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Due Date Wednesday November 1st 2000The funding gap is always quoted as a major issue for dstart up and developingh small businesses What evidence is there to support this view and what measures have relevant organisations taken to overcome the problemThis report critically examine concerned with how young small businesses and start up business fund themselves externally Firstly we look at the funding gap what it is and evidence of its existence Secondly how organisations that fund new and smallusinesses have done to help this problem and finally a reivew of their usefulness This is done in a report styleSME Meaning small - medium enterprise For the sake of this report it is taken here to mean both business that are new or business that are still in the developing stageDTI Department of Trade and IndustrySMEs are an important contributro to the economy defined by the Bank of England as 49 employees or fewer1 In 1997 SMEs accounted for over 40 of the economys turnover and 45 of total employment in the United Kingdom 2 The chart below reveals a bakdown of industry where sme are located including area as well Source bvcacoukStarting your own busines rasises many difficulties and raising the capital is just one of them listed below are the main problems encountered Throughout history seeking external funds has remained one of the most difficult Indeed this is not a neproblem The Macmillian Committee first regcognised the funding issue dubbing it the macmillian Gap in 1931 Today the funding gap can be defined by P Burns J Dewhurst3 aswhere the funding requirements of a company are greater than those that can be met by the small scale providers of finance but not substantail enough to be considered by the large equity providersSource Small Business Finance Report BOE Oct 2000The funding gap is prevelant with start ups and new firms Indeed it is often known that is harder to raise 50000 for
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