Call for changes to the Government ‘Start up Loans’ scheme

Tina Boden and Tony Robinson OBE, both independent business owners, with 50 years combined experience are co-founders of the Enterprise Rockers movement which backs micro enterprise everywhere. They believe Government should take immediate action to prevent Start Up Loans becoming a financial burden for many, as Student Loans have become.

Tina Boden, co-founder of the Enterprise Rockers, established January 2012, explains why: “We engage with hundreds of thousands of micro business owners on an informal basis - as peers. We don't sell our peers anything - not even membership. Yet, every week we get approached by government providers wanting us to help them generate leads for schemes they're selling to start ups and micro business owners.

The most hard sell initiative of these schemes is ‘Start up Loans’. Government is paying a fortune in provider fees, advertising, marketing and administration costs to get high take up. It's fabulous news that Government are backing start ups but there are dangers in the way it's being sold. Start Up loans probably average £6,000 per loan which is at least 3 times more than most micro business owners start up with. Although we do want Government to continue supporting new businesses and believe low cost loans are important, we say 'No' to these Government partners and providers. We would like to say ‘Yes we'll promote the scheme for you’.”

“My prediction is that at least 1 in 5 new business owners will default on repayments and 2 in 5 will get into financial difficulties because of taking a Start Up Loan’ says Tony Robinson OBE, co-founder Enterprise Rockers. The survival rate of start ups with a Start Up Loan will be no higher than those that have started without a loan but have sought free start up advice from their local Enterprise Agency. The intent behind the scheme is great but the timing is rubbish. We all know that 99% of start-up business plans are fiction because it’s only when the business has live, paying customers that it can get its offer right and start to predict future income.

Advisers and mentors in the scheme, see it as their job to help the new business owners get going, with a loan, as that is how the provider gets paid. Some advisers may not even be in a good place to understand the chances of success because they haven’t started and run their own business.

The new business owner often hasn't a realistic view of how much they’ll earn. it is why test trading is so important and we say don't give up any of your other income sources until you've test traded. We also recommend ‘bootstrap don’t borrow’ until you really know what you’re doing and how to grow your business.”

Boden and Robinson say the solution is to not allow anyone a Start Up loan until they have been trading or test trading for a minimum of 6 months. “We’d prefer if this was 18 months test trading and trading but we realise Government are not going to change the name of the scheme and 18 months makes it a 'New Business Loan' rather than a 'Start Up Loan'.”

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Tony Robinson OBE is known as the Micro Business Champion. He is an authority on microenterprise and is a professional speaker, broadcaster and writer on this subject. He also writes poetry and fiction with his latest novel (November 2017) being 'Loose Cannon' and his most well-known work being the fictional satire 'Freedom from Bosses Forever' which also contains over 80 practical tips for micro business owners' success.

Tony is on a never-ending tour with his one man, one hour 'Let's Get Enterprising - Micro Myths and Magic Show' which suggests that for the majority of business owners there is a better way than the American Way to start up, survive and thrive. The show has been booked by organisers in London, Chesterfield, Newcastle, Yorkshire and Devon. Tony's aim is now to reach as many prospective and existing micro business owners with his show. As well as paid engagements with the show at business conferences and exhibitions he presents 2 UK shows a month, free of charge (expenses upfront) to Charities and genuine Social Enterprises.

Tony has also founded and directed a number of social enterprises to improve the quality of learning and support for new enterprise owners. The most well known of these is the SFEDI Group which includes the Institute of Enterprise and Entrepreneurs which he founded in 1996 and still co-owns. The most recent is Enterprise Rockers CIC which promotes the #MicroBizMatters global movement and the annual #MicroBizMatters Day. He co-founded this with Tina Boden in January 2012.

This independent, informal, free to join in, no contact details required, #MicroBizMatters Movement. @MicroBizMatters is part of Enterprise Rockers CIC and has one aim and five campaigns.

The aim is to make life better for micro (0-9 employees and up to £2million turnover) enterprise owners around the world and the campaigns are #PayIn30Days; Indie25ER; #NotAnSME; # CallOutTheBizBullies and #MicroBizMatters Day. The fifth, annual #MicroBizMatters Day is hosted by the City of Hull on January 11, 2019. The first three took place in London and the last was in Manchester. It is the only major day of recognition and action backed by all the national small business membership organisations in the UK.

Since launch, they have attracted many Friends of the Enterprise Rockers. These are networks of microenterprise owners within membership organisations and client/customer groups. Hundreds of thousands of self-employed and business owners have been helped by this informal, self-help movement.

#MicroBizMatters Day the biggest social media event for business owners and trends on twitter for over 7 hours. The day presents 8 learning hours and is truly a day of Recognition, Action and Learning.

Tony and Tina's famous friends have supported #MicroBizMatters Day throughout and they include Tim Campbell MBE, Sway (Mercury Award winner), Kanya King MBE, Penny Power OBE, Emma Jones MBE, Chris Percival, Charlie Mullins OBE. Michelle Dorrell, Laura Henry, Kate Hardcastle, Janice Gordon and Elaine Clark.

Tony and Tina have individual micro enterprises, both for longer than 20 years, and are well known in the UK for their work to support and promote start-ups and business ownership. Tony is and has been a Small and Micro Business Ambassador for a number of organisations, including Investors in People, and served on many Government Committees and Task Forces. He is currently an Ambassador for the Business Books Awards and a Judge for the NatWest Great British Entrepreneur Awards.

Tony received an OBE for services to small firms in 2001 and received two lifetime awards for enterprise in 2012 (from the IAB at the House of Commons) and 2013 (from Start Your Business Magazine). He founded the SFEDI Group in 1996 and remains a co-owner. He is co-founder and a Fellow of the Institute of Enterprise and Entrepreneurs. He is Patron of the John Cracknell Youth Enterprise Bank. He is a long-serving NED of Yorkshire in Business, the enterprise agency for the Yorkshire Coast Region, which provides low cost and free enterprise support and has 5 buildings of workspace for prospective and existing micro business owners.