Start-up grants may be offered alongside student loans
Prime minister shows support for young entrepreneurs
David Cameron is considering introducing start-up loans for young entrepreneurs, which would be offered on similar terms to the loans which fund students through university.
That is according to The Press Association, which reports that the prime minister told a small business audience in Maidenhead that the concept is “brilliant”.
The idea began with a recommendation by Sir Richard Branson in November’s Control Shift report. The document presented a list of proposals on how the government could foster young entrepreneurship in the UK, drawing on research from the Virgin Media Pioneers campaign, which seeks to empower Britain’s young innovators.
Under the current system, the government offers students who continue into higher education up to £9,000 a year to cover their tuition fees and a further £7,675 for maintenance. The loans are treated to preferential interest rates, far below those offered commercially.
However, there is no such funding available for young people who choose entrepreneurship over university. Young entrepreneur Zoe Jackson was quick to remind Cameron of this at the event, saying:
“The government invests in young people that want to go to university, but not those who have valid business ideas as well.”
The Virgin Media Pioneer, who founded her performing arts company Living the Dream when she was 16, was reported by The Press Association as having asked the prime minister:
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“Why not set up a youth investment fund – at the same rates as student loans – available to support young people and nurture their potential?”
Cameron replied that he is looking closely at the idea, answering:
“There’s a very good idea in there that Richard Branson has come up with… We are providing loans for students to go to university, why not look at something similar for people who have got a great business idea and want to get on and start that business?”
He added: “We might be announcing something like this later on.”
Matt Clifford, CEO of Entrepreneur First, said the move would go a long way to making entrepreneurship accessible and attractive to young people:
“That’s the perfect kind of loan for an entrepreneur: enough to cover basic living costs before you’re ready to take investment; not a handout that might provide the wrong incentives; but equally not a debt that’s going to cripple you financially if your start-up doesn’t work out.
“Let’s hope this ‘brilliant idea’ becomes reality before too long.”