Start-Up Loans Extended for Small Businesses

It has been confirmed that the coalition will extend its start-up loan scheme. The government has stated that £110 million has been set aside so that small businesses can be able to take out loans of £2,500 in order to kick-start their businesses. This will be coupled with a lower rate of interest and the upper age limit extended to thirty in an attempt to improve the economy as well as enabling the progression of young entrepreneurs in Britain. This scheme was initially introduced in May last year, however the start-up loan initiative was introduced at that time to entrepreneurs in the age bracket of 16-24, which has now expanded “due to demand”. Prime Minister David Cameron has promoted the expansion of this initiative by stating that it is “an important part of my mission to back inspiration…so this country competes and thrives in the global race”.

According to James Caan, the chair of the Start-up Loans Company, this initiative reflects “the major shift in the way business is viewed by the public” with entrepreneurs now being viewed as “creative and exciting role models”. However, controversy mounted when it was revealed that the funds were distributed unevenly around the country. The region with the lowest lending was North East England with only 3% of the money put aside to fund this scheme while Greater London used 34% of the funds. This has led to many commentators questioning the validity of the distribution of loans, which was corroborated further by Caan who stated to the BBC that the scheme has faced “challenges” despite stating that the programme has the potential to create 100,000 jobs. This is a factor that will be welcomed throughout Britain especially when taking into account the 7.7% of Britain (2.49 million people) who were out of work in latter months of 2012.