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Businesses call for extended jobless entrepreneur funding. Pearson May News Update - Wednesday 23 May
Pearson May news blog
Businesses call for extended jobless entrepreneur funding
Small business groups are calling for the new enterprise allowance (NEA) scheme to be extended to encourage more jobless entrepreneurs to set up businesses.
Increased funding and easier entitlement to the scheme would, according to the All Party Parliamentary Small Business Group (APPSBG), allow a larger number of jobless entrepreneurs to kick start their business ideas, boosting the economy and cutting high unemployment.
NEA funding is available to Jobseekers Allowance (JSA) claimants aged 18 and over who are able to demonstrate a viable business plan with growth potential.
Claimants can currently apply for funding of £1,274 and access a guaranteed loan up to £1,000, providing they are claiming JSA for at least six months.
However, the APPSBG, which consists of 400 members from the House of Commons and Lords and various business groups including the Federation of Small Businesses (FSB), is now calling for earlier entitlement eligibility and increased funding to encourage greater use of the scheme.
It argues that current funding is too low to assist entrepreneurs in getting their ideas off the ground, with figures from the FSB indicating that the initial costs for small business start-ups can be nearly twice as much, between £2,500 and £5,000.
According to the group, the allowance should be made available from the first day of JSA claims and funding increased to £3,692 for the full year and up to £2,000 for the guaranteed loan - a total support package of £5,692.
National chairman of the FSB, John Walker, said: "Breaking down the barriers to entrepreneurship is crucial if we are to turn the economy around. We all know that unemployment is worryingly high. That is why it is even more important to make it more attractive to go it alone, and encourage those that have a great business idea to make it a reality."
"The current New Enterprise Allowance does not achieve this. But if the Government extends the scheme to make funds available and at higher rate, more budding entrepreneurs will be encouraged to become self-employed."
The comments follow a report published by the APPSBG that is calling for the Government to do more to encourage entrepreneurship in schools, create a single body to support small businesses, bolster alternative access to finance and aid older entrepreneurs.
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