I found out today from Andrew Grey of k&h Accountants www.kandh.co.uk about a little-known grant that is available to SMEs who want to buy new capital equipment using finance.
The grant comes from a company called Regional Growth Fund (RGF), which pays 20% of the cost of assets bought using HP, as long as the assets are used to ‘increase or sustain employment’. In other words, you can’t use the equipment to replace people!
The assets bought must cost more than £25,000 (including VAT) and you must pay at least 10% up front, and the grant will pay 20%. The 70% balance is paid with interest at the bank’s usual rates (APRs of 7-8% are typical) over the period that you agree. It may be possible to re-finance existing assets as well.
A few asset classes (including cars) are excluded and there are various other conditions, but if you are considering investing in the near future – for example, to benefit from the extra tax allowances that you can get up to April (see our blog on annual investment allowance) – then I recommend that you find out more.
Thanks to Giles Winter and Katie Lawrance of RBS/Lombard for making me aware of this. Please email Katie or contact Andrew if you’d like to know more.