The Enterprise Investment Scheme in the time of Coronavirus
The Coronavirus pandemic has brought with it huge impacts to the world of business. From rigorous lockdown restrictions that saw many firms temporarily close their doors, to working from home – businesses all over the UK have been affected. Positives have come from the period, too. Increased consumer spending was brought about by the Eat Out to Help Out scheme initiated by Chancellor Rishi Sunak, and new sectors – such as MedTech and PPE – have even been born as a result.
The small business sector has had its share of ups and downs during the pandemic. Many have thankfully been able to adapt to the new way of working and have successfully launched online arms of their businesses, for example, to remain resilient.
IW Capital continued to support ambitious start-ups during the crisis. GPDQ is an on-demand doctor service that had great growth opportunity and potential during the lockdown period. The raise was met with enthusiasm from IW Capital’s investor base, as the firm had a structure in place to navigate the crisis and cater to the increased demand created in the MedTech sector as consumers had less access to GPs in a face-to-face capacity.
Transcend Packaging – who work with the likes of Starbucks to provide eco-friendly packaging – have also seen success during the pandemic. Consumers and, in many cases, investors are now looking toward supporting a more ‘green’ agenda, and IW Capital completed this raise through the pandemic too.
It is clear then, that despite the current climate, there are a huge number of SMEs that have adapted quickly to the pandemic and the changes it has ushered in. Many are now primed to grow, create jobs and increase value for investors. There is huge volatility in markets at the moment, which is putting some investors off – but thinking long-term can offer a refreshing change of perspective.
Luke Davis – CEO of IW Capital – comments:
“Schemes such as the Enterprise Investment Scheme will be more important than ever by offering investors a tax-efficient way to back small growth businesses, reducing risk and increasing the potential for returns on investment.
There are significant opportunities for growth for businesses who have pivoted or adapted quickly, or that offer services that cater to our new way of living and working. This often leads to higher employment rates, especially in the SME sector.
Making growth investment more easily available to SMEs that are looking to grow should be a priority. Following our investment into Transcend Packaging – a firm who have shifted to PPE production – they have nearly doubled their workforce. This demonstrates the value of extending the scope of SME investment schemes such as the Enterprise Investment Scheme, which we hope will be addressed in the near future.
Investment in this sector will be key to encouraging economic growth, with the SME arena historically employing around half of the private sector workforce and accounting for 99% of all businesses.”