Given the issues surrounding access to funding and credit for SMEs, changes announced in the budget for the Business Expansion Scheme (BES) are to be welcomed by both companies and investors, but with some important caveats.

Essentially, BES is to be renamed the Employment and Investment Incentive. Under this revamped scheme, the limit that can be raised by companies will be increased from €2m to €10m and the amount that can be raised in any 12-month period will be increased from €1.5m to €2.5m. In addition the certification requirements will be simplified. This new incentive will expire on 31 December, 2013.

As the option to borrow from the banks becomes less likely, increasingly companies are looking to BES as a funding option for growth. In that context, increasing the amount that can be raised and easing restrictions on access to that capital is a very positive move.

However, unlike other budget initiatives, this will not be put into force through the passing of the finance bill. Instead, it is subject to approval from the European Commission.

Given significant delays in the past, we would hope to see a sense of urgency and recognition of the importance of timely approval of these changes. We also hope that the certification changes will broaden the scope of applicants for BES funding, allowing more sectors to consider it in the current credit climate.

There are plenty of companies still expanding and creating new jobs on the ground and they need funding to do this. The banks are no longer the first option. Indeed, in the past, companies often used BES as a stepping stone to larger bank credit, but now we see them returning to BES for further development capital.

We have noticed a trend whereby the flow of companies approaching the fund for investment has increased and many are stronger companies than would previously have applied for BES funding.

Consequently investment fund managers are in a stronger position to negotiate stronger returns for the investors from well-established companies. This makes BES an attractive investment option in the current climate.

BES funds can also be a popular tax-relief vehicle for investors as they offer relief at the top rate of tax (on investments up to €150,000, resulting in a net cost of investment of 59%). Furthermore, established, proven funds with diverse portfolios/sectors offer reduced risk exposure.

Some of Ireland's most successful indigenous brands and new high-value development sectors have benefited from BES funding, including alternative energy companies, environmental companies and medical devices firms. Supporting this enterprise culture in its infancy, and in its further development, is more important than ever.

Over the last 15 years the Davy BES funds have invested about €120m in more than 138 indigenous Irish companies across a wide range of industry sectors. These companies include well-known and successful companies such as Helix Health, Green Farm Foods, Euro Environmental Management, CampusIT, Sunshine Juice, Boru Vodka, Glenisk Yogurts, McGarry Internet, Big Red Book Company and a number of wind farms.

The Davy BES fund targets established businesses. We look for certain criteria – such as a strong management team, and a proven product record. The objective of the fund, which is in its 19th year, is to spread investment across different sectors thereby reducing the risk of exposure to any one sector.

Our current fund closing date is 31 December.

Sinead Heaney is a partner in the corporate investment and business advisory department at BDO and a director of BES Management, a joint venture company owned by Davy and BDO