Government-backed Bank provides £150m to unemployed to start their own business
A brand-new guide to support and encourage unemployed people to set up a business has been launched by Start Up Loans, in collaboration with the Department for Work and Pensions (DWP) and HMRC.
The Fresh Start Guide is tailor-made to help people choose a new direction.
With guidance on everything from building confidence and researching ideas to finance options and information on how being self-employed could impact welfare benefits, the guide provides comprehensive support to unemployed people who might consider entrepreneurship as a career option.
Start Up Loans has a strong track record supporting the unemployed into business, having provided nearly £150m worth of financing (£148.4m).
The first-of-its kind guide will be distributed primarily via DWP’s network of over 600 jobcentres, and via 25,000 specialist work coaches who engage directly with claimants. The guide has been created to give those thinking about becoming self-employed a step-by-step guide to creating their own business.
The support will sit alongside existing support provided by jobcentres, including work coaches who support those looking to start their own business, the Start Up Loans programme, which provides up to £25,000 in funding, and the Business Support Helpline. Local growth hubs also offer advice and guidance to new and existing businesses.
The Rapid Response Service will also use the guide as part of their literature when working with big companies making large scale redundancies.
The British Business Bank’s Start Up Loans programme provides finance and post loan support to 11,000 start up and early-stage businesses a year. Start Up Loans has a strong track record supporting underserved small business owners. Since 2012, of those who received a Start Up Loan, 22% went to people who were previously unemployed, 40% went to women and 20% went to people from a Black, Asian or Other Ethnic Minority background (excluding White minorities).
Additionally, the guide will be shared with around 200 external organisations working with DWP to share with their networks.
Secretary of State for Work and Pensions, Pat McFadden said: “We are committed to supporting people across the country to unlock their potential and we are working hand in hand with industry to help people gain the skills, confidence and expertise they need to excel.
“Starting your own business can be a powerful way to take control of your future, particularly after a period of unemployment, and The Fresh Start Guide will help people to take that first step.
“By backing aspiring entrepreneurs, we are not only encouraging people to turn their ideas into reality and move into fulfilling work but also strengthening and diversifying our economy under our Plan for Change.”
Louise McCoy, managing director, Start Up Loans Products, British Business Bank commented: “The Fresh Start Guide is a great example of cross government working and is needed to support those who may not think of entrepreneurship as an option for them. We believe that by getting the Fresh Start Guide in front of people who are unemployed, it could help make a difference, improving not just individual lives, but the economy. We need more start ups in the UK to boost growth and create jobs all across the UK.”
Long-term unemployed case study
The Fresh Start Guide also features stories of previously unemployed people who have made the same journey. After a life-changing accident in 2017 ended Kristian Howell’s career in dairy farming, he was left reliant on a wheelchair and unsure of which direction to take.
“Farming obviously wasn’t something I could go back to after becoming a full-time wheelchair user,” he says. “With my disability, I have good days and bad days. But I don’t always know which it’s going to be until I wake up in the morning, which makes it hard to commit to a traditional job. Finding something that suited my needs and interests felt near impossible.”
After eight years of unemployment following a serious accident, Kristian was adamant he didn’t want to remain dependent on benefits indefinitely.
Kristian and his partner Beckie had a shared passion for gardening, sustainability, and mental wellbeing, which became the catalyst for launching Vine & Vibe – an inclusive, wellbeing-focused 6,000 sq ft indoor houseplant greenhouse and botanical-themed coffee space in Pembroke.
Turned away by traditional lenders due to low incomes, they secured a loan through the British Business Bank’s Start Up Loans programme, which helped them bring their vision to life.
Thirty-five-year-old Kristian says: “Getting back into work after being unemployed definitely came with its challenges, but starting our own business has honestly been life-changing.
“Having the flexibility to decide my own hours means I can work around my health, and it’s given me a real sense of purpose again. We wanted to build a better, more fulfilling life for ourselves and we’re doing that. Obviously running a business isn’t without its challenges, and we’re both still learning every day. But feeling like a valued part of society is a great feeling.
“I would tell anyone in a similar situation to seek support – you don’t have to do it all alone. We developed a great relationship with British Business Bank delivery manager Greg Tipper, who, among many other things, helped us create a realistic cash flow forecast, which we had never done before. It wasn’t our strong point, so having that support was great.”