The additional money will boost the total pot for Start-Up loans to over £110 million, which will help start over 40,000 new businesses. The Prime Minister also announced that due to demand from those who had just missed out on the scheme, and the challenges faced to secure loans to start a business; the age limit for application will now be extended from 24 to 30 years old.
Since its launch over 3,000 people have applied for a Start-Up loan. These budding entrepreneurs receive support and mentoring to develop their ideas. When the business plan is robust and approved, they will be able to access financial support in the form of a low interest loan typically in the order of £2,500 with a repayment period of up to five years.
In the few months that the scheme has been live, hundreds of loans have already been approved - with thousands more expected to reach approval stage in the weeks and months ahead.
Prime Minister David Cameron said: "Start-up loans are an absolutely central part of my mission to back aspiration, and all those young people who want to work hard and get on in life, so this country competes and thrives in the global race.
"They are a superb way to help this next generation of entrepreneurs get the financial help - and the confidence - to turn that spark of an idea, into a growing, thriving business.
"It is by backing our entrepreneurs and championing small business that we can drive forward and grow the economy, and equip this country for the highly competitive era we are in."
James Caan, Chair of the Start-up Loans Company said: "There has been a major shift in the way business is viewed by the public, and entrepreneurs are now seen as creative and exciting role models; and I am delighted to see that more and more young people are now looking to set up their own business.
"It is only with this renewed focus on youth entrepreneurship, that we will create more jobs and wealth and see the economy flourish once again.
"Start-Up Loans enables young people to harness their skills, and gives each budding entrepreneur not just a low interest loan, but also the help and support from an experienced mentor to guide them to success. I am proud to chair the Start Up Loans Company, responsible for delivering this excellent initiative."
Michael Fallon said: "As well as Start-up loans, the Government is taking action on a number of fronts to help SMEs get the finance they need to grow. This includes:
- The Funding for Lending scheme to encourage banks to boost lending in the UK economy;
- Generous tax schemes for people investing in start-ups and growing companies in UK; and,
- Up to £20 billion in new, cheaper finance for businesses through innovative Supply Chain Finance scheme."
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For more information, and details on the Start Up Loans Company and how to apply for a loan visit the website www.StartUploans.co.uk
Start-Up Loans provide budding entrepreneurs between the ages of 18-30 with a range of support, including access to a business mentor and capital, in the region of £2,500, to help get their business idea moving. The Business Secretary announced in September 2012 that the first loans were being awarded http://news.bis.gov.uk/Press-Releases/Young-entrepreneurs-get-access-to-first-start-up-loans-68061.aspx
Those who apply will get access to personal support with the most viable progressing on to formal business planning and mentor support. Where the business plan is robust and approved, they will be able to access financial support in the form of a loan. The loan will typically be in the order of £2,500 - directly comparable with existing lenders in this area such as the Prince's Trust - and the longest permissible lending period will be 5 years. On average, it is estimated that the loan period will be around 3 years but the decision on duration will be based upon the individual business plan. The interest rate will be at RPI plus 3 per cent. Delivery partners will repay loans and interest back to a central fund, which can then build a revolving lending model. The Start-Up Loans will be available in England only.
Start-Up Loans are being supported with £10 million for a pilot scheme this financial year, with a further £32.5 million in 2013/14 and £40 million in 2014/15 being made available to grow the scheme. The Prime Minister announced today that there will be an extra £10m in 2013/14, and £20m in 2014/15, details of this will be in the forthcoming Budget.
To administer the Start-Up loans lending pot, the Government created a new body to provide guidance and direction; the Start-Up Loans Company, chaired by James Caan, bring real expertise to the delivery of the scheme.
Start-up loans are delivered by a host of service providers that will work alongside Start-Up Loans Company. They include:
- The Prince's Trust
- Business Finance Solutions, Manchester
- South West Investment Group (SWIG)
- Young Britain
- Let's Do Business
- North London Community Finance (NLCF)
- PNE/Virgin
The launch of Start-Up Loans forms an integral part of the Business in You campaign which encourages the start up and growth of new businesses. http://businessinyou.bis.gov.uk/
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