Only 3% of SMEs aware of government schemes

At a glance

  • Many small businesses are unaware of the range of government initiatives available to them, aimed at helping them prosper
  • We look at three such government-backed schemes that can facilitate the growth of SMEs
  • Zurich’s Q3 SME Risk Index report found a significant lack of awareness surrounding these schemes, with just 3% of SMEs actually aware of one of these initiatives – the Growth Vouchers programme

SMEs are the lifeblood of the UK’s economy; with an estimated 5.2 million businesses employing a total of 25.2 million people – and with a combined annual turnover of more than £3.5 billion.

But not all SMEs are aware of the existence of key government agencies and bodies that are designed to assist them, and despite their growing experience in the economy, just one in five SMEs are expected to seek advice in 2015.

More help for SMEs is out there

There are a number of other government-backed schemes designed to help small and medium-sized enterprises – here are just some of them:

  1. Mentors ME 
Provides access to 15,000 trained volunteer business mentors from the SME community to boost local mentor networks.
  2. Manufacturing Advisory Service (MAS) 
Supports manufacturing businesses in England by reviewing their business and providing subsidised consultancy support in areas such as business planning, manufacturing , innovation and efficiency, raising finance and growing the supply chain.
  3. GrowthAccelerator (GA) 
Supports businesses with high growth potential to access finance, commercialise innovation, develop leadership skills and formulate/deliver a high growth strategy.
  4. Technology Strategy Board (TSB) 
Provides grant funding (not advice) to support R&D and innovation activity to companies across the UK mainly through web based competitions. Also supports networks to connect partners to promote knowledge sharing.
  5. Design Council (Designing Demand Programme) 
Small national programme that helps SMEs use design to improve performance through bespoke packages of design support and coaching delivering through design associates.

“Growing a business is a challenge, so businesses should tap in to all the help they can find, particularly if it comes from the government,” says Clive Lewis, Head of Enterprise at professional accountancy body, the Institute of Chartered Accountants in England and Wales.

For brokers, being able to pass this information on to their SME customers could prove vital, as these government schemes, among many others, may prove the difference between an SME surviving and failing.

Three such initiatives designed to help SMEs in areas such as staff training, business strategy and funding are:

1. National Apprenticeship Service

Apprenticeships are often described as a great way to introduce talent to an organisation. Eligible SMEs can claim a grant of £1,500 per apprentice from theNational Apprenticeship Service, after completion of a 13-week programme.

Although historically SMEs have not heavily used apprenticeships – as a result of meaningful training and development costs – progress is being made.

In 2012, a government review found that despite 99% of all businesses in the UK being SMEs, the proportion of apprenticeships in SMEs was just under 10% – less than half that of larger companies. However, a more recent March 2014 survey by ICM found that a fifth of SMEs were now planning to take on one or more apprentices, figures much more comparable to larger businesses.

With increasing government assistance to help recruit young apprentices, SMEs seem to be putting aside potential fears over costs and administrative burdens and are now seeking to employ young, talented apprentices.

2. Growth Vouchers

The £30 million government Growth Vouchers programme, launched last year, aims to give advice to SMEs in areas such as financial strategy, cash flow, marketing, leadership and digital technology.

Eligible small businesses can receive up to £2,000-worth of business support and advice.

The voucher works like a ‘money off’ deal at a supermarket – for example, an SME selects an accredited advice consultant, which costs £4,000, and the government and SME each pay 50% of the fee.

However, despite high levels of promotion, only 3% of SMEs are actually aware of the Growth Vouchers scheme, according to an October 2014 Zurich SME Risk Index survey of small businesses.

Successful applicants to the scheme are chosen at random – eight out of 10 SMEs are successful in securing funding. Be warned though, the scheme, which has been designed to be a painless process, may be finishing at the end of March.

Growing a business is a challenge, so businesses should tap in to all the help they can find, particularly if it comes from the government

Clive Lewis, Head of Enterprise at the Institute of Chartered Accountants in England and Wales

3. Seed Enterprise Investment Scheme

Finally, the Seed Enterprise Investment Scheme(SEIS) is designed to help start-up businesses raise equity finance, with the government offering a range of attractive tax breaks to individual investors who purchase new shares in these companies.

The scheme is particularly appealing for start-ups and early-stage businesses, who have traditionally found it difficult to borrow from the banks since the financial crisis.

SEIS, which was introduced in 2012, has seen a growing number of start-ups applying for permission to raise funds from private investors. According to investment firm Radius Equity, there was a 73% increase in the number of start-ups applying to HMRC to use SEIS in the 2013/14 tax year.

Article supplied by Zurich.co.uk

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