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EU cash on the horizon for SMEs

Date Added: 31/01/2014  

The Horizon 2020 project seems set to deliver valuable benefits to innovative small and medium-sized enterprises (SMEs) in the technology and manufacturing sectors.

Horizon 2020 is the European Union's biggest ever research and innovation programme. It is a €9 billion (£7 billion) fund that will finance businesses seeking to bring new technologies to the market. 

Money will also be available to test the commercial viability of new products as well as to finance initial production runs. 

The good news for SMEs is that a third of the money has been specifically set aside for them and the European Commission has attempted to cut through the red tape in the applications process. 

This means that small businesses are now entitled to apply alone for finance where they have previously had to do so through larger consortiums.

This could be the answer some SMEs have been searching for after being denied finance by UK banks. 

Marlon Wolff, chief executive officer of Ingenious Britain, a resource hub for small businesses, says British companies need to get moving quickly.

“This project could be the difference between being able to bring innovative new ideas to market and not. Applications are open until the end of 2020, but it is going to be highly competitive and we want UK businesses to explore the potential sooner rather than later,” he added.

According to Mr Wolff, if every SME could increase its sales by £30,000 a year and could employ one additional worker then, as a collective, they could add £3 billion to the UK’s economy and create one million new jobs.

He said: “That has to be a prize worth going for."

In a recent parliamentary report, Margaret Hodge MP agreed that SMEs play a vital role in the economy of this country. The review made clear recommendations to improve the guidance SMEs receive and their access to bank finance.

Ms Hodge also pointed out that since the government's 'Funding for Lending' scheme was launched in 2012, net lending by participating banks declined by £2.3 billion, rather than increasing. 

The results from the report coupled with the potential funding available from the Horizon 2020 project means that 2014 could see SMEs grow and prosper.

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