The Prince's Trust startups programme was set up in 1983 to help 18-30 year olds start their own businesses. It provides financial help and business support for entrepreneurs in England and Northern Ireland. The Prince's Scottish Youth Business Trust is a very similar scheme run for 18-25 year olds in Scotland.
Who is eligible?
Applicants must be within the stated age range, have limited means and be unemployed or working less than 16 hours a week. Both Trusts are last resort funds and applicants must have been unable to obtain funding from other sources. The applicant must have a viable business idea and be able to show enough initiative and commitment to make it succeed. Special effort is made to help those often overlooked by established business communities; ethnic minorities, ex-offenders, people with a disability, those living in deprived areas or in bad housing conditions, or those with limited formal education.
What does it offer?
The Prince's Trust offers startup loans of up to £5,000. They are repayable at 3% per annum with no repayments for the first six months. Expansion loans of up to £5,000 are available after the loan or grant and are repayable at 4% per annum. The total of both loans must be less than £5,000 and both repayments can be spread over three years, though this can be renegotiated if the entrepreneur is in financial difficulties. In exceptional circumstances grants are offered of up to £1,500 to individuals, and to £3,000 to groups. Test marketing grants, of up to £250, are also available to help applicants assess whether there is a market for their product or service.
The Prince's Scottish Youth Business Trust also gives loans of up to £5,000 and grants of up to £1,000. There is no automatic 6 months delay on repaying the loan but a delay can be negotiated as long as the total of both loans does not exceed £5,000.
Both loans are repayable over 4 years maximum, unless under special circumstances, and are repayable at 4% per annum. Between £10,000-£30,000 equity finance is available under the Scottish Equity Finance for You scheme, for businesses that do very well and want to expand further using equity finance.
Both trusts allocate the businesses they help a business mentor, usually a volunteer from the local business community. They donate about four hours monthly to advise the business, provide contacts and track their progress. The monitors submit a monthly report to the Trust that provides early warning if things are going wrong. Business support managers monitor the contact between the Trust and the mentors.
How does it work?
If you want funding, you must approach their local area office to talk about their proposal with the area manager. You must then prepare a business plan. The area manager can give help and advice with this and may even suggest taking a course. The trusts can't offer financial help towards courses but have good contacts and usually know of cheap or free local schemes. Once the plan is complete the area manager will visit you to discuss it further.
The next step is to present the plan to a local trust board, made up of volunteers from the local business community. The board takes the opportunity to talk to you and make sure you have the knowledge and commitment to see the plan through. The board then decides whether the loan should be awarded and the sum to be awarded. If you are successful, you will receive the loan and be assigned a mentor within a couple of weeks.
Does it work?
The Prince's Trust has set up many tens of thousands of businesses since it was set up in 1983 and 60% of these businesses are still going after 3 years. 53% of these businesses have traded beyond three years.
Where to go for further help?
The phone number of the head office for England is 020 7543 1234. The head office in Scotland can be contacted on 0141 204 4409. They can give details of local offices. Alternatively job centres have details of the trusts under training and self-employment options.