£82.5 million start up loan scheme to support young entrepreneurs

Young entrepreneurs are going to gain access to finance and support through an £82.5 million start up loan scheme, which has support from former Dragon James Caan.

The scheme is set to help start over 30,000 new businesses in a move to boost enterprise and economic growth.

The StartUp Loan scheme will be available to 18 to 24 year olds, providing expertise and personal support to help develop business plans.

Those with robust business plans will then be able to access financial support through a loan, typically in the order of £2500.

The entrepreneurs will have a repayment period of up to five years while they develop their businesses.

The support available will be administered by a range of organisations that have experience in working with young people. This includes the Prince’s Trust and Manchester-based Economic Solutions Group.

Entrepreneur James Caan will chair a new body to oversee the allocation of funds and to work with delivery partners to ensure the young people gain the maximum benefit from the support and finance on offer.

Director of policy at the centre for economic and social inclusion, Tony Wilson, said: “This is welcome news.  Our own research, for the Fredericks Foundation, has found that start up loans for disadvantaged young people can deliver benefits that far outweigh their costs.

“However the Government plans to make these new loans available to all young people – including those already in work.

“We would want to ensure that the loans are targeted at young people not in education or employment, so that they deliver the biggest impact possible for those young people and for the taxpayer the maximum bang for their buck.”

The announcement coincides with the publication of a report by Lord Young, which showed that if the UK had the same rates of entrepreneurship as the US, there would be 900,000 more businesses in the UK.

Lord Young sets out the strength, diversity and growth of small businesses in recent years in the UK.

The report comes as a clear contrast to the Bolton Report of 1971, which predicted small businesses were in long-term decline.

The internet and the support available from the government and private sector has meant that it is now easier than it has ever been to start a business, quicker to grow and possible to sell globally from your front room.

Linsey Humphries