Chancellor pledges extension of Startup Loan Scheme in Autumn Statement.
George Osborne vowed to grant loans to 50,000 more startups as the Chancellor made his Autumn Statement at the House of Commons today.
The mid-year announcement on the government’s Budget progress contained a number of key measures which will affect entrepreneurs, including the pledged extension of the Start Up Loans scheme.
Around 10,000 early stage companies have already benefitted from the scheme, but today the Chancellor told Parliament that five times that number would benefit from loans of around £2,500 to get business ideas off the ground.
Tim Summers, a partner at Temple Bright, a legal firm specialising in tech that works with start-ups, said: "Access to finance is one of the most difficult hurdles to overcome in the early stages. Today’s announcement of an expansion to the Startup Loans scheme … will be a crucial lifeline for entrepreneurs short on cash."
Other measures include £250m in unspent Business Finance Partnership funding being channelled into the British Business Bank for investment in late stage VC funds.
It is hoped the cash influx will lead to greater investment in high growth startups, but Richard Britton, CEO of CloudSense, a cloud computing consultancy, called it a "drop in the ocean".
He added: "Overall it still seems a little half-hearted. There are no measures within it in my view that will really add to the economy and accelerate further business growth."
Britton called on the government to recognise the need for investment in superfast broadband rather than projects like HS2.
"As a nation we need to be focusing more on how we can utilise technology to leapfrog international competitors," he claimed.
The government also confirmed that it would cap business rates to 2%, as well as giving firms with properties valued at £50,000 or less a £1,000 discount on existing rates.
The small business rate relief programme is to be extended beyond 2014 to April 2015, while the Chancellor also announced the introduction of a Patent Box, which cuts corporation tax by 10% on profits from patents.
NI contributions for people aged under 21 were scrapped as the government tries to get more young people into work, with the move to affect 1.5 million jobs.