With the economy in the state it is in, David Cameron has made a move to help kick start businesses for young entrepreneurs between the ages of 18 and 24. These loans are said to be ‘affordable’ and government backed.
The object of the programme is to enable young people with a viable business plan to borrow up to £2500. Conversely, older business professionals are still lamenting the fact that government is not doing enough to stimulate growth which is evidenced by the unexpected drop in the first quarter to 0.3%
As well as having funds available, many believe that these young entrepreneurs will also have the benefit of a mentor to help them develop and build their respective businesses. According to news sources, if this programme is a success then more money will be pumped into the scheme. It is estimated that as much as £75 million could be used for this purpose – public money, that is.
It is thought that Virgin Money will be applying to manage and distribute a large portion of these funds/loans. The programme is being called ‘StartUp Loans’ and within a 3 year timeframe the amount loaned could reach £82 million, or more. Mr Cable believes that this is a concerted effort to stimulate business growth amongst young entrepreneurs while moving away from the focus of Labour to send at least 50pc of school leavers on to higher education.
Virgin Money will not be the only entity making application to manage these funds as the programme is intended to be administered by the private sector, even though the funds are public monies. Citing figures from the United States, Lord Young of Graffham, the prime minister’s enterprise adviser, stated that the UK would have at close to one million more businesses if they had a similar path to entrepreneurism as in the US.