Positive news for Silicon Valley Bank

Positive news for clients invested in Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS) after regulators placed Silicon Valley Bank (SVB), a US bank, and its UK arm, Silicon Valley Bank UK (SVB UK), into insolvency. HSBC has agreed to buy SVB UK and protect the deposits of the 3000+ customers that banked with it which has avoided or minimised the damage to the UK’s promising technology companies. SVB and SVB UK provided banking services for approximately half of the venture-backed technology and life sciences companies in the US and UK.

What is a VCT?

VCTs are investment companies that are listed on the London Stock Exchange and set up to invest in small UK businesses that meet certain criteria. To encourage support for these businesses the Government offers generous tax benefits for VCT investing.

What is an EIS?

The EIS is a scheme introduced by the government in 1994 to help small companies raise funds and grow. When you as a private investor invest in an EIS-qualifying company, you could receive very significant tax breaks. Companies qualifying for the EIS are small and usually privately owned, although they can be listed on Alternative Invesment Market (AIM).