Great news for the UK, the Prime Minister has announced a business loan start up scheme for young people. £82 million has been put aside for young people aged between 18 – 24 to help them set up their own businesses.
The loan scheme has been launched following an enterprise review which says the UK would have 900,000 more businesses if it had the same rate of entrepreneurship as the US. The loan scheme is designed to help and promote entrepreneurship in the UK and on top of the small business loans provide mentoring and support for young start up businesses.
The business loans will have a maximum term of 5 years and will attract an interest rate of around Retail Price Index (currently 3.5%) plus a margin of 3%. Which is a good and cheap interest rate in this economic climate for a start up business with no track record of performance.
James Caan the former Dragans Den start has been appointed the Chairman of the initiative and he is hoping that the loans will be distributed via at least 12 organisations that currently work with young people. It is also believed that James Caan would like to see private organisations match fund the small loans in an effort to give the government scheme far more leverage.
James Caan said “I’m hoping it will fund 75,000 new businesses. If one in three of those hire at least one person, that could be 100,000 people helped out of unemployment,”
At the moment enablefinance.com do not know who the organisations are that will be tasked with distributing the loans and support but we will keep you posted.