lending scheme that will unclog the flow of credit to businesses. The scheme has been unveiled today by the Treasury and has been backed by 4 of the biggest banks, Barclays, Royal Bank of Scotland, Lloyds and Santander. The national loan guarantee scheme (NLGS) will see up to £20 billion of guarantees on unsecured borrowing from the banks aforementioned.

The entire benefit that the banks receive from the guarantees will be passed on to the businesses with a turnover of less than £50 million through cheaper loans.

There will be a discount of 1% for SME’s that take out NLGS, compared to the interest rate that would have been offered outside of the scheme. Factors including market share, gross and net lending track record of lending to small businesses and capacity to lend under the scheme will affect the Treasury’s decision on the allocation of guarantees that each participating bank will receive.

Will this new announcement have a real impact on the funding of SME’s or will it be damp squid like the enterprise finance guarantee scheme which has failed to deliver the much needed capital to business owners.

Beer & Young have continued to raise capital from investors where banks are unable to lend money.

Care home operator in Yorkshire collapses

A care home operator in Yorkshire (which runs 6 care homes) has suffered cash flow difficulties and has recently gone into administration after 9 years of trading.

This has thrown into doubt the future of 80 pensioners as well as having the potential to make 80 members of staff unemployed. Five of the workforce have already been made redundant.

This company will not be the last; many nursing homes are going bust or are coming under threat, particularly as banks look to reduce exposure to the sector.

However, there is no need to panic as investors are still active within the sector. Beer & Young are here to help and presently have one group already working through investment terms

The number of SME’s seeking loans has decreased

In the final quarter of last year 17% of all those who applied for overdrafts were rejected and 33% of those applying for loans got turned down. The number of smaller enterprises looking for finance has dropped, with most of them being classified as “happy non seekers”.  The figure of “happy non seekers” has risen from 68% last year to 78% this year.

It appears that the general public are so convinced that the banks won’t lend money that they have given up even trying to find out. However if your business is in trouble and does require investor funding, Beer & Young can help.

UK economy- worse than we thought

It has been reported that travel companies have a record low cash reserve. Due to a 49% increase between the third quarters in 2010 to 2011 in companies facing critical distress, it is inevitable that there will be further insolvencies in the near future. This rise of the levels of critical distress also stretches to other sectors, including the construction sector which has seen an increase of 41%, 63% in the property sector and 92% in the support services sector.

The British Retail Consortium have released data showing a decline in online spending in the third quarter of last year compared with 2010. Growth in online spending has slowed by 10%, a direct result of bargain hunting.

If your business is struggling financially and needs a cash injection contact Beer & Young. They have an unrivalled network of active private investors looking for the opportunity to help.