Being part of the Union will help SMEs gain easier access to funds

LAST week marked an important milestone in the evolution of Europe’s capital markets, and in particular the region’s small and medium-sized business (SMEs).

Lord Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union outlined his plan for building a Capital Markets Union (CMU) – to realise a single market for capital across all 28 EU member states.

What does this mean? The core of the Capital Markets Union Action Plan is to build up the role of financial markets within Europe, supporting the region’s ability to fund job creation and growth.

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Its objectives include improving access to financing for all businesses across Europe and investment projects, in particular start-ups and SMEs. Its aim is to increase and diversify sources of funding from EU and global investors and work to make the markets function more effectively, so that more efficient connections are created between investors and those who need funding.

For many people, London Stock Exchange is synonymous with listings and trading but the group’s role within the financial community extends much further than this. The diversified and international nature of our business brings us together with governments and policy makers from around the world, allowing us to work together on key issues affecting the financial markets.

In the UK and across Europe, we are committed to working with policy makers to enhance the SME funding environment and attract a wider set of investors, both individual and institutional, to the capital markets.

It is this fundamental belief in the power of SMEs and recognition of the need to make it easier for them to raise funds on public markets that we clearly share with the EU Commission.

To celebrate the Capital Markets Union Action Plan, London Stock Exchange welcomed Lord Hill, along with a host of European SMEs to London Stock Exchange last week. At the event, he discussed the significance of boosting investment in EU growth companies and met with a number of fast-growing businesses, to canvas their thoughts on the proposals.

We welcome the important progress that the Capital Markets Union will make in better connecting SMEs to funding because we too believe that for the EU economy to grow, SMEs need to be nurtured, supported and promoted.

They are the largest source of new, high quality jobs and in order to expand they require easier access to financing. What’s more, we believe funding must be more balanced towards equity, reducing the reliance many SMEs still have on bank loans.

This is a goal we have shared for some time and the reason that we have extended across Europe this year, ELITE, our pioneering business support programme designed to help firms prepare for the next stages of growth.

ELITE introduces the leaders of ambitious companies to business school resources and gives them access to a community of leading advisers and investors.

Through the programme, ELITE companies gain access to knowledge and sources of funding to help them grow, be that venture capital, private or public equity.

The ELITE community now totals 271 companies, more than 150 partners and 90 long term investors and we will be welcoming our next cohort of UK companies in November.

A true Capital Markets Union, alongside initiatives such as ELITE, will allow more of the best and brightest fast growing businesses to access capital, in turn stimulating economic and job growth, essential to the future economic prosperity of Europe, a common goal we all share.

We want more of Yorkshire’s inspiring companies to find out about ELITE: please visit