Two weeks after the prime minister proclaimed that the Start Up Loans scheme had awarded its 10,000th loan, the chancellor outlined a boost to the finance initiative.
The James Caan-fronted Start Up Loans scheme is set to help 50,000 more people found their own business in the future.
As part of chancellor George Osborne‘s Autumn Statement address, a further commitment to the initiative was revealed.
Osborne said to the House of Commons, ‘I can announce a big expansion of Start Up Loans, through which a new generation of entrepreneurs is being created.
‘50,000 more people will be helped to fulfil their aspiration to start their own business.’
The news comes shortly after the Department for Business Innovation & Skills revealed that the funding scheme had dished out 10,000 loans.
Start Up Loans has now lent £50 million to entrepreneurs looking for support in starting up a business and is a third of the way in meeting the target of supporting 30,000 new businesses with £151 million by 2015.
More on the Autumn Statement 2013:
- Entrepreneur and business owner wish list
- Business rates capped at 2 per cent to aid SMEs
- Jobs tax on staff under 21 abolished
Speaking back in November, former Dragons’ Den investor Caan said, ‘Providing this vitally needed funding and support for fledgling businesses is exactly what our country requires, creating jobs, and strengthening the economy, improving enterprise.
‘There is still much work to be done; now we have lifted the age cap our focus has be on helping all entrepreneurs of all ages come forward to start their business.’
Simon Hill, managing director of Wazoku, says, ‘Capping the increase on business rates at two per cent and allowing businesses to pay in 12 monthly instalments will help of course, but the best measure was the expansion of the Start Up Loans scheme.
‘Access to finance remains the key issue for many entrepreneurs and as long as the red tape around the loans scheme is manageable then start-ups all over the UK will benefit from the expansion.’
Back in October, Richard Branson’s new Virgin StartUp initiative announced that it would be providing loans to entrepreneurs aged 18-30 alongside the Start-Up Loans Company. The programme came on the back of a pilot programme which ran in the North East involving Virgin Money. During 11 months of operation, it helped 100 businesses and facilitated £600,000 of lending.
Despite the new pledge from Osborne, Xenios Thrasyvoulou, founder of online freelancer marketplace PeoplePerHour, says: ‘The chancellor extended the business relief scheme for another year and announced another 50,000 new start-up loans. However he skimmed over how firms will be able access these funds, how long the application process will take and, crucially, who will be eligible.
‘The problem for small businesses has not been that lenders don’t have cash to lend, it’s that there are far too many hoops to jump through and red tape to cut to even get to the front of the line. Unless these funds are really open for businesses, this is just another hollow promise, a headline initiative with very little hope of doing what the government has earmarked it to do.’