Mark Brownridge

Are brokers aware of funding options for graduate businesses?



312_2018-08-24-04-35-12pm.gif
There is a “deficit” in the level of education with regards to broker awareness of graduate business funding, according to Mark Brownridge (pictured above), the director-general of the Enterprise Investment Scheme Association.

In an exclusive interview with Bridging & Commercial, Mark commented that there was also a lack of understanding from graduates and start-up entrepreneurs on where they can get the funding they need.

“Anybody discussing investment options with a broker will be receiving expert advice, however, they need to be mindful of commercial associations underpinning any discussion where the expert is not wholly impartial,” said Mark.

“Trade associations and government websites are always a good place to start.

“With regards to broker awareness on graduate funding, I do believe that there is a deficit [in] the level of education.”

Mark stated that while the Bank of Mum and Dad would always be there for an initial business kick-start, schemes such as the Seed Enterprise Investment Scheme (SEIS) would begin to become more popular.

“The scheme has a history of bringing investors and SMEs together, and I think many new business leaders are not just looking for funding any more, but also guidance and experience.

“That is how the funding environment is changing and will continue to change in the future.”

The SEIS helps businesses which have less than £200,000 of assets and have been trading for less than two years.

It offers tax efficient benefits to investors in return for investment in small and early-stage, start-up businesses.

Mark argued that a reliance on finance from the Bank of Mum and Dad limited opportunities for aspiring entrepreneurs from less affluent backgrounds.

“…That is why we are seeing various finance options trying to close this gap, ensuring that funding is as accessible as possible for those who need it.

“Crowdfunding has been a popular source of financing for around a decade, but without any guidance that comes with the finance – as well as a highly diluted market – many are turning away from this particular source of funding.

“Government-backed schemes – such as SEIS and then later down the line EIS – provide start-ups and scale-ups with access to finance from investors who, via investment houses, can support them as they grow.”

Mark added that it was hosting events across the country called Ready, Steady, Grow to help give start-up entrepreneurs the tools to become more financeable.

“There is a lack of information surrounding the distinction between a start-up and a scale-up company.

“Our role is to ensure that we deliver the correct levels of education to all players involved.

“The UK’s alternative finance arena is hugely diverse, with many different financing options applicable for the variety of growth stages an SME encounters from seed to series A, and B etc, so it may be confusing when you hear the terms in relation to a medley of business sizes.

“We always recommend seeking professional advice when exploring financial opportunities for your business.”

Mark concluded by stating that the emergence of a sub-market for the start-up sector was inevitable.

“The seismic [impact] of cryptocurrency and blockchain technology is testament to this.

“Education will always be the key to achieve the right funding for young entrepreneurs.

“The alternative finance arena has continued to evolve since its conception, and I believe that it will continue to do so.”

Sign up to our newsletter to receive more news like this story

I accept that by joining the B&C mailing list, I will receive relevant news and promotional material via B&C on behalf of its partners and advertisers. Your data will not be passed on to any third party.
No, thanks, just the news please.

Leave a comment


×