Start-up loans for young entrepreneurs expanded

Over the past year, we saw swathes of government policies aimed at getting business moving in this fetid economic climate, some promising, some half-baked. Now there's a new one, or at least a development of an old one, to inspire or deflate entrepreneurs for the new year.

A £30 million boost to the government’s Start-Up Loans scheme has been announced by the prime minister in an attempt to give the next generation of entrepreneurs the finance and support to start their own business. We are told more than £110 million is now available to create ‘tens of thousands’ of 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.

Some 3,000 people have applied or registered an interest in a Start-Up loan; these budding entrepreneurs receive support and mentoring to develop their ideas. When the business plan is robust and approved, many 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.

You don’t tend to hear about specific recipients of this money, though. Real-life examples of beneficiaries of the scheme are usually conspicuous by their absence, lost in a melange of government rhetoric and empty promises. Which is why it’s useful to see the government actually releasing inspiring information about case studies, complete with human faces and genuine experiences, rather than just more claptrap.

Take Daniel Cowell, of Daniel Cowell Fitness, for example. As someone who has always been active and played sport, working in an office was not fulfilling Daniel’s job aspirations. Through help from his mum’s business experience, along with the help of a business advisor, he managed to put a business plan together for his bespoke personal fitness training programme and gained a Start-Up loan from Business Finance Solutions. With this, Daniel has managed to build up a good range of fitness equipment and increased his advertisement.

He says, ‘I find that social media has been a good selling point. My Twitter and Facebook page, along with my website have had lots of hits and that seems to be the main source of interest.”

Meanwhile, Elena Mingas, a bespoke fashion designer whose boutique is based in Bury, was the first ever recipient of support under the Start-Up Loans initiative. Her business is reportedly flourishing and she has taken on another dressmaker.

While the talent and promise might be there, so often there is a shortfall in funds. Filmmaking duo Michael Evans and Jason Brown, of Wireside Productions, have produced a music video in Los Angeles that achieved more than 20 million hits, but it took Start-Up Loans money to build a website to launch their business proper.

It goes to show that a little investment can go a long way if diligently allocated. In loaning sums as small as £2,500, the government has put across an important message: that bootstrapping rather than seeking a large chunk of investment is more often than not the way to go for aspiring entrepreneurs.

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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