• Swindon & Wiltshire Support
• Tuesday December 17 2024
• Author Name: Peter Davison

Smaller businesses backed by the Start Up Loans programme have higher survival rates finds independent evaluation

Smaller businesses backed by the government’s Start Up Loans programme have higher survival rates than other businesses, according to independent evaluation published this week.

The study found 64 per cent of businesses supported by the scheme made it to their fifth anniversary, compared with 43 per cent of comparator businesses.

The scheme was also found to have supported female founders – 41 per cent of loan recipients were female. Nationally, only 20 per cent of zero-employee businesses are women.

Recent female loan recipients include Monika Killer, who opened a witchcraft- and horror-themed bookshop in Bristol with a £25,000 Start Up Loan from SWIG Finance, and Hollie-Anne Bangham, who has been able to expand her Bristol-based music tuition business with a loan from from SWIG Finance.

The evaluation, conducted by SQW working in partnership with Professor Mark Hart, Qa Research and The Data City, also found that the programme was having a significant economic impact – for every £1 in economic costs of the programme, between £5.50 and £5.60 of additional Gross Value Added (GVA) is generated for the UK economy.

And the scheme is good for job creation, with one extra job, on average, being created for each loan awarded.

Since the programme started in 2012, Start Up Loans has provided more than £1.1 billion of start up financing to UK start up and early-stage businesses, across more than 118,000 separate loans.

The South West recently passed the milestone of £100 million being awarded in loans. A total of £100,504,021 has been loaned to 10,246 businesses.

In the South East, not including London, 132,454,374 has been awarded to 12,359 applicants.

Richard Bearman (pictured), co-chief banking officer at British Business Bank, said: “This evaluation is a very positive independent validation of the importance of Start Up Loans to financing and supporting UK start ups.

“The evaluation clearly shows the Start Up Loans programme helps support start up and early-stage businesses to survive longer, grow more and create jobs across the UK, mostly outside London and the South East.

“The programme also plays an important role in providing finance and support such as mentoring to those without family money to back them, or those from typically underrepresented groups.”

Professor Mark Hart, deputy director, Enterprise Research Centre, Warwick Business School said: “The Start-Up Loans programme is an important and long-standing feature of the business support landscape in the UK and this latest evaluation demonstrates that it continues to create significant value for those accessing the loans in terms of helping gain traction in their chosen markets.

“The late David (Lord) Young was the initial driving force behind this initiative in 2012 and these results show just how important his vision was in creating cohorts of more sustainable start-ups which are of crucial importance to the growth of the UK economy.”

Small Business Minister Gareth Thomas said: “That initial injection of cash is critical for any small business trying to get underway.

“When small firms get the chance to start up and grow, it can unleash a tidal wave of opportunity, providing jobs for local communities, boosting revenues and helping grow the economy.”

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