The Government's Start Up Loan Scheme provides loans of around £2,500 and business advice to young entrepreneurs. Since the scheme was launched last autumn, just 460 businesses have been funded, following applications from 3,000 people. The Government says 2,500 loans will have been issued by March 2013.
The Prime Minister recently announced that funding for the scheme is being boosted by £30m to £110m over the next three years, as a response to strong demand and the age limit for applicants has also been raised from 24 to 30. Mr Cameron said:
"Start-up loans are a great way to help this next generation of entrepreneurs get the financial help - and the confidence - to turn that spark of an idea into a growing, thriving business."
Critics, however, have suggested that the extensions to the scheme are an effort to kick-start the initiative following a slow start. The criticism is part of a heated exchange across the political divide as to the success of this and other Government initiatives to stimulate growth in the economy.
An Opposition spokesperson warned that the initiative hasn't had the impact the Government promised, in that by the end of October 2012, only 46 loans had been made from the £82.5m programme pot. Further criticism levelled at the Government scheme is that this encouragement of young entrepreneurs fails to address the much wider issue of the shortage of good jobs.
Similarly, the Government's £200m Growth Accelerator Scheme, which provides management training for mid-sized businesses, with a target to help 26,000 companies, has also been drawn into the firing line. A recent answer to a parliamentary question revealed that only just over 700 companies have used it, while 339 were turned away as "not suitable", while more than 1,500 are "being assessed".
Countering the criticisms, Michael Fallon, the Business Minister, stated that both schemes were "very new", saying that:
"They are on track to deliver support to the businesses with the most potential to create jobs in their local communities and any suggestion to the contrary is incredibly premature. Loans to 18-24 year olds to start their own business only started to go out in September, and so far 64 have been granted, but we expect to deliver 2,500 loans by March. 1,500 firms are now on Growth Accelerator and 4,800 have applied - the programme is expected to create 55,000 high value jobs over the next three years."
The true picture about the success of these economy 'start-up and acceleration' initiatives, is debatable. Nevertheless, they are out there in the business development arena and worth a look at by would-be participants, if only to find out what the demands of the application and qualifying processes are!