Start-Up loans: a step in the right direction
James King, MD of Find Invest Grow, shares his views on the recent launch of the Start-Up loans scheme.
From this week, budding hopeful entrepreneurs aged between 18 and 24 with a “viable” business idea will be able to apply for “affordable” loans of around £2,500 from the government to help kick start their company.
The aim of the £82m Start-Up loans scheme, which includes training and mentoring, is to provide young entrepreneurs with an alternative route to employment and unleash a new wave of enterprise to support much-needed economic growth.
Predictably, the launch of the new initiative yesterday has been received with mixed reactions.
But while the loans are by no means the answer to youth unemployment and stagnant local economies, they signal a positive step in an otherwise depressing economic landscape. The initiative offers a way for young entrepreneurs to gauge interest in their idea before approaching larger investors or even discover that their business plan is not viable at an early stage.
Criticism centres around the size of the loan which, at £2,500, many believe is too small. But for young entrepreneurs just starting out, the scheme does represent a significant opportunity, as taking on a larger loan is often too much of a risk.
£2,500 is meaningful amount, in terms of providing the financial cushion needed to thoroughly assess and test a business idea. It provides an opportunity to gather valuable feedback to see whether it is worth continuing with a business. Nothing to be sniffed at when you consider a review by former Conservative minister Lord Young of Graffham which reported Britain would have 900,000 more businesses if it had the same rate of entrepreneurship as the US.
In fact there is a lot Britain can learn from the US when it comes to fostering a more entrepreneurial culture among young people.
But while starting your own business in the current climate may seem like an attractive idea, it is important to remember that it is not for everyone. Not everyone has the right skill set to start their own business and people shouldn’t be led to believe they can. That said, those that do, should be given the chance to flourish.
This was posted in Bdaily's Members' News section by James King .
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