16 May 2012

Buckinghamshire’s young entrepreneurs wait for loan incentive

Young business people in the Buckinghamshire region are no doubt wondering when the final details of the government’s loan scheme for entrepreneurs, announced in the Budget, will be known.

The one-year loan scheme, which will be launched by March 2013, will enable up to 7,000 young people (aged between 18 and 24) to apply to borrow between £5,000 and £10,000 to back their business idea. Before being granted the loan, it’s expected the scheme will provide applicants with mentoring to help develop a viable business plan and gain more skills.

The government is looking for third parties to administer the scheme and plans to introduce it on a permanent basis if successful.

Colin Fletcher, Partner at the High Wycombe office at Haines Watts, said, “Important questions remain unanswered about the scheme - it’s not yet known what rates of interest will be charged – and it’s not clear what will happen if a young person’s business fails after they’ve received the loan. This pilot scheme for start-up businesses may run on similar terms to that of the student loan scheme but with that, people only start paying money back when they’re earning. If the young entrepreneur’s business fails they may not have the means to pay a loan back. However, if they can sort these details out, this could be a useful lifeline to young people trying to set up a business.”

Tara Burn, winner of the Haines Watts Young Entrepreneur of the Year competition 2011, said, “I think that making loans more available for those with good business ideas for start-ups will be a great help. I’ve been offered loans before but they’ve not been at viable rates. This scheme would allow people to invest in their business and in return grow, encouraging employment and supporting their local economy.” But Tara adds, “I think the government could do more to help provide information for business start-ups. In the past we had local services but many have recently seen enormous cuts and the information they provide is a great deal less than when I started up.”

Haines Watts will also be interested to see what comes of the Chancellors’ Budget remarks about the need to reform the UK school system, so that young people leave education better prepared for the world of work.

For details of the Haines Watts Young Entrepreneur of the Year 2012 competition, visit www.hwye.co.uk

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