High Net Worth Individuals Could Help Early Stage Firms

Posted on 2nd June 2014

A new platform for Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS) will allow young companies to tap into funding of £5m next year from high net worth individuals (HNWI) and family offices.

Advisory broker Prime Wealth Group has launched the platform with the aim of helping its investors achieve great returns and directing more much-needed funding to hard-pressed growth businesses, which are still struggling to source finance despite popular funding options such as crowd funding.

A spokesman for the group said that the firm’s platform is aiming to assist growth businesses quicken the pace of their expansion, as well as helping drive the UK’s economic recovery.

Under EIS, firms are able to accept up to £5m of investment, while individual investors are able to buy shares up to £1m and receive up to 30 per cent in tax relief on the cost of the investment, and since the scheme was launched a decade ago, nearly £10bn has flowed into growth companies.

Meanwhile, SEIS aims to specifically help young, start-up companies raise equity finance and, so far, the programme has helped over 1000 companies, raising over £80m from private investors. Tax relief of 50 per cent on the initial cost of the shares is available on an investment of up to £100,000 in a single tax year.

Prime’s EIS/SEIS platform is concentrating currently on the film production market, as it offers an alternative structure to other tax-driven film finance deals that have not been accepted by HM Revenue & Customs (HMRC). In contrast, SEIS and EIS, by their very nature, are approved by the Revenue and, assuming the rules are followed, the tax relief is automatic.

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