Listening? Politicians Unaware Of SME Funding Aids (And Needs)


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We are trying to be heard, but it seems that the message of peer-to-peer lenders is not getting through as well as it might. To be blunt, a snapshot survey of new entrants into Parliament reveals startling levels of ignorance amongst MPs regarding sources of finance, funding and tax breaks for SMEs.

"More than half of Conservative MPs – 56 per cent – either hadn't heard of the Seed Enterprise Investment Sceheme (SEIS) or didn't know enough about it to decide whether it was effective," reports CityA.M.

"And there has been a drop in the number of Tories who back the Enterprise Investment Scheme (EIS), down to 45 per cent from 68 per cent last year.

"The survey – conducted for the think tank by YouGov and supported by law firm Bircham Dyson Bell – found a similar lack of knowledge from politicians on the opposition benches.

"Almost two-thirds of Labour MPs - 61 per cent - had not heard of Innovate UK, which supports entrepreneurs by running competitions for up to £536m government funding, or didn't know about it well enough to determine whether it is effective."

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SEIS and EIS tax breaks are applicable on share investments in qualifying companies. This is equity investment, and, according to a Financial Times report, equity crowdfunding's "biggest companies include Crowdcube, Seedrs and SyndicateRoom, but many smaller start-up platforms have joined the fray."

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"Unlike on sites such as Kickstarter, where donors contribute money to projects often in exchange for token 'rewards'," continues the FT, "equity crowdfunding gives its investors a stake in the companies involved. But it is far riskier than its loan-based cousin, peer-to-peer lending, while some 62 per cent of funders on equity crowdfunding sites have no experience of early-stage investment, a study found last year."



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