Government Start Up Loans attributed to rapid rise in new companies
The number of new businesses registered at Companies House grew significantly during the final six months of 2020, the latest statistics have revealed.
The quarterly reports, found here, suggest that British entrepreneurship has continued to thrive despite economic uncertainty.
According to the figures, the number of new companies incorporated in the third quarter (July, August, September) of 2020 increased by 51,269, or 30 per cent, compared with the same period last year.
Meanwhile, the number of incorporations in the fourth quarter (October, November, December) of 2020 increased by 45,870, or 29.4 per cent, compared to the same period a year before.
Separate research also revealed that more than 83,000 e-commerce websites were launched in the UK in 2020.
Richard Bearman, of the British Business Bank, the government-owned economic development bank, attributes the rapid rise in companies to the availability of start-up finance, such as Start Up Loans.
The Government-backed scheme provides unsecured personal loans of £500 to £25,000 to start or grow a business, alongside free support, guidance, and 12 months of mentoring.
Commenting on the initiative, Mr Bearman said: “Starting a business is high risk, but among the applicants who get loans from us, the business failure rate is far below the national average.”
He added that most Start up Loans are offered to entrepreneurs from a minority or disadvantaged background, supporting anyone who wants to start a business to do so.
“Getting money into less advantaged areas of the economy drives employment and wealth creation. Entrepreneurs have the ability to change existing social imbalances,” he said.
Mike Cherry, national chair for the Federation of Small Businesses (FSB), also notes that entrepreneurs have been successful using alternative finance providers, such as crowdfunding platforms and peer-to-peer lenders, as well as research grants, such as the government’s Sustainable Innovation Fund.
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This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at time of publishing 4 March 2021.