Start-up Loans scheme for young entrepreneurs receives £30m boost

The government’s Start-Up Loans scheme, designed to fund young entrepreneurs has expanded to support potential business owners up to the age of 30.

Announced in May 2012, the £82m scheme originally offered loans of up to £2,500 to entrepreneurial individuals aged between 18 and 24.

To meet the needs of the wider range of eligible individuals, funding for the scheme is set to increase to £112m.

Since the launch of the year-long £10m pilot scheme  in September 2012, more than 3,000 people have applied for the loans, which must be repaid within five years at an interest rate set at the Retail Price Index (RPI) plus 3%.

With £1.5m worth of loans approved for over 460 new businesses to date, the scheme intends to distribute the £112m loan total across the next three years, with £42.5m set to be allocated in 2013-14 and £60m in 2014-15.

The scheme, which is run by the Start-Up Loans Company chaired by former BBC Dragon James Caan, also provides successful applicants with mentoring and advice.

Caan said: “Start-Up Loans enable young people to harness their skills, and gives each budding entrepreneur not just a low interest loan, but also the help and support from an experienced mentor to guide them to success.”

Prime minister David Cameron, who is set to announce the expansion at an event in Preston later today commented: “Start-Up loans are an important part of my mission to back aspiration, and all those young people who want to work hard and get on in life, so this country competes and thrives in the global race.”