March 2014

Update: Budget 2014

BUDGET 2014: Social investors, Enterprise Zones and exporters win; and Annual Investment Allowance raised

Some other significant changes to the growing company market brought about by the 2014 Budget are outlined below:

  • The Annual Investment Allowance against corporation tax has been doubled to £500k, giving businesses the chance to claim against a large amount of inward investment. The relief will also now run to the end of 2015. If your business needs help with tax related funding, get in touch with us here
  • The Direct Lending Scheme for export finance, initially introduced as a temporary measure, is to be made permanent and the budget for it doubled to £3bn. Businesses that require cash to process export orders can access loans from the Government. You can talk to us about business loans for your company, enquire here.
  • The benefits available businesses relocating to Enterprise Zones (including business rates discounts and greater capital allowances) will be available for a further 3 years.
  • Social investments will now be eligible for the same 30% tax relief as that available under the EIS scheme, and will cover both loans and equity investments. Relief will also be available for social impact bonds. If you want to find out more about equity investment, click here.

Challenging the banks

Alternative lending is on the rise yet again, as seen by the bold move of the insurance giant L&G to challenge bank lending by providing loans to medium-sized UK companies.

As interest rates are at a historical low, returns from bonds issued by institutions and governments haven’t been terribly attractive. The life insurance and investment group has unveiled plans to launch a lending operation which will allow medium sized companies to borrow sums as low as £20m, for up to 10 years.

This market niche has also been seen by Prudential’s fund management business M&G who provided a loan to coffee chain Caffe Nero recently.

As returns from fixed-income products remain low, we have seen alternative finance on the rise lending to companies as the banks fail to provide SMEs with cash to grow their businesses.

Here at our team are working to bring you even more products to help finance your business. Whether it be unsecured loans or cash to buy goods for your business, or even if your business is thinking of buying a commercial property, we can help point you in the right direction. See what types of finance you can apply for using our fund finder.

Boosting investment in trade and stock

The UK trade industry has seen a steady growth from the start of the year, indicating growth in the construction and manufacturing economy. The Office for National Statistics recently reported a rise in exports and fall in imports which subsequently helped the UK’s trade deficit by £2.6bn.

As a result of expanding domestic trade, UK companies needing cash boosts to buy stock and goods are struggling to get short-term finance. Only today, John Cridland, director-general of the CBI called on the Chancellor George Osbourne to boost investment and export trade in order to rebalance the UK’s economy.

Other initiatives include communities such as ‘Trade Finance Global’ which is an online community where users can gain practical insights on key international trade topics from articles, videos, webinars and special features.

Here at Business Funding, we have advisers who are experts at lending short-term cash specifically for UK companies seeking to buy stock or finance trade. Click here to find out more or get in touch with us now.