Over a fifth of funding from the government’s Start Up Loans scheme has been provided to unemployed people, new figures reveal.
Since it launched in 2012, the initiative, run by the British Business Bank, has provided over £1 billion to more than 105,000 businesses.
Of that, £148.4m, or 22% of the funding, has been given to unemployed people to start or grow their own business.
The figures have been released to coincide with the launch of a new start-up business guide which will be distributed to over 600 jobcentres and 25,000 specialist work coaches.
Work and pensions secretary Pat McFadden said:
“We are committed to supporting people across the country to unlock their potential and we are working hand in hand with industry to help people gain the skills, confidence and expertise they need to excel.
“Starting your own business can be a powerful way to take control of your future, particularly after a period of unemployment, and The Fresh Start Guide will help people to take that first step.
“By backing aspiring entrepreneurs, we are not only encouraging people to turn their ideas into reality and move into fulfilling work but also strengthening and diversifying our economy.”
One example of a loan recipient is Kristian Howell, who was unemployed for eight years following a life-changing accident which meant he could no longer work in farming.
After struggling to secure a loan due to low-income, he received a Start Up Loan to open indoor greenhouse houseplant and coffee shop, Vine & Vibe, with his partner Beckie.
Kristian said: “Getting back into work after being unemployed definitely came with its challenges, but starting our own business has honestly been life-changing.
“Having the flexibility to decide my own hours means I can work around my health, and it’s given me a real sense of purpose again. We wanted to build a better, more fulfilling life for ourselves and we’re doing that. Obviously running a business isn’t without its challenges, and we’re both still learning every day. But feeling like a valued part of society is a great feeling.
“I would tell anyone in a similar situation to seek support – you don’t have to do it all alone.”
According to IPSE, solo self-employed people contributed £366 billion to the UK economy in 2024, compared to £331bn in 2023. This amounts to approximately £87,142 each.