The Government has finally announced more details for the youth start-up loans initiative with an offer of a grant of around £2,500 over 3-5 years.
The initiative announced in the budget this year, aims to bring parity to those young people who don't want to go to University but instead want to launch their own business, by providing student-loan like grants to young-people looking to start in business.
Full details of the scheme will be announced following the expressions of interest stage, which closes in two weeks, However the tender documents reveal that the scheme will consist of
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- An average loan of £2,500
- Loan period of 3-5 years
- Up to 12 months repayment holiday
- An Interest rate of the Retail Price Index (RPI) + 3%
- An initial distribution of just £9 million - £1 million less than the figure promised in the budget.
In addition to the grant the start-up entrepreneur will also receive access to training and business mentors.The pilot scheme will run from May 28 2012 until March 31 2013. Any young person between the ages of 18-24 with a viable business idea could be eligible.
Business and Enterprise Minister Mark Prisk said:
"We want to give young people the best possible chance to start and grow their own enterprise. This scheme is not just providing a small amount of funding, but is about looking at the bigger picture and we want to be able to offer a full package of business training and mentoring.
"We want providers to come forward and demonstrate how they will be best placed to deliver this exciting scheme. By encouraging more young people to get into business we will be able to boost their entrepreneurial spirit and help the future growth of the UK economy."
Stu Anderson, Project Director Shell LiveWIRE said:
"These loans offer the chance for many young people with little financial track record to access seed funding to get their ideas off the ground.
"There are thousands of young people with great ideas who find it hard to access funding because of this. This scheme not only offers a chance to finance an idea, but it also packages together support to ensure that they have the best possible chance of success in business."