Government looks to maintain European business funding after Brexit

By Jarod Lawley

The Treasury is looking to maintain its relationship with the European Investment Bank (EIB) Group after Brexit, guaranteeing continued support for entrepreneurs and SMEs.

The EIB Group is a long-term venture capital lender that also comprises of the European Investment Fund (EIF).

EIB headquarters in Luxembourg. Photo courtesy of Gwenael Piaser

An HM Treasury spokesperson told Turnover: “We continue to actively explore options for a future relationship with the European Investment Bank- we are committed to ensuring that businesses have access to the finance they need after we leave the EU.”

However, an investigation by Turnover has revealed that funding to UK businesses has dropped dramatically since the referendum decision to leave the EU in 2016.

At last year’s Budget, the Chancellor also announced that if Britain leaves the EU without a future relationship with the EIB Group in place, the government will provide additional funding through the British Business Bank.

The British Business Bank’s resources for venture capital and growth finance total £200 million which will be available to support entrepreneurship in 2019/20.

While the government hopes to sustain British access to European funding after Brexit, a HM Treasury spokesperson says: “The Chancellor has been clear- we will be prepared in case we do not maintain our relationship with Europe.”

Since the referendum in 2016, EIF support directed to the UK has fallen from 27% of all funding to just 8%.

This uncertainty has already caused many entrepreneurs to look for alternative finance solutions.

One of the most popular of these is crowdfunding, which is facilitated by platforms such as Crowdcube, Indiegogo and Crowd Supply.

Luke Lang, CMO of Crowdcube, believes that Brexit woes won’t scare determined entrepreneurs.

Luke Lang started Crowdcube in 2011 to help more entrepreneurs realise their vision. Photo from Twitter

“We’ve had a record year for both businesses funded and investments raised,” says Lang. “It taught to be a time of uncertainty, but we’re actually seeing the opposite and having our strongest ever quarters.” Read the full investigation, How will we go on without EU?, in Turnover issue 1, out March 28th.