Over 45,000 tech start-ups were launched across the UK in 2019, representing 6.6% of all new businesses.
Many of these would inevitably fall by the wayside due to either the lack of a good idea and/or a failure to execute properly.
However, of those remaining, many could and would go on to establish themselves and underpin the UK’s position as a leader in some of the key digital growth sectors.
The problem with the Covid-19 crisis is these very businesses are one of the most at-risk groups currently. Most of the new Government initiatives don’t help these people, for example:
- Loans are not generally available to loss making companies
- Many operate from co-working spaces and therefore may miss out on local authority grants
Even those that may qualify for a loan will find themselves in a long queue waiting for the traditional high street banks to process their application.
So, it is encouraging to read that this problem has not gone unnoticed by everyone.
Fintech challengers are eager and ready to offer a speedy response to the credit crunch facing small firms – automating and speeding up much of the due diligence process with their machine learning algorithms.
Calls for a ‘Runway Fund’, a publicly funded vehicle for backing promising businesses, are growing – adopted in France, but yet to be heeded in Britain.
A proposal for a ‘new 3i’ to help businesses emerge from the coronavirus crisis has been submitted to the treasury with the backing of the CBI. Plans to create a £5bn fund using taxpayers’ money have been out together by the growth investor Foresight Ventures.
Meanwhile, a campaign to ‘save our start-ups’ will be launched this week to help thousands of promising young businesses that do not qualify for existing schemes – its backers include several industry leaders and over 20 industry bodies and lobby groups.
Time is now of the essence – money is fast running out for our ‘stars of the future’ and they need help fast.
