How to apply for £25,000 loan to start a business if on benefits or Universal Credit

The Sun Finance 3 weeks ago

MORE than 200 businesses EACH WEEK have been launched in the past two years by former benefit claimants including those on Universal Credit, new figures show.

The budding entrepreneurs are making use of the New Enterprise Allowance (NEA) scheme from the Department for Work and Pensions which offers loans of up to £25,000, support and advice. So are you eligible – and how can you apply?

Reuben is a young entrepreneur who has used the scheme and is now publishing music on Spotify

NEA is available to people claiming certain benefits, such as Job Seekers Allowance or Universal Credit.

The scheme aims to help unemployed people become their own boss as a route off of benefits.

It offers claimants who qualify a personal business mentor, a weekly living allowance for six months and, potentially, a start-up loan of £25,000 for their business idea.

Anyone who receives an out of work benefit and expresses an interest in self-employment can talk to their work coach about their interest in the scheme.

The coach can make recommendations and give advice on next steps. Applicant should be aware that the failure rate for start ups can be high and a good business plan is needed.

A total of 209,000 benefit claimants have been supported since the scheme was launched in 2011, with over 130,000 businesses set up as a result – nearly 20,000 in the last two years alone.

Employment minister Mims Davies said: “Starting a business is an exciting, challenging and potentially life-changing experience.

“The New Enterprise Allowance scheme is supporting people who want to make that journey regardless of their background or any disability they might have. Work Coaches stand ready to provide advice and support, across our network of over 600 Jobcentres – helping every claimant achieve their potential.”

The minister added: “Today’s figures show the UK’s entrepreneurial spirit is alive and well, and we are backing it.”

The scheme has provided a platform for budding entrepreneurs from ethnic minority groups. Of all businesses started since 2011, almost 14 per cent were launched by a person from a BAME background.

Young entrepreneur, Reuben Buffong, 25, from Birmingham, now runs his own video and music production company.

Having trained as a musician, he found himself out of work and approached his local Jobcentre.

His Work Coach there talked to him about his ambitions to be his own boss and he received funding and mentoring support through the New Enterprise Allowance.

He then founded Buffong Media in May 2018 and was nominated for Young Entrepreneur of the Year at the 2019 AAA Awards. He has recently been able to release his music on Spotify.

Reuben said: “I was unemployed and then I came into the job centre and I told them about what I wanted to do, being self-employed, and then Jane my Work Coach recommended the NEA scheme. The Jobcentre isn’t a place to be scared of. They will say to you ‘we will provide you with money and support, if we think your business plan is good enough to work.’ ”

“It gives you a platform to do things that you otherwise wouldn’t be able to do. There’s help there for you, if you need it and if you want it. If you are willing to work hard the NEA scheme will work hard for you.”

A think tank says young single parents on Universal Credit are missing out on up to £100 a year because of their age

Read about Universal Credit and Brexit.

In other business news:

COOKED: The buyer of Thomas Cook’s shops paid just over £6 million for 555 stores – or just over £10,800 per shop. The Insolvency Service’s Dean Beale, the official receiver of Thomas Cook, told MPs that the bid from Hays Travel had been the “best deal on the table” but admitted it was “not a lot of money”.

BANK SPANK: Metro Bank founder and chairman Vernon Hill has stepped down with immediate effect following a difficult year for the troubled lender. The move came just hours before the group’s third-quarter trading update. Metro Bank has been under pressure after it revealed a £900 million accounting blunder in January.

LASHING OUT: Mike Ashley’s Sports Direct has lashed out at Goals Soccer Centres, accusing its management of wiping out shareholders through “skulduggery”.  The tycoon’s firm hit out at the five-a-side-football pitch operator, two days after confirming he would not be buying the business despite his initial interest.

PUB DEAL: Pub group Fuller, Smith & Turner has agreed a £40 million deal to buy Cotswold Inns & Hotels. Cotswold Inns & Hotels, which was founded in 1997 by Michael and Pamela Horton, consists of seven freehold country inns, eight freehold cottages and two leasehold bars in Birmingham.

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