24th May 2010

A new financial advisory service that will help over 4,500 of the capital's small and medium sized businesses raise nearly £65m was announced today by the Mayor of London, Boris Johnson. The Mayor unveiled the £10million funded 'Investment and Finance Readiness' programmes at his Business Question Time in Blackfriars, accompanied by the capital's leading business lobbying groups. The funding is split between two services - 'Gateway to Finance' and 'Gateway to Investment'.

The programmes will build on the success of the previous investment programmes in the Mayor's Economic Recovery Action Plan that helped small and medium sized businesses in the capital raise nearly £14m. The London Development Agency has invested £2.5m in each programme with match funding from the European Regional Development Fund, making the total investment £5m per project.

Businesses that receive funding will benefit from specialist guidance in understanding their finance needs and will develop the skills necessary to successfully raise debt or equity. The programmes are aimed at accelerating business growth and will be measured through increased turnover and job creation. It is estimated that the programmes will help participating businesses raise £64m altogether.

The Mayor of London, Boris Johnson, said: "London has the people and the spirit of enterprise to pull itself and the UK out of the recession. The role of good government is to support this by ensuring that businesses have access to the good advice and finance that is sometimes hard to find on the open market. That's what this body will do - making an important contribution to renewing the economic vibrancy of the capital."

Sue Terpilowski, Chairman, London Policy Unit, Federation of Small Businesses, said: "The FSB welcomes this recognition as it will be micro and small businesses, which will create the jobs as we come out of this recession and as we know from our own member's access to finance has been one of the major challenges. We hope the banks will follow the same level of confidence and enthusiasm that the Mayor has shown in making finance and financial support available to new and existing businesses."

"Gateway2Finance" will advise up to 2,750 small and medium businesses that are seeking bank loan finance with firms receiving tailored support to help them refine their business proposition, understand what sources of funding are available to them and what potential funders will be looking for in a proposition. 540 businesses that will receive more intensive support are projected to raise £16.2m. The "Gateway2Investment" programme will attract 1,750 firms seeking equity finance. Workshops and one to one support will be provided and 105 SMEs who receive the most intensive support will seek to raise a total of £48m.

The LDA and delivery partner Grant Thornton have drawn on the support of high profile business people to support companies with the potential to grow. This includes Brent Hoberman, founder of lastminute.com and mydeco.com, who will be working closely with the programmes.