According to Lord Young, the Prime Minister’s enterprise adviser, expanding the government’s Start-Up loan scheme and opening up a further £230 billion worth of public sector contracts to the smallest businesses will help boost growth and transform the economy.

In his second report to the Prime Minister, Lord Young highlights the increasing importance that micro businesses – those that have less than 10 employees – have on the success of the economy. Micro businesses make up 95% of all businesses in the UK and Young identifies steps the government can take to help them develop their confidence and capability to grow, helping the UK to get ahead in the global race.

He recommends removing the age cap – currently set at 30 years old – for the government’s Start-Up loan scheme, so that all entrepreneurs that would otherwise struggle to secure the necessary finance and support can benefit.

The Start-Up loan scheme helps get business ideas off the ground with a loan of typically around £4,500 and mentoring support. It has exceeded expectations by 50% in its first year, with 3,768 loans worth around £16m now issued since its launch in the autumn. Many of these new businesses are now taking on their own employees.

Lord Young said, “We have one of the best environments in the world for the creation of new firms. What this report endeavours to do is to help and encourage all those new firms to now take on their first employees and grow. Growing our smallest businesses would transform our economy – they are the vital 95%. If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero. We need to raise the aspirations and confidence of these businesses and give them the tools to grow.”

Former Dragon, James Caan, Chairman of Start-Up Loans and serial entrepreneur said, “I very much welcome the recommendations from Lord Young’s report to make Start-Up Loans available for everyone in this country. His vision to get Britain’s economy back on track through supporting SMEs and start-ups is something I passionately believe in and wholeheartedly support. The success of Start-Up Loans to date - an initiative that Lord Young has championed in government - demonstrates the country’s need for such ambitious thinking.”

Photo: Helping to get small businesses off the ground will boost the economy, claims Lord Young.