14.03.2013
2,000 young entrepreneurs have now had their business dreams backed through the Start-Up Loans programme, and community finance providers are playing a key role.
The Start-Up Loans Company, which administers the scheme and is chaired by Dragon’s Den entrepreneur James Caan, has helped to start 1,000 new businesses in the last month alone.
The success of the Start-Up Loan scheme, which helps young people get their business ideas off the ground with a loan of typically around £4,500 and mentoring support, demonstrates the strong demand amongst 18-30 year olds for self-employment. The scheme has already reached its £10 million pilot spend following high demand, and an immediate £5.5 million injection of funding was approved this week in Parliament to fulfil its pipeline of young businesses until the end of the month.
Twenty community development finance institutions (CDFIs) – ethical lenders providing fair and affordable finance in disadvantaged neighbourhoods – are playing a crucial role in the programme by reaching out to the next generation of entrepreneurs that others can’t reach. CDFIs have the expertise and community links to provide support and finance to young people.
People like Alissa Koopal, a 26-year-old mother of two from Liverpool, who used her loan to help launch her company, Izzy Melody, which produces innovative, eco-friendly baby products manufactured in the UK. Alissa said:
“After making the difficult decision to take the plunge and make my business concept a reality, my loan application was rejected by the bank so I didn’t think I’d ever be able to establish Izzy Melody.”
Alissa contacted her local CDFI, Merseyside Special Investment Fund, which introduced her to the Start-Up Loans scheme.
“Within six days of applying for a Start-Up Loan, I was granted the £2,500 I really needed to launch my business and assigned a mentor who has provided me with vital guidance and support”.
Prime Minister David Cameron said:
“Start-Up Loans are now helping thousands of aspiring young entrepreneurs get the finance and support to strike out on their own and launch their own business. The success of this scheme shows that young people have got the ideas, the ambition and sheer commitment to get ahead – and it is by backing them, and backing their aspirations that we will be able to compete and thrive in the global race.”
What next?
Read more about how CDFIs are helping young people start a business