So today I have a meeting with the Welsh new enterprise allowance scheme. This is one of those government funded things to help people start up a small business.
Obviously starting up a small business does require a cash injection and so the new enterprise allowance will let you up to £2500 at a seemingly low interest rate. Reading up on the interest rate it seems to be anywhere from 6% to 10% but researching this closer I haven’t found anyone who didn’t get the loan at anything other than 10%.
The only advantage with the new enterprise allowance funding scheme is that for the first year you are only paying the interest of the loan amounts however there is a catch. You don’t get all the money upfront instead in increments of up to £500.
So far this all sounds very good way to get a loan if you are unemployed, wanting to start a small business and potentially don’t have the best credit rating in the world which will be affected by being unemployed.
But let me tell you about the reality of the system.
These are supposed to be business savvy people who have an understanding of what it takes to get a business up and running and to keep things going smoothly. They are supposed to give you the benefit of their worldly experience.
The reality is very, very different. It’s obvious that these people are on a commission. Once you have the lying, which is supplied by a third party company, it’s incredibly likely you will ever hear from them again.
It only took a moment of searching to hear the same story over and over again that when they have you signed up you are left on your own. Granted you have a business plan by this point there is no substitute for real world experience.
Just to come back to the loan subject for a moment you could go directly onto the loan company which the new enterprise allowance uses but there is one stumbling block in the fact you need to be referred by a mentor.
The rush to sign you off.
Once your loan is “approved” then there is a major push by the new enterprise allowance and the job centre to make sure you sign off. This is before everything has been finalised and you have received any money whatsoever.
Your business plan is not the same as jobseeking.
Whilst setting up your business plan you do you have to be careful and still continue to look for work and this is where the job centre has caught a lot of people out.
It says in your job seekers agreement form that if the job centre suspect you have not done everything you possibly can to find a job they will stop your benefit dead. Once that decision has been made there is nothing you can do about it apart from go through a lengthy appeal process with a call centre based in Scotland.