Mark Hoban MP, Financial Secretary to the Treasury has announced that two deregulatory amendments to the EU Prospectus Directive have been brought forward to a year early in the UK in order to help small businesses to gain equity finance cheaply and quickly.

Small and medium sized businesses will be able to raise equity finance of up to 5 million euros, double the previous amount of 2.5 million euros. They will also now be able to target a larger number of investors, now 150 compared with just a 100 before. Hoban explains “Reducing the regulatory burdens faced by business is vital in making the UK the best place in Europe to start, finance and grow a company. In order to play their part in the wider economic recovery, small businesses have to be able to access the finance they need – that includes making it easier for such businesses to tap into capital markets”.

The government has recently been criticised for not helping small businesses enough through the economic downturn, but they are now hoping that this recent development will save small businesses around £12 million a year. National Chairman of the Federation of Small Businesses, John Walker, has praised this latest move by the Coalition “More small firms should look at equity finance as an alternative route to accessing credit, and these simple changes will help firms who are looking to grow and invest. Extending the number of investors and increasing the prospectus value will help more small businesses access equity finance and show there are more options than just going to the bank for credit”.