Grant Title
Selective Finance for Investment in England (SFIE)
With effect from 1st September 2008 Tier 3 classification has been extended to the whole SEEDA region.
Description
Selective Finance for Investment (SFIE) is a national Department of Business, Enterprise and Regulatory Reform (BERR) grant scheme, run by the Regional Development Agencies, which for the South East is SEEDA. It is available to businesses located (or intending to locate) in Assisted Areas for new investment projects leading to improvement in productivity, skills and employment. The greater the gains in productivity, skills and employment to a region, the higher the support offered.
Grant Value Notes
SFIE is available to businesses in specific geographical areas. Within the South East region the Assisted Areas (Tier 2) includes all 23 wards in Thanet and 3 wards in Dover (namely Eastry, Sandwich and Whitfield) where it can cover upto 35% of eligible costs. In addition SME’s may apply within the Tier 3 areas of the South East for up to 15% of total eligible project capital expenditure plus some discretionary lease and salary costs.
The minimum grant that can be applied for is £10,000. Investment projects seeking support of £100,000 or more must create new jobs or safeguard existing employment.
The majority of funding for the project should come from private sources, e.g. the applicant, bank borrowings, lease finance, equity and loan finance. If the company or any of its directors have previously received public sector support this will be taken into account when considering whether to offer a grant.
Extended Description
Financial support is available within the Assisted Areas (Tier 2, there are no Tier 1 areas within the south east) to businesses of all sizes and to SME’s only within Tier 3 areas that are investing in manufacturing or involved in service industries that serve (or plan to serve) a national / regional rather than a local market, for investment projects that lead to long-term improvements in productivity, skills and job creation through expansion of the business.
The SFIE grant scheme:
- assists businesses to increase productivity by funding capital investment in equipment and technology.
- It is for SMEs looking to expand, modernise, diversify and increase productivity to maintain or establish sustainable, growing businesses providing skilled jobs.
- From 1st September2008 SMEs across the whole region will be eligible to apply. Awards are entirely at SEEDA's discretion in respect to the Regional Economic Strategy, the scheme's criteria and value for money to the public purse.
- Grants of up to a maximum of 15% of eligible project costs, up to a maximum of £2.5mn are available to small-sized enterprises (determined by the EC definition of an SME). Grants of up to a maximum of 7.5% of eligible project costs, up to a maximum of £1.25mn are available to medium-sized enterprises.
The scheme has two objectives:
- to assist regeneration of underdeveloped areas by encouraging businesses to locate in these areas;
- to assist SMEs with funding where the financial markets are overly risk averse or insufficient collateral can be provided to satisfy commercial lenders.
To determine whether an application would be successful, consideration is given to meeting the Regional Economic Strategy, the scheme's criteria (one of which is level of regeneration benefits so location will have some bearing on weak/stronger case and value of award), and need for grant/value for money to public purse. All grants are awarded entirely at SEEDA's discretionary. There is no automatic entitlement.
Many of the Economic Development Departments of the Local authorities in Kent in conjunction with Locate in Kent Grant Advisors, offer free, confidential hands-on assistance to help with the evaluation of projects and the completion of grant application forms.
Eligible Expenditure
Grants are awarded as a percentage of eligible project costs.
Project expenditure must involve capital expenditure on fixed assets such as property, plant and machinery. Assets may be purchased outright or by using lease finance or hire purchase, however, other than in the case of land/buildings, this must be a financial lease and there must be an obligation to purchase the asset when the lease expires.
In some cases property leases and up to two years wage costs of key skilled jobs created directly as a result of the project costs may be eligible, together with some intangible assets and certain non-recurring costs such as patent rights and professional fees are also eligible.
Projects which only involve moving into a new premise, with little expenditure on capital equipment (other than fit-out costs) are unlikely to be supported as these will not meet the objectives of the scheme.
Working capital spent on a project does not normally qualify, but may be taken into account when determining the need for support.
Restrictions
The European Commission restricts aid to certain sectors
- Local Consumer-type Service activities (e.g. retailing)
- Mining and Construction – if employment is not permanent
- Tourism
- Charitable Organisations – unless they are of a commercial nature
- Franchise Operations
- Hospital Projects – as the primary health care sector is supplied by the NHS
- Education – Schools/Colleges – as this is covered by the Dfes
- Energy Generation Projects – if they only serve a local market
- Companies controlled by the public sector
Support is not available for projects in sectors of the UK economy that are already fully served or for projects that are likely to lead to displacement of similar employment already present in the district. Projects involving local services, for example retail outlets, restaurants or legal and accounting practices, would be considered ineligible for support. Click here to view restricted sectors
Application Procedure
The South East England Development Agency will administer and appraise the majority of applications, however larger investment projects (i.e. those over £2m grant) will be appraised by the Department of Business, Enterprise and Regulatory Reform (BERR).
Applications are normally assessed within 30 working days, although this may take longer for complex cases.
Payment Procedure
The grant is taxable and is normally paid in instalments, triggered by the achievement in reaching fixed capital expenditure or job targets set out in the formal offer of support.
Successful projects will be monitored for a minimum of five years through to completion of investments to ensure the conditions of the offer have been met.
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