Can retail investors solve the SME funding gap? Sharemark launches primary fund-raising platform

Marketwatchers and investors in the SME space will be interested to see the latest venture announced by Sharemark to provide small and medium sized businesses access to a fundraising channel aimed at retail investors.  There has been much talk of late here and elsehwere as to the difficulties faced by SMEs when looking to raise finance. Likewise, all too often private investors are neglected from company fundraisings which instead instead on raising institutional funds through placings. However, this summer, HM Treasury plans to implement the doubled Prospectus Directive limit.

In response, Sharemark is augmenting its existing secondary market activities to allow smaller firms the opportunity to raise between €500,000 and €5m of primary fund-raising on its platform. Investment on the market will be channelled through The Share Centre (LON:SHRE), Sharemark’s parent company, as well as a number of third party brokers. Lesmoir-Gordon, Boyle & Co will provide corporate finance expertise; while legal expertise will be provided by Squire Sanders Hammonds. SMEs will also receive access to up to £10m bank debt through Clydesdale Bank under the same due diligence process.

Gavin Oldham, Chief Executive of The Share Centre, said:

“This venture from Sharemark offers a timely solution for SMEs whose growth has been held back through the restricted lending opportunities available. It also provides retail investors, who have generally been denied access to new issues over recent years, with an excellent chance to share in this success by being able to invest in the companies, free of both dealing commission and stamp duty".