VCT investments have doubled in the last year, helping to boost small business as they recover from the effects of the recession.
Figures from the Association of Investment Company show that £340 million was raised by the VCT sector during the 2009-2010 tax year compared with less than half (£158 million) in the previous tax year. This year’s investments are the fourth highest since VCTs were introduced 15 years ago.
The news has been praised, saying it will help develop smaller business at a time when banks are reluctant to lend money.
Director General at Association of Investment Companies, Ian Sayers, said: “This year's impressive fundraising will increase VCTs' capacity to support companies which find it difficult to raise development capital. It is particularly valuable given banks' continued reluctance to lend to small businesses.
“This money will support enterprises across the UK in key growth sectors, help create jobs, develop export markets and increase investment in research and development.
“This year's fundraising demonstrates investors' continued willingness to support VCTs. Whatever the outcome of the General Election, policymakers should maintain their position alongside other policy initiatives designed to support future economic growth and, in the long term, help rebuild the public finances.”
VCTs, or Venture Capital Trusts, were introduced in 1995 to encourage investment in very small companies which are looking for further investment to develop their business. These companies’ shares trade on the London stock market, just like Lloyds TSB or BT. But unlike banking or telecoms a VCT aims to make money by investing in other companies.
To compare a range of VCTs click here »
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