A new £82.5 million loan scheme designed to encourage young people to set-up their own business has been launched by the Government today.
The StartUp loan scheme is available to 18 to 24 year olds who will receive loans of up to £2,500 if their application is successful. The loan will be repayable within five years and interest will be charged at the level of the Retail Price Index plus 3%.
There will be an initial pot of £10 million available, which may rise by a further £72.5 million over the next two years if the scheme is judged to be a success.
The scheme will be chaired by ex-Dragons’ Den panellist, James Caan who, along with a selected board of experienced entrepreneurial advisers, will offer guidance to the new entrepreneurs to ensure they maximise their loans.
It is hoped that the scheme will create 30,000 new businesses and generate new jobs for a further 25,000 people.
Prime Minister David Cameron said: “StartUp loans are a fantastic opportunity for young people not only to get the financial support they need but also to give them the confidence to believe they can do it, that they can turn that spark of an idea into the next global brand.”
This announcement should give young people coming out of education and without any money behind them, the opportunity to start their own business. By utilising this scheme, there will be no immediate need for them to resort to obtaining bank finance, which may not be readily available to them, until they have a proven track record and they will get invaluable support when they need it most.
At Farleys we work closely with other local professionals and funders to provide help and advice all aspects of setting up a company and any related matters.
For legal advice on setting up a business, please don’t hesitate to contact us.
By Debbie King, Company Formation Solicitor