Increase in bars and restaurants seeking EIS funding for growth


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The number of bars, pubs and restaurants seeking funds through the Enterprise Investment Scheme (EIS) has risen by 42% in the last year, according to figures from an investment specialist.

Radius Equity, a leading provider of EIS investments, reports that, in the 2012/13 financial year, 85 businesses sought funds in this way compared to 60 the previous year.

The growth has been driven by new “gastropubs” and restaurants which are seeking investment to capitalise on increased consumer spending on casual dining.

The EIS is designed to encourage private investment in unquoted companies by offering a range of tax reliefs to investors who buy new shares in the businesses.

It was expanded in 2012 when the government made the scheme available to larger businesses and increased the annual fundraising limit for businesses to £5million, meaning more businesses could raise funding for growth.

Gary Robins, director at Radius Equity, said: “In light of the improving economy, many consumers are feeling a little less guilty about spending their cash on a nice meal or a weekend break. Investors are keen to capitalise on consumers’ growing confidence and see restaurants and gastropubs as good investment opportunities.

“Gastropubs in particular are continuing to prove popular, as consumers turn away from fine dining. Some now have Michelin stars and famous chefs. Consumers appear to be increasingly happy to pay for the premium products they offer.

“Gastropubs and restaurants can provide great returns for investors as skilled chefs can add significant value to relatively inexpensive ingredients, and of course rents are much cheaper for gastropubs which tend to be away from traditional restaurant hotspots like Mayfair and the West End.”

Radius Equity is currently helping two chefs to raise £2.4million through the EIS scheme. They were previously chefs at leading restaurants St John and Jamie Oliver’s Fifteen and are planning a Michelin-standard dining room in east London.

Gary added: “EIS is a great way for SMEs to access funding which isn’t readily available to them through the banks, whilst investors gain generous tax breaks through financing interesting new projects.”

Radius Equity also specialises in the Seed Enterprise Investment Scheme (SEIS) which was introduced in April 2012 to help small companies raise funds in a similar way but in the very early stages of a venture.

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