14,000 Entrepreneurs Are In Debt Because Of StartUp Loans
Since 2012 Startup Loans UK have given out 45,618 loans to aspiring entrepreneurs dreaming of creating the next big thing *(As of February 2017). On average 30.2% of entrepreneurs will default on their loan repayments. In other words, roughly 14,000 aspiring entrepreneurs are now in debt.
Founded in 2012 by Lord Young, and backed by David Cameron’s Conservative government, Startup Loans U.K. provide small business loans to business owners up to £25,000.
According to Startup Loans, seven out of ten recipients of the Startup Loan wouldn’t have received a loan from elsewhere. Meaning simply that banks don’t feel comfortable giving loans to these aspiring entrepreneurs, but the government does.
The status quo tells us that to start a business you need funding; ‘it takes money to make money’. This is what schools, colleges and universities teach us. However, since 2011 a business school called Pop Up Business School has been travelling across the United Kingdom teaching people the opposite. This is namely that you actually don’t need funding to start a business and that anyone can start a business and begin making money doing what they love.
Pop Up Business School believes that entrepreneurs should begin by selling their value before they create it. This means that instead of taking on debt to turn your idea into a reality, you should get people to pay for it upfront.
Despite their unconventional approach, the results of Pop Up Business School speak for themselves and their methods clearly do work. At a recent event in Reading, 34% of students started a business during the two week course and 38% of the students made a sale during the two weeks.
At a recent Pop Up Business School event, they found 50% of students believed a lack of cash stopped them from starting their own business. Other factors included a lack of confidence and knowledge.
The Pop Up Business School doesn’t get everyone to start a business. There are plenty of people who attend and do not start businesses. However, Pop Up Business School would rather they realised business is not for them instead of getting them into debt. Whilst its primary mission is to help people start businesses, 98% of participants experience a significant boost to their confidence in attending the course. Many of those
attending come from lower income backgrounds as the PopUp Business School does a lot of work with those on unemployment benefits, ex-offenders and single parents.
Co-founder, Alan Donegan said “The government shouldn’t be giving loans to people to start up businesses, especially to people on the New Enterprise Allowance Scheme who are starting out from scratch. They should not be putting people into debt at the most vulnerable point in their business, especially with a 30% default rate and a far higher
failure rate!”
Co-founder, Simon Paine said “Startup Loans kill more businesses ideas than they start. They are unnecessary, they increase the risks and stop thousands of people from getting started. They are like a cancer to the entrepreneurial spirit in the U.K.”
Jourdan Lamomtagne, Entrepreneur, who took a Startup Loan in 2012, said “I took a loan to fund my business as I couldn’t get investment. However, because my business didn’t make any money I now have to repay my loan along with my university debt, which isn’t ideal”
Carly Ward, Entrepreneur, who took a Startup Loan said “I took a Start Up Loan of £20k to help me with my business. It really helped with cashflow at the time but has caused longer term cashflow issues. I think it's a good scheme for people starting up but many people may not think of the cashflow issues it could cause later down the line”
Risi Chowdhury, Founder of IncuBus took a Startup Loan “"I received a startup loan to buy a double decker bus when starting IncuBus Ventures, whilst we were raising our crowdfunding round via Seedrs. It suited our needs at the time which was a short term loan we knew we could pay back from the crowdfunding money before interest charges kicked in. We were supposed to receive mentoring but were not impressed by the level of mentors available."
Muhammad El Dharrat, Entrepreneur, was promised a Startup Loan “I was promised a loan but they rejected my application three times. They pretended everything was rosy and I’d get one, they just gave me the run around and I felt like I was there to tick some boxes for them.”
About PopUp Business School
Frustrated by the traditional approach to starting up, co-founders Alan Donegan and Simon Paine, decided to challenge the system when they set up five years ago. Forget suits, ties and briefcases. PopUp Business School is all about offering BIG opportunities to every member of society, from lone parents to the unemployed, people with disability and ex-offenders, NEETs and other disadvantaged members of the community.
PopUp Business School is the polar opposite of tried and tested approaches to enterprise support. Rather than preach the importance of business plans, company structures and loan funding, Donegan and Paine turn this model on its head to achieve far greater results. Using a combination of the latest online business models and a rapid approach to sales, PopUp Business School is fast, smart and seriously hard hitting and their results speak for themselves.
About Start Up Loans
A subsidiary of the British Business Bank and deliver the Government’s Start Up Loans programme providing finance and support for businesses who struggle to access other forms of finance.
Notes to editors:
Images can be found here
The PopUp Business School was founded in 2011 to give business and enterprise skills to people that need it the most
Seven out of ten recipients of the Startup Loan wouldn’t have received a loan from elsewhere. Meaning banks don’t believe in these businesses.
The PopUp Business School focuses on harder-to-start people (e.g. low income, unemployed, people with a disability, single parents, ex-offenders)
98% of participants experience a significant boost in their confidence, business skills and ability to make things happen.
50% of students believed a lack of cash stopped them from starting their own business.
Facebook: https://www.facebook.com/PopUpBusinessSchool?ref=hl
Website: www.popupbusinessschool.co.uk