The government has ring-fenced cash for investment in start-ups, as a means of injecting capital into the UK economy, since 2012. Originally these £2,500 loans were available only to 18-24-year-olds, but this has since been expanded. Now anyone 18 or over is eligible.
Following Theresa May’s formation of a minority government, small businesses and start-ups can now apply for a government loan of between £500 and £25,000 through the Start Up Loans website.
At the time of writing, 46,508 businesses have successfully applied and received a loan through this programme, £301,363,687 has been spent on loans, and the average loan size is £6,480. Overall, Start Up Loans has seen much success as a governmental vehicle for providing funding for start-ups and small businesses. In order to apply for a government start-up loan, you must have a UK-based business that has not been fully trading for more than 24-months.
Lending only to businesses that operate within the UK means that the return on investment is kept within the country, which is important in a time when fears about foreign investment are rife. Analysts are particularly concerned about swathes of London property development sites being bought up by international speculators. Thus, Start Up Loans is thought to benefit the economy.
The loans are offered at a fixed interest rate of 6% and must be repaid within one to five years. When applying for a Start Up Loan, you will be paired with a delivery partner who will help you prepare your business plan and cash flow forecast ahead of you receiving your government-backed loan.
Furthermore, the Tories have also pledged to reduce corporation tax to 17% by 2020, and increase the personal income tax allowance to £12,500.
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