Over-30s given loans help in bid to ‘fire up’ business

Lifting the age cap for Start-Up Loans is one of several reforms in a new report by David Cameron’s enterprise adviser Lord Young which the Prime Minister said would help “fire up business growth” in the UK.

Other proposals accepted by ministers include making it easier for small businesses to bid for £230bn a year of public sector contracts and a £30m voucher scheme to encourage firms to get expansion advice.

The age limit for the Dragons’ Den-style loans, which are only available in England and being delivered through charities such as The Prince’s Trust, was only raised from 24 to 30 earlier this year .

Those whose business plans are deemed “robust” typically receive £2,500 which can be repaid over five years at a relatively low rate of interest. Downing Street dismissed criticism of the scheme, insisting it had “exceeded expectations by 50 per cent in its first year” by making 3,768 loans worth around £16m.

Business groups broadly welcomed the package of measures, which will remove the need for bidders to complete complex pre-qualification questionnaires when bidding for public sector contracts worth under £200,000 and “simplify and standardise” procurement across the board.

Under the Growth Voucher programme, firms will be able to pay for outside expertise on issues including taking on new staff, marketing, financial management and online services – something fewer than half do despite evidence it generally aids growth, the report said.

Funding for the vouchers was announced in the Budget and private firms are being sought to operate the scheme. Lord Young’s report also heralds action to increase the role of business schools in encouraging start-ups and to ensure Government schemes are “properly resourced and targeted” at small firms.

Number 10 said it accepted the Government had failed to sufficiently publicise existing help and how to access it.

Former Conservative minister Lord Young said: “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. We need to raise the aspirations and confidence of these businesses and give them the tools to grow.”

Mr Cameron said: “Lord Young brings solutions to the table – his excellent report highlights the steps we can take to fire up business growth, helping to boost our competitiveness and ensuring the UK can get ahead in the fierce global race we are in.”

The first loans to over-30s are expected to be made this summer.

Hayley Conboy, CBI principal policy adviser for enterprise, said: “Supporting today’s smaller firms to grow and create jobs will make them the UK’s medium-sized businesses of tomorrow.

“We support the recommendation to open up more government contracts to smaller firms by cutting out the requirement for them to complete a pre-qualifying questionnaire, as most smaller firms don’t have the capacity to handle this.”

The proposals were also broadly welcomed by the Federation of Small Businesses but the body questioned some of the details. Head of policy Graeme Fisher said: “Such schemes need to be carefully managed so they do not simply add further complexity to what is already a confusing market place for business advice.”