The first loans made through the £82.5m StartUp Loans programme will be announced on Wednesday by Business Secretary Vince Cable, along with details of the “delivery partners” who have been given the responsibility for distributing the money, reports The Telegraph.
While most of the distributors will offer loans of around £2,500, from next Friday, a student entrepreneurship body will be providing loans of £5,000 and £10,000. NACUE, which is publicly funded, will manage applications in partnership with finance firm GLE Group.
Any person aged between 18 and 24 is eligible to apply for the “student-style” loans, which are charged at 6pc APR and are available on three-year terms.
Simon Stephens, of NACUE, said: “It’s a rigorous application process designed to make sure loans go to the right people. It’s not going to do anyone any good if loans aren’t going to viable businesses.”
He expects applications will take between four and eight weeks to be processed before a decision is made. Applications can range from an idea to a “full business plan with projections for the next three years”. Those with viable ideas but little knowledge of how to structure a business plan will then be offered guidance from expert mentors.
The process culminates with a pitch to a panel who will decide on whether loans will be granted. Those who are turned down will be pointed towards “other services that can help, from business planning advice to incubators [subsidised offices for start-ups]”.
Richard Branson’s charity, Virgin Unite, is also leading a consortium to administer the loans, while other delivery partners include the Prince’s Trust and a range of regional finance providers.
Successful applicants will be offered other free services, such as access to Regus’s network of serviced offices and IT services provided by ANS Group.
