News

May 28, 2010

Mayor helps London’s small firms access growth funding

A scheme to help London-based small firms raise funds for business growth has been launched by the Mayor of London, Boris Johnson.

Understanding Finance for Business is a joint-initiative by the London Development Agency and the European Regional Development Fund. The scheme will not grant finance directly, but aims to provide hands-on support to small businesses to help them raise finance and become investment ready.

Businesses accepted on to the scheme will be given specialist finance advice, as well as training on how to become an attractive proposition for banks, business angels or venture capital investors.

The scheme is split between two programmes: Gateway2Finance, which is aimed at businesses seeking bank loans and debt finance; and Gateway2Investment, which will focus on helping firms looking for business angel and venture capital investment. More than 4,000 small businesses are expected to be supported by the two initiatives, helping to raise a predicted £64 million.

“London has the people and the spirit of enterprise to pull itself and the UK out of the recession,” said Johnson. “The role of good government is to support this by ensuring that businesses have access to the good advice and finance that is sometimes hard to find on the open market.”

The scheme is open to firms across all sectors based within a London borough. To apply, firms must be considered “investment ready”, with a product, process or service to at least a prototype stage. The business must employ fewer than 250 staff and have a turnover of less than £40 million. As the scheme is ongoing, there is no deadline for applications.

Those interested in applying should register their details online at http://www.g2i.org. The application process will typically take three months for bank funding, and up to nine months for equity investment.

The Federation of Small Businesses London Policy Unit chairman, Sue Terpilowski, said the scheme was a positive move for small firms. “We welcome the recognition that it will be micro and small businesses which will create the jobs as we come out of this recession,” she said. “We know from our own members that access to finance has been one of the major challenges.”