Good news for young people with entrepreneurial ideas, as the government will be increasing funding, as well as extending the eligible age range.
Young people looking to start up their own Limited company will be pleased to hear Prime Minister David Cameron’s latest announcement, stating that there will be a boost to the government’s ‘Start-Up’ loans scheme.
Funding will be increased by £30 million to £110 million over three years, and due to demand from those who had just missed out on the scheme, the age limit for applying will be increased from 24 to 30-years-old.
The Start-Up loan scheme allows budding entrepreneurs to have access to a low-interest loan (of around £2,500), with a repayment period of up to five years.
According to a government statement, in the three months that the scheme has been running, more than £1.5 million in loans have been approved, allowing 460 new businesses to get off the ground. Around 100 new businesses a week are expected to reach approval stage in January, and thousands more in the months ahead.
However, John Allan, Federation of Small Business (FSB) Vice Chairman, welcomes the changes, but is urging the government to focus on the ‘broken relationship’ between small businesses and banks, following declining lending figures.
He explained, “By increasing the pot for start-up loans by £30 million to £110 million over the next three years, and the age range of those eligible from 24 to 30 in order to meet demand, the Government is moving in the right direction in addressing the gap in small business finance.
“But it needs to pick up the pace considerably and not lose focus on rebuilding the broken relationship between small businesses and banks.
“The Government is indeed acting on a number of fronts but failed initiatives, including Project Merlin’s lending targets, combined with the financial scandals of mis-selling and the manipulation of the inter-bank lending rate, have fuelled scepticism and a sense of alienation among small business owners.
“With the new Funding for Lending and Business Bank schemes in mind, 2013 must bring real results in reducing the cost of lending and boosting competition in order to free firms to create jobs and drive economic growth.”
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