THIS week a Government-backed loan scheme to help young entrepreneurs was extended to the over-30s, which is great news for the vast majority since the average age for starting a business is around 40.
The age restriction for the low rate five-year loans, which are awarded through charities such as The Prince’s Trust, was raised from 24 to 30 earlier this year due to lack of take-up. And while bright young things should be applauded for going it alone, there’s a good reason why only 5% of young people are self-employed.
For most, the capability and confidence required to start a business comes with experience so those in their late thirties and early forties are most likely to take the leap.
There should be more support for the over thirties – not less – as they’re the ones who will help get the economy growing. When I started my business at 37, Business Link couldn’t have been more supportive. However I had to find £6,000 to pay for my website and marketing before claiming 50% of the money back. I was lucky that my parents were willing to risk their savings to lend me the money, but not everyone is so fortunate.
Because of the early success of my business model, I was able to start franchising in year one. And while most of my franchisees have self-funded their business, those who needed funding haven’t always found it easy. Feedback from franchisees suggests that grants are only available to brand new business start-ups. But why the distinction?
The franchisor is there for support and mentoring – but not to provide the funding. My franchisees are now employing people and boosting the economy, so why should they be treated differently to any other start-up?
The process of securing a business loan can also be a long, daunting and onerous task. One of my franchisees was made to jump through so many hoops, she ended up getting a personal loan at a higher interest rate in order to get the business up and running straight away. But there’s always the option of a business angel if you’re prepared to give up an equity stake, especially if they have core skills you are lacking.
The good news is that we’re lucky in the North East to have some wonderful support organisations who can signpost you in the right direction for funding.
I would urge anyone to tap into the excellent business schools at Durham and Newcastle Universities, the Entrepreneurs Forum and the North East Chamber of Commerce.
Your local council’s business and enterprise team is also a good place to start or visit www.nea2fguide.co.uk/funding-options
:: Sarah Pittendrigh is managing director of www.simplybowsandchaircovers.co.uk Ask a question via Twitter: @simplybows