What help can small businesses get from the government?

The government is often talking about how it wants to help small business: but the good news is there are practical ways it is offering its support to SMEs.

The demands of being a small business can be enormous. You will often find yourself involved with all aspects of your venture – to the most minute detail.This can be exciting whilst at the same time very demanding.

There is no shame though in admitting to that sinking feeling and thinking you might need a bit of support.

No one said it would be easy to build up a business from scratch. After all you have so many things to think about: cashflow, funding, marketing, running costs and finding ways to drive revenue.

All these variables  don’t come into the equation when you’re working for a large company. Fortunately, this government is very supportive of enterprise and small businesses. There are so many schemes out there to support small business owners and incentivise investment than there had been previously.

It’s important to know a few of the most significant government backed initiatives that you can stand to benefit from. Here are a few of the essential ones:

Startup Loans

Perhaps the most well known government scheme that has been created over the past few years. Pioneered by former enterprise advisor Lord Young, Startup Loans exists to bridge the funding gap that has made conventional lending (from banks) difficult. Initially the scheme had an age gap and was restricted to 18 – 30 year olds. However, the initial success lead to this age limit being removed 2 years ago.

>See also: How to handle growth in a small business

If you receive a loan you will also gain access to a business mentor as well. This ensures that you are given the best possible chance not only to repay the loan but for your business to grow as well.

Another excellent thing about Startup Loans is that you don’t have to go through them directly  – there are a wide array of delivery partners who use the scheme for their specific regions as well as bodies who operate across the UK. Delivery partners include Virgin Startup, The Prince’s Trust, London Small Business Centre, Biz Britain and Lancashire Community Finance.


These are two of the most well known tax breaks when it comes to investors putting their capital into small businesses. Both assist businesses who are at different stages of their development so when thinking about which one is right for you it’s important to consider which one reflects your current stage of development.

According to Crowdcube “The Enterprise investment scheme is designed to help smaller, higher-risk companies raise finance by offering tax relief on new shares in those companies that qualify”

SEIS is a much newer initiative that was created in 2012 and  is designed  to “Encourage early seed investments in early stage companies”  Investors can receive up to 50% of tax relief on investments of up to £100,000.

For startups this is absolutely perfect as it creates better conditions to allow investment. If your company is unquoted and has no more than 25 employees then your business could indeed qualify for SEIS.

If you feel that your company is at the stage to qualify for EIS then you could receive tax relief on a number of different things including Income Tax Relief; Capital Gains Tax Exemption and Loss Relief. Whichever scheme you decide to use you could benefit from investors with less restrictions placed on them.

Angel CoFund

Another excellent scheme backed by the British Business Bank. The Angel CoFund is a“£100m investment fund with objectives to back promising uk businesses and help develop the important business angel investment market”

The fund – as it’s title implies – works alongside business angels by helping to increase funding for small businesses. The numbers are impressive: Since the scheme was launched over £24 million has been committed by the fund alongside the £95 million put forward by angels.

According Tim Mills – Investment director of the scheme “ We are looking to invest in teams of focused people who have great ideas and , furthermore have the skills and drive to execute the shaping of those ideas into a commercial enterprise”

See also: Top UK angel networks for your start-up

Entrepreneurs Relief

It’s not all just about funding: There are some fantastic government schemes which can give small business owners fantastic tax breaks. One of the most well renowned of these is the Entrepreneurs Relief. It essentially allows a trustee or shareholder of a company who are selling their shares in a business to pay less on capital gains. According to gov.uk

“Entrepreneurs Relief means you’ll pay tax at 10% on qualifying assets (instead of the normal rate of 18% or 28%”  

Furthermore the relief is available of up to 10 million of lifetime gains going back to the 6th April 2008. This reduction can be worth up to around £1.8 million for each individual who claims.

British Business Bank

Perhaps the most ambitious and largest of all the government schemes is the British Business Bank – which was created by in 2012 by then Secretary of State for Business, Innovation and Skills Vince Cable.

The aims are large in scope and they make it clear on their site that their wish is to ultimately “Make finance markets work better for small businesses in the UK at all stages of their development: starting up, scaling up and staying ahead”

Whilst this body does not directly invest itself it has over 80 partners who are all different types of institutions. This includes banks, venture capitalists, web based platforms and many others of that ilk. The diversity of partners who use the British Business Bank has been demonstrated recently as P2P firm RateSetter announced that its platform will be used by the bank to lend to small firms.

The British Business Bank has also taken on a lot of the functions from the Capital for Enterprise Limited. So a number of schemes such as the Enterprise Finance Guarantee and the Small Firms Loan Guarantee are now under the auspices of the Bank. Additionally the Bank is also a partner of Startup Loans.

MadeSimple is a business service provider offering a variety of different products to startups. This includes company formation, credit checks, virtual office services, domain hosting and tax returns.

For more information on how MadeSimple can help your business, start run and grow see here










Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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