Every start-up business needs help when it comes to getting their new venture off the ground, and there are a number of investment schemes that enable early stage enterprises to get the funding they require to progress their business further. The Seed Enterprise Investment Scheme (SEIS) is a popular route for companies and investors, however, for those unfamiliar with investing and seeking investment accessing such a scheme can be particular daunting.

As the UK’s leading venture capital firm Mercia Fund Management assists a number of companies when obtaining funding and additional business support. Here they introduce the Seed Enterprise Investment Scheme and give both investors and start-up businesses the tools they need to take advantage of this excellent route to business growth and profitability.

Why was the SEIS introduced?

The SEIS or Seed EIS is designed to boost economic growth and give early stage businesses the funding they need to launch their venture and achieve market success. The UK government introduced the scheme back in 2011 to encourage entrepreneurship after the loll of the recession hit British businesses hard. Venture capitalists throughout the UK actively use the scheme to give private investors and businesses access to its tax incentives and additional benefits.

The SEIS enables small and start-up businesses to raise the equity finance they require to progress. Whilst its sister initiative, the Enterprise Investment Scheme (EIS), provides funding for higher risk companies and follow-on finance to sustain business growth.

The advantages of the SEIS

As well as offering the finance and business support companies need in those vital early stages, Seed EIS unlocks a series of tax reliefs for both businesses and investors. Tax incentives available under the scheme include reliefs on income tax, capital gains re-investment and capital gains disposal. Each relief is designed to relieve the burden for companies and investors, burdens that have until the scheme’s introduction stumped business growth and prevented investors from funding start-up companies in the UK.

Does my company qualify?

Many trades qualify for seed enterprise investment, however, to qualify for seed funding under the scheme companies must meet a selection of strict guidelines. First of all the applicant must be a UK company and have permanent residence in the country. The company must also be a small business consisting of under 25 employees.

The applying company must be less than two years old and have assets of less than £200,000. The company must also be from an approved sector as ventures providing land, property development, shares, finance, legal or accountancy services do not qualify.

For further information on the Seed Enterprise Investment Scheme, please visit our website.