28.05.2012
StartUp Britain launch StartUp loans for young people – and CDFIs feature in new report from Prime Minister’s enterprise adviser
CDFA’s chief executive Ben Hughes today welcomed a new package of loan finance and mentoring for young people wanting to start their own businesses – and said community finance providers are logical delivery partners for the scheme.
And CDFIs feature within a new report on supporting start-up and small business development by the Prime Minister’s enterprise adviser, Lord Young, which was launched today and states:
“I do not believe that the reduced availability of bank finance should mean that businesses cannot access appropriate sources of finance. Many small firms are finding other, and often more suitable finance options available and I want to raise awareness of these alternative sources so that businesses can access the finance they need.”
The StartUp loans scheme will see young entrepreneurs get access to £82 million-worth of loans to help them to start new businesses, David Cameron has announced, saying he hopes the initiative could lead to 30,000 more start-ups and unleash a “new wave” of enterprise to support much-needed economic growth.
Loans of £2500 on average will be offered to young people aged 18 to 24. As well as the loan, which can last up to five years, with an interest rate of RPI plus 3%, participants will also receive help in developing a business plan and training.
The entrepreneur James Caan will chair a body that will oversee the allocation of the loans, which will start being paid on a pilot basis this year in a first tranche worth £10m.
Caan told the Financial Times: “This scheme could not have come at a better time because the options for young people at the moment are quite limited. One of the biggest lessons I learnt from Dragons’ Den was that almost everyone who came on who wanted capital wanted mentoring as well. They had a good business idea but wanted to know how to implement it. That is what we will be doing here.”
The launch coincides with the publication of a report “Make Business Your Business” from Lord Young, enterprise adviser to David Cameron, saying that there would be 900,000 more businesses in Britain if it had the same culture of entrepreneurship as the US.
Ben Hughes, CDFA’s chief executive, said: “With a proven track record of over ten years of providing access to both finance and mentoring for small businesses, community finance providers – CDFIs – make logical delivery partners for the StartUp Loans scheme. We welcome any new measures to increase the availability of finance. Our members can work with StartUp Britain to help young people access finance and high quality support to make their entrepreneurship dreams reality.
“Meanwhile the Make Business Your Business report, which was launched today by Lord Young, justifiably featured community finance providers (CDFIs). CDFIs are an essential part of the finance market place, distinct from and complementary to crowdfunding and peer-to-peer lending, and both affordable and vital in an economy in which 370,000 businesses cannot access the finance they need. By forging relationships, providing high quality mentoring and support alongside finance, and working in underserved locations and markets, CDFIs have long seen opportunity which other finance providers have ignored – creating thousands of jobs, businesses, and social enterprises.”
What next?
- Read about CDFA’s JUST Finance campaign for more support and growth for the ‘Unsung Heroes’ of the finance sector and get involved easily yourself
- Find out more about StartUp Loans on the StartUp Britain website
- Download the Make Business Your Business report – “the first comprehensive report on small and medium-sized enterprises (SMEs) since the Bolton Report of 1971” – here