A UK Government-backed business bank has lent about £60 million to thousands of people who have been unemployed or out of work over the past decade, new data shows.
People who have faced redundancy, retirees and students are among those to have been offered a loan to start a business.
The British Business Bank (BBB) unveiled the lending data from its Start Up Loans programme.
Just because someone is not in employment doesn’t mean they should miss out on the opportunity to become an entrepreneur
More than £44 million has been lent to nearly 5,000 people who were unemployed when they applied since the programme began in 2012.
A further £16 million has gone to those who were economically inactive – such as students, stay-at-home parents or retirees – meaning they were out of work and not looking for a job.
The Start Up Loans scheme, which has a 6% yearly interest rate fixed to its loans, gets its funding from the Government’s Department for Business and Trade, and therefore is backed by UK taxpayers.
It says it targets under-represented groups who are excluded from mainstream finance to help them start businesses by offering unsecured personal loans.
Start Up Loans managing director Richard Bearman said the bank has a “higher risk appetite” for lending to people who are out of work than typical high street lenders.
“Someone unemployed with healthy savings and no mortgage or rent obligations is more likely to get any kind of loan for starting a business than a recent bankrupt,” he told the PA news agency.
“It’s nuanced. It is about balancing risks and ensuring affordability.”
Many economically inactive individuals have a wealth of industry experience that’s valuable for starting or growing a business, particularly those who are re-entering the workforce after retirement, or after a period of illness.
The Government announced a “Get Britain Working” package ahead of the autumn Budget, with £240 million allocated to local services with the aim of getting people back into work.
Labour has also previously promised reforms to help the “lockdown generation” get back into employment, with plans to support those who can work with greater opportunities.
Mr Bearman said: “Many economically inactive individuals have a wealth of industry experience that’s valuable for starting or growing a business, particularly those who are re-entering the workforce after retirement, or after a period of illness.
“Just because someone is not in employment doesn’t mean they should miss out on the opportunity to become an entrepreneur.”
