A UK government funding scheme targeted at young entrepreneurs is to be expanded, Prime Minister David Cameron announced today.
An additional GBP30m will be made available to help young people start their own businesses and the age limit for applications will also be raised.
Originally the Start-Up Loans scheme was aimed at entrepreneurs aged 18 to 24 but the upper limit will now be increased to include those aged up to 30.
The extra GBP30m announced today will boost the total amount available to over GBP110m over the next three years, which the government said could potentially help to start tens of thousands of new businesses.
Successful applicants receive a low interest loan of around GBP2,500 to help get their business idea off the ground. The loans must be repaid within five years and interest will be charged at RPI plus 3%. Those who receive financial help will also get assistance and support from an experienced mentor who can offer knowledge and expertise about how to run a business.
The Start-Up Loans Company is chaired by entrepreneur James Caan, who has appeared in the television series Dragons’ Den.
Business Secretary Vince Cable announced in September 2012 that the first loans under the scheme were being awarded, and since then loans with a value of over GBP1.5m have been approved, helping more than 460 new businesses to get started. Around 100 new businesses each week are expected to reach approval stage in January, with thousands more in the months ahead, the government said.
The opposition Labour Party has criticised the length of time it has taken to disburse money through the Start-Up Loans scheme. Shadow Business Secretary Chuka Umunna said today that, with little or no growth in the economy, initiatives such as this must be delivered effectively “if they are to provide real opportunities for our young entrepreneurs”.