FSB supports call to extend enterprise allowance
THE local Federation of Small Businesses (FSB) is supporting the recent call by the All Party Parliamentary Small Business Group (APPSBG) to extend the New Enterprise Allowance (NEA) to encourage more budding entrepreneurs to use the scheme.
Current rules allow jobless entrepreneurs to apply for funding of £1,274, plus access to a guaranteed loan of up to £1,000 – but only after they have been claiming Jobseekers Allowance (JSA) for six months.
Now the APPSBG is calling for the NEA to be made available from day one of signing on to JSA and for funds to be available for a full year to provide £3,692, plus the guarantee of a loan of up to £2,000.
It is concerned that the current funding is too low to enable budding entrepreneurs to get viable business ideas off the ground – a view supported by figures from the FSB, which show it costs 14 per cent of small businesses between £2,500 and £5,000 to set up.
Amir Butt, Peterborough branch vice-chairman FSB, said: “As this report shows, breaking down the barriers to entrepreneurship is crucial if we are to turn the economy around.
“We all know that unemployment is worryingly high. That is why it is even more important to make it more attractive to go it alone,.
“The current New Enterprise Allowance does not achieve this. But if the Government extends the scheme to make funds available and at higher rate, more budding entrepreneurs will be encouraged to become self-employed.”