In order to encourage young entrepreneurs to start business the government has recently expanded its Start-up loan scheme.
The amount of loan available remains unchanged at £2,500. What has changed is the age which an applicant needs to be, it is now extended to those between age 18 and 30 (previously 18 to 24 years old). The loans are targeted to individuals rather than corporate entities. To support the increase of age range of prospective applicants the funding available has increased from £82m to £112m.
The scheme, launched in May 2012 has only lent a fracture of its total fund by the end of December 2012. By then, it had only lent £1.5m to 3,000 applicants. The target is to lend the total fund amount by April 2015 and to benefit 45,000 applicants.
The company responsible for start-up loans is chaired by James Caan.
The scheme expansion was announced by David Cameron, stating:
'The government's role has to be to try to do everything we can to encourage more start-ups and then to help them grow, to get finance and take people on.
The scheme was created by Lord Young and was seen as a way of reducing unemployment as well as creating an environment to encourage entrepreneurialism similar to that in the US.
The loans must be repaid within five years with an interested rate of RPI plus 3%.
For further details on this scheme, the conditions, and how to apply please go to the Start Up Loans website.
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