A SCHEME set up to help young entrepreneurs overcome problems accessing start-up finance is being expanded.
The Government is putting an additional £30m into the Start-Up Loans scheme, which will now provide more than £110m over the next three years to finance new small firms.
Prime Minister David Cameron also extended the age limit for applicants from 24 to 30 years old.
In the three months since the project started, more than 3,000 young people have registered an interest. Once approved, they can expect to receive a low-interest loan, averaging £2,500, to be repaid over five years.
The Start-Up Loans company, chaired by TV Dragon James Caan, has so far approved more than £1.5m in loans for more than 460 new businesses.
However, only 3% of the money has reached the North East, putting the region, along with the East of England, at the bottom of the league for receiving Start-Up cash from the scheme.
In contrast, Greater London received 34%, 19% went to the South East and 14% to the West Midlands.
Ted Salmon, regional chairman of the Federation of Small Businesses, said: “This underlines the need to rebalance the economy.
“This has not gone very far to do that. I have no issue with the Midlands, they are in a similar situation to us, but I can’t see any more justification for putting more money into London and the South East, especially after all the money they have had from the Olympics. There is clearly a need to distribute it a bit more fairly.”
North East Chamber of Commerce (NECC) director of policy Ross Smith said: “Anything that helps fledgling businesses establish themselves must be welcomed, but the tiny percentage of take-up in the North East is proof that more must be done to promote and raise awareness of available financial initiatives.
“Our own research in 2012 demonstrated that more than half of businesses are not aware of important finance schemes so how are they expected them to utilise them?
“The Government has introduced initiative after initiative, but these will have little impact if nothing is bring done to publicise them in the region.
“Serious effort must be put into making sure professional advisers are given good detailed information about what is currently on offer to businesses and this is then passed on to businesses.”
Organisers of the initiative, which also includes access to a business mentor, are confident that around 100 new businesses a week will reach the approval stage this month.
Mr Cameron said: “Start-Up loans are an important part of my mission to back aspiration, and all those young people who want to work hard and get on in life, so this country competes and thrives in the global race.”