Growth-focused measures announced in last week's Budget could help support business growth within the small and medium-sized enterprise (SME) sector, it has been claimed.
According to John Cridland, director-general of the Confederation of British Industry (CBI), widening the scope of the Enterprise Investment Scheme will bridge the funding gap for SMEs.
This could "unleash a new wave of finance" for the most entrepreneurial businesses, he claimed.
"Doubling the lifetime limit on entrepreneurs' relief within Capital Gains Tax will encourage them to keep on innovating and growing their businesses, as well as providing much-needed investment for start-ups," Mr Cridland added.
He noted that increasing the SME Research & Development tax rate will make the UK a more attractive place to invest.
This should help reduce the cost of doing research and development work by a quarter by 2012-13, Mr Cridland stated.
Last week, the Federation of Small Businesses called for additional support for the SME sector, claiming that such enterprises hold the key to sustained economic growth.
John Walker, national chairman of the organisation, urged the government to ease operating conditions for small firms wherever possible.