By Max Clarke
The Financial Secretary to the Treasury, Mark Hoban MP, has announced that two deregulatory amendments to the EU Prospectus Directive have been brought into effect a year early by the UK to help small businesses access equity finance more cheaply and effectively.
“We welcome the fact that the Government is leading the way in Europe by making it easier for small business to access finance,” said John Walker, National Chairman, Federation of Small Businesses.
By bringing the two measures into force now, the Government is demonstrating its commitment to helping small UK businesses access the finance they need, in an announcement welcomed by the Federation of Small Businesses. The new requirements come into law on 31 July 2011, allowing businesses to take advantage of the measures from 1 August 2011.
Continued Walker: “Implementing the amendments a year early means that fewer small issuers are caught by the prospectus regime. SMEs will now be able to raise equity finance up to €5 million (doubled from €2.5 million) before a costly prospectus must be produced. They will also be able to target a larger pool of investors (up to 150 investors, from 100). Lifting a significant number of small companies outside of the obligations to issue a prospectus will make accessing equity finance more efficient and save UK SMEs around £12 million per year. “
Mark Hoban said:
“I’m delighted to announce that the UK is taking the lead in Europe by introducing these deregulatory measures early, saving UK SMEs £12 million per year. Reducing the regulatory burdens faced by business is vital in making the UK the best place in Europe to start, finance and grow a company. In order to play their part in the wider economic recovery, small businesses have to be able to access the finance they need - that includes making it easier for such businesses to tap into capital markets.”