"Financing projects from £50,000 to £100 million"

Scheme for entrepreneurs under fire for aggressive marketing

Scheme for entrepreneurs under fire for aggressive marketing

A government scheme to support young entrepreneurs has come under fire after its distributors were accused of pushing it too aggressively to students.

Enterprise Educators UK, which represents academics across the majority of UK universities, has raised numerous concerns about the irresponsible actions of the scheme’s “delivery partners”.

The body has complained to the Start-Up Loans Company, which is fronted by former Dragons’ Den tycoon James Caan, that the distributors have promoted commercial loan finance too aggressively.

The chairman of Enterprise Educators UK, Dave Jarman, complained that the distributors, supported by student ambassadors hired to drum up interest, had not only misled aspiring entrepreneurs in their promotional activity, but had also secured loan deals with students that it would never have endorsed.

He suggested that the deliverers failed to identify other sources of support that could have provided further advice or second opinions on the advice they were given.

The chief executive of Start-Up Loans, Tim Sawyer, met with Mr Jarvis ahead of a planned extension to the scheme. This has led to some concessions regarding the conduct of the delivery partners, though Mr Sawyer was keen to point out that the scheme has “over-delivered” and has proven a “significant success”.

The scheme has already received £15 million after the Commons approved an additional £5 million in March to support new business leaders (read more).

But the government has allocated almost eight times this amount up to the end of the current Coalition term in 2015, which goes some way towards explaining the aggressive push to offload funds.

The scheme is also set to be expanded to include older entrepreneurs within its remit.

Tuesday, 14 May 2013 11:27
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