Small businesses set to lean on private investors to survive Omicron disruption

The Government announced last Wednesday that they were turning to Plan B as the latest step in the fight against the Omicron variant with Plan C already being rumoured to be implemented shortly, the future is constantly being altered by the Omicron variant. The fresh restrictions imposed are a massive setback for UK businesses, who were gearing up for a lucrative festive period – with Omicron most likely not being the last Covid variant to emerge – businesses must create consistency in their approaches to combat this variant and prepare themselves for the future.

In many ways Omicron is both nothing new and the next frontier of SME’s having to battle Covid. Whether or not Omicron will cause major impact on the economy remains to be seen, governments are unlikely to provide support additional large scale assistance to SMEs as they would prefer to keep the economy open and utilise various other tactics such as limited capacities and vaccine passports to manage the virus. Consequently, SMEs are going to need support in order to navigate through these tough times.

With over 6 million SMEs in the UK, making up 99.9% of private sector businesses, EIS is an essential tool to aid the country’s SME landscape. Providing such pivotal support to the backbone of the economy, SMEs will now need to lean on private investors through investments such as the EIS to provide the essential support needed to combat the effects of the Omicron variant. Since its inception in 1993, the Enterprise Investment Scheme has raised over £24 billion in funds for almost 33,000 companies of that, £16.2 billion, almost 60% has been invested into companies raising EIS funds for the first time. This trend continued into 2020 with a total of £1.9 billion of investment being raised by 4,215 companies. SMEs are unlikely to get the help they desperately need from the government, meaning that private investors are vastly becoming crucial for SMEs to continue to flourish through these Omicron affected times.

Luke Davis, CEO of IW Capital discusses the importance of private investors to SMEs in combatting the Omicron variant:

“The swift turn to Plan B and rumoured implementing of Plan C from the government shows that the UK business landscape can change swiftly and with no warning. This is a small glimpse into what is developing into the future for UK businesses, increasingly SMEs around the UK are needing the help of private investors and private investors are willingly providing it. Through investment, such as the EIS, small businesses can gain much needed funds in order to mould and adapt their businesses to progress through these times which are currently filled with obstacles.

“The Omicron variant has cause countless issues within the whole of the UK – especially effecting small businesses around the country, but I am positive that SMEs can continue to thrive and continue to keep moving forward in their journeys.

“There is a huge amount of ambition and talent throughout the UK small business ecosystem, and it is an exciting time for SMEs, both from an investing and business standpoint. At IW Capital we are always searching for and looking to invest in small businesses through the Enterprise Investment Scheme to aid their growth journey and provide them with the opportunity to thrive and succeed. It’s great to see the current flourishing UK SME market and the consistent increase of SMEs utilising the Enterprise Investment Scheme it is providing an optimistic picture for the coming months and 2022.”