Proposal to remove start-up loans age cap
The Start-Up Loans initiative was created by Lord Young of Graffham, the Enterprise Advisor to David Cameron.
The existing scheme, which makes low-interest loans available to would-be entrepreneurs, is only available to people under the age of 30.
In this his second report, other proposals put forward by Lord Young include making it easier for small businesses to bid for £230bn a year of public sector contracts and the creation of a £30m voucher scheme to encourage firms to get expansion advice.
Young said: “We have one of the best environments in the world for the creation of new firms. What this report endeavours to do is to help and encourage all those new firms to now take on their first employees and grow.
“Growing our smallest businesses would transform our economy – they are the vital 95 per cent. If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero.
These proposals have been broadly welcomed by the CBI and Dr Adam Marshall, director of policy at the British Chamber of Commerce said
“Lord Young has identified a number of these measures in his report and we are pleased to see him address the problem of access to finance which is still hurting the growth potential of many firms.
“But the focus must now be on getting these proposals off the ground so they can actually make a real difference to the business community, and in turn, drive the economic recovery.”
However, the report has raised some controversy when it cited examples of why a recession was a good time for enterprise.
“The rise in the number of businesses in recent years shows that a recession can be an excellent time to start a business,” he states in his report, adding that “factors of production such as premises and labour can be cheaper and higher quality, meaning that return on investment can be greater. GE, Microsoft and Disney all started during a recession.”
Unions have expressed anger that Lord young’s comments appeared to suggest that advantage should be taken of the fact that there were fewer overall jobs available to enable a reduction in salaries.
Speaking to The Observer, Frances O’Grady, general secretary of the TUC, said: ‘The 2.5 million people still out of work will wonder what planet Lord Young is living on when he claims recessions bring economic gains.’
He added that the government is failing to deal with the ‘living standards crisis’ and advisers like Lord Young are ‘reveling’ in the situation.
Lord Young’s report recommendation for start up loans to be available to those over thirty is exactly what people like sixty three year old Joni Farthing wanted to hear. She is founder and director of Women Outside The Box (WOTB), who went live today on crowd-funding website Seedrs.com. As she tries to raise the £60,000 she needs to take her festival of female entrepreneurship nationwide.
Joni struggled to secure bank finance and too old for a start up loan, despite having built and sold a fifteen person strong business previously, last year, she had to use the tax free portion of her pension to fund the first WOTB festival.