Business News Round Up (07/08/2020)
Urgent action is required to close the UK’s growth capital gap says new report
Urgent action is required to close the UK’s growth capital gap, according to a report released by Innovate Finance, the ScaleUp Institute and Deloitte. The Future of Growth Capital report stresses that closing the emerging £15 billion gap will provide opportunities for aiding the UK’s economic recovery post-Covid, generating future prosperity and boosting regional economies, productivity, innovation, and internationalism. Growth capital refers to the financing that enables scaling innovative companies, both young and established, to reach maturity. The gap — the difference between demand for and supply of growth capital — stood at between £5 billion and £10 billion a year before the Covid-19 crisis. The pandemic has significantly exacerbated the issue and effectively doubled the gap, with it now reaching £15 billion.
Emergency lending to Scottish businesses falls short, UK data shows
A regional breakdown of emergency loans to small firms in Britain during the coronavirus crisis shows that Scotland and the South West of England have received a smaller share of nationwide lending than they did prior to the pandemic. Mid-sized companies in London received bigger loans on average than anywhere else in the UK, according to the data released by the UK Treasury. Businesses in Scotland were offered 6% of the total pot of bounce back loans, compared to a 9% market share of small business lending at the end of 2019 according to UK Finance data. The South West got 8% of the emergency funding, compared to a 12% prior market share.
North West business received over £4.4bn of funding under CBILS and BBLS
New data published today shows that businesses across the North West have received a total of over £4.4 billion in funding under the government’s two largest Covid-19 loan schemes, the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme. These provide financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the Covid-19 outbreak. Over 112,000 loans worth over £3.3 billion have been offered across the North West under the Bounce Bank Loans Scheme, which provides a six-year term loan from £2,000 up to 25% of a business’ turnover, with a limit of £50,000. Almost 4,700 loans worth over £1.1 billion have been offered across the North West under the Coronavirus Business Interruption Loan Scheme, which provides Business loans, overdrafts, invoice finance & asset finance of up to £5 million to businesses with a turnover less than £45 million. Total funding provided to North West businesses represents 11% of the national total, in line with the relative size of the North West’s business population (10%).
Scotland supports SMEs’ use of tech in economic stimulus plan
The Scottish Government has unveiled its plans to stimulate the economic response to coronavirus, with proposals including measures to boost youth employment, funding to help workers retrain and support for SMEs to make greater use of digital technology. Published in response to the Advisory Group on Economic Recovery report and the Enterprise and Skills Strategic Board report, the initial measures include £50 million to support youth employment, including the Scottish job guarantee, as well as the creation of a ‘transition training fund’ to support and help retrain people facing redundancy and unemployment in sectors hit by lockdown.