Start-Up Loans will provide budding entrepreneurs between the ages of 18-24 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 announcement was made by Business Secretary Vince Cable as he spoke of the Government’s support for Small and Medium sized Enterprises (SMEs) at the MADE entrepreneurial festival in Sheffield. He met some of the young people who have received a Start-Up Loan and are taking their first steps in business.
Vince Cable said:
"With more young people than ever before looking to start their own business, Start-Up loans will provide the support they need to help get their business ideas off the ground. The scheme is not just about money. They will also get access to professional mentors who will pass on their knowledge and expertise about running successful enterprises. Money is going out of the door now, so those who want to take advantage should apply today."
The scheme is being led by the newly formed Start-Up Loans Company, led by entrepreneur James Caan. So far 1,200 people have registered an interest in applying for a loan.
James Caan said:
“Start-Up Loans are exactly what young people need to get them on their way to launching their own businesses. Through the Start-Up Loans Company, we are encouraging young people to be more entrepreneurial by taking their future into their own hands and creating their own opportunities.”
The latest list of service providers that will work alongside Start-Up Loans Company have also been announced today. 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)
The Business Secretary was in Yorkshire to celebrate the positive impact that entrepreneurs and SMEs have on the economy. Following the MADE festival he visited Gripple, a growing business in Sheffield that produces wire joining and tensioning devices used in the agriculture and construction sectors. He also met young entrepreneurs from Gripple’s ‘Incub’ project, an ideas incubator aimed at helping budding entrepreneurs fast-track their concepts to market.
Since the launch of the original product in 1988 more than 300 million devices have been sold across 75 countries. The company has also been growing by 15 per cent each year.
Vince Cable said:
"Businesses like Gripple are exactly the kind of enterprises that will help boost our economy - hi-tech, highly skilled with an impressive export record. Sheffield is a hotbed for these kinds of success stories. The Yorkshire region has a wide range of growing businesses, particularly in the manufacturing sector, and we want to see more.”
This year the Government is running the Business in You campaign to inspire more people to start or grow their business backed by a range of existing business support services provided by the public and private sectors. More information is available at www.businessinyou.bis.gov.uk.
Note to editors:
1. Start-Up Loans are designed for 18 to 24-year olds who are interested in starting a business including those unemployed, in full time education or employment; starting a business or in the early stages of development – but are lacking access to the necessary finance or support to realise their ambitions. For more information visit the website www.StartUploans.co.uk.
2. Start-Up Loans will be 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, subject to the pilot demonstrating that there is demand from young people and capability within the support network to engage and support them. We will be looking to engage commercial partners to further build the lending pot.
3. To administer the Start-Up loans lending pot, the Government is creating a new body to provide guidance and direction; the Start-Up Loans company. James Caan has agreed to chair this new body and has already recruited a team to bring real expertise to the delivery of the scheme.
4. 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.
5. The launch of Start-Up Loans form an integral part of the Business in You campaign with specific, targeted messages to 18 to 24-year olds http://businessinyou.bis.gov.uk/
6. The Government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries.’ It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:
- To create the most competitive tax system in the G20
- To make the UK the best place in Europe to start, finance and grow a business
- To encourage investment and exports as a route to a more balanced economy
- To create a more educated workforce that is the most flexible in Europe.
Work is underway across Government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the Government wants the economy to travel.
7. BIS's online newsroom contains the latest press notices and speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.