Small firms given help to invest in poor areas

The Department for Trade and Industry has introduced the Selective Finance for investment (SFI) scheme to increase employment and productivity.

The initiative replaces the abolished regional selective assistance (RSA) scheme and Enterprise grants, which come to an end this month.

The SFI will allow companies in "assisted areas" of Sussex, which include parts of Brighton and Hove, Lewes and Adur, to apply for grants of up to £5 million.

But the main advantage anticipated for small businesses will be at the other end of the scale, where grants can now be given for less grandiose projects.

Under the old enterprise grants scheme, capital projects, such as new buildings or equipment, had to cost at least £500,000 to qualify.

Now businesses wanting to make capital investments of as little as £10,000 can apply for Government help.

The idea is to create more sustainable, grass-roots projects, which will have a greater benefit for the economy in the long run.

To encourage entrepreneurship, projects worth less than £100,000 will not have to comply with job-creation rules that were in force under the old system.

The SFI scheme is more heavily focused on projects designed to lead to long-term improvements in productivity, employment and skills.

Grants will be distributed through the South East England Development Agency (Seeda), which will monitor companies' performance against the sector average.

Businesses have welcomed the change of rules, which they say will help bridge a growing skills gap in Sussex.

David Forge, partner with KPMG at Gatwick, said: "These changes are good news for the region's smaller companies, where skill shortages are proving to be a growing problem.

"The RSA has been the bedrock of the grant support for businesses for many years but smaller projects were excluded by the £500,000 lower limit."

For more details, call Seeda on 01483 484200.

Monday April 19, 2004