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CBI calls for “mission critical” support for UK’s scaleups

The CBI has called on government to offer better tax incentives to encourage savers to put their cash into long-term debt funding for medium-sized firms.

The Stepping Up report, released with accountancy firm BDO, has found that more than half of the UK’s scaleups have found it hard to access a loan with terms longer than five years.

Termed the nation’s “forgotten army”, medium-sized businesses, with typically between 50 and 250 staff, make up just 1.8% of companies but generate 23% of private sector revenue and represent 16% of total UK employment.

The report’s proposals include creating Long Term Lending Trusts, similar to the Venture Capital Trust schemes, to offer income relief to savers investing in this kind of long-term funding, along with changing the Enterprise Finance Guarantee scheme so it better rewards savers.

John Cridland, CBI director general, said that supporting the growth of these kinds of businesses is “mission critical to our economic future”.

“A key part of unlocking their enormous potential is for the Government to fix the funding ladder, filling in the gaps in supply of long-term finance that the UK’s brightest growing firms need to succeed.

“Incentivising savers to invest in our businesses for the long-run is a win win. It offers them attractive, alternative investment packages, while helping propel medium-sized businesses along their growth path, boosting the economy as a whole, and enhancing productivity.”

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