Supercharging Growth: Unleashing SEIS and EIS benefits in today’s challenging financial landscape
In today’s economic landscape, with rising interest costs and tightening capital markets, it’s crucial for growing companies to explore alternative funding options to fuel their expansion plans. Enter SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) – government-backed initiatives that provide a lifeline for businesses seeking capital injections.
In this article, we delve into the advantages of raising funds through SEIS and/or EIS, offering a compelling case for companies looking to navigate the challenges of obtaining affordable financing.
Benefits of accessing Investor Capital
As interest rates continue to rise and traditional lending institutions tighten their purse strings, raising funds through SEIS and EIS presents an attractive proposition. These schemes attract a diverse pool of investors looking to take advantage of the tax incentives and potential returns associated with investing in innovative startups and high-growth companies. By positioning your company as a SEIS or EIS investment opportunity, you tap into a network of individuals actively seeking ventures to support, increasing your chances of securing the much-needed capital.
What are the tax incentives for investors?
SEIS and EIS provide generous tax incentives to individual investors, making your company a more enticing investment proposition. Under SEIS, investors can receive income tax relief of up to 50% on the amount invested, while EIS offers up to 30% income tax relief. These tax benefits incentivize investors to allocate their capital towards qualifying companies, potentially boosting the funds available to your business. By leveraging SEIS and EIS, you create a win-win scenario that attracts investors while providing them with appealing tax advantages.
SEIS and EIS can help with cash flow and risk mitigation
Raising funds through SEIS and EIS can significantly bolster your company’s cash flow, providing the necessary capital to pursue growth opportunities without burdening your balance sheet with debt. With the rising interest costs associated with traditional financing options, avoiding additional debt can be a smart move for your business. Furthermore, SEIS and EIS investments mitigate risk for investors by providing income tax relief and potential capital gains tax exemptions. This reduced risk profile encourages investors to support your company, helping you secure the funding needed to fuel growth.
The importance of investor expertise and networks
Beyond the financial benefits, raising funds through SEIS and EIS enables you to tap into the expertise, networks, and support of experienced investors. Many SEIS and EIS investors bring not only capital but also valuable industry knowledge, guidance, and connections. These seasoned investors can contribute to the strategic direction of your company, open doors to new opportunities, and accelerate your growth trajectory.
Kristina Pereckaite, MD of angel investor network, South East Angels, says “SEIS & EIS can be the difference between an investor investing or not investing in a business – these world-leading schemes make investing in early-stage companies a more attractive opportunity for UK investors whilst providing loss relief in the event things don’t work out”.
In conclusion, as interest costs rise and capital markets tighten, raising funds through SEIS and EIS provides an attractive solution for growing companies. By accessing investor capital, leveraging tax incentives, enhancing cash flow, and tapping into investor expertise, you can navigate the challenges of securing affordable financing and position your business for success. Act today, explore SEIS and EIS opportunities, and propel your company’s growth trajectory amidst the changing financial landscape.
If you have questions on raising SEIS and/or EIS for your growing business, contact Jake Standing at firstname.lastname@example.org.
Author: Jake Standing, Director
Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided in this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.
Date published: 27 June 2023