In the last six years, 105,500 unemployed Britons have been given the resources needed to bring their business idea to life, as the government announces a latest milestone for the New Enterprise Allowance (NEA).
Launched in 2011, the state-funded initiative provides startup funding and support for people claiming Jobseeker’s Allowance (JSA) or Employment and Support Allowance (ESA).
Under the scheme, successful applicants receive a weekly allowance of £65 over 13 weeks, then £33 for the next 13 weeks (totalling £1,274) to help with startup costs. Founders can then apply for a loan of up to £25,000 to help sustain their business.
Aside from financial support, expert advice is also on offer. A business mentor is assigned to each applicant to help develop their business plan.
In March 2017, it was announced the NEA had created 100,000 startups, meaning a further 5,000 were created in the following three months.
Commenting on the success of the NEA so far, government employment minister Damian Hinds said the scheme had proved a successful launch pad for ambitious jobseekers.
“As these latest figures show, thousands of people across the country have great business ideas, and are taking the steps to turn them into a reality,” he said in a statement.
“The NEA provides the right mix of expert, tailored advice and support to people of all backgrounds which can be invaluable in the early days of starting a company.”
In terms of uptake, the North West of England has so far benefitted most from the NEA. Over 16,000 new businesses were founded in the region through the fund, with London following on 12,870.
Entrepreneurial jobseekers in the East Midlands and Wales were the fewest in number, each area winning just over 6,000 applications.
Looking into the demographics of those starting up, the New Enterprise Allowance has created a diverse stream of new founders.
Almost a quarter of recipients were aged over 50, while seven per cent were aged between 18 and 24. Meanwhile, 22 per cent had a self-declared disability, the same number as in 2016.
Provision for ethnic and minority backgrounds had slipped by one per cent since a previous milestone was hit in June 2016.
One new founder brought through the scheme was Colin Young, whose Sunderland-based drone photography business was funded after redundancy from a previous job.
Young commented: “After working as a TV and photography technician for 13 years, I decided to invest in myself with the New Enterprise Allowance.
“I met with an adviser who not only helped me with my business plan, but also to plan for any pitfalls that I might not have considered.”
Survival rates for NEA-funded startups have proved to match the national average for new companies. Some nine in ten businesses were still trading 12 months on from launch.
Read our essential guide to all the terminology you’ll need to get to grips with in the first few months of turning a great idea into business reality
Sign up to our newsletter to get the latest from Business Advice.