There has been controversy recently about the widely back Startup Loans government scheme which has been heavily backed in the halls of Whitehall. Aimed at attempting to kick start the precarious UK economy, Startup Loans is designed to help boost UK entrepreneurs establish successful businesses. However, a recent report in the Financial Times has revealed that 40% of loans are unlikely to be repaid.
With a revelation such as this, many people have been left wondering whether it might be better for business owners to find alternative funding methods, such as a logbook loan calculator, which gives better opportunities for paying the loan back. Mr Sawyer, speaking on behalf of Startup Loans, questioned the reliability of the Financial Time’s report though. He explained:
“In fact, 96pc of the start-ups we have loaned to are still trading. Bad debt accounts for just 4pc. If we had no bad debt then we would only be lending to the kinds of businesses that could have probably got bank funding. If you want to reach people who are excluded from traditional finance routes, you have to expect some bad loans.”
Indeed, as many people know, it is often extremely difficult for those from less privileged backgrounds to receive access to funding. Recent Startup Loans data has found that 45 per cent of loans go to black or ethnic minority communities, while 45 per cent of borrowers are unemployed. Mr Sawyer argues that many of these startups would not have been able to exist with the scheme’s help:
“Most of the firms we are seeing are low-tech, like sandwich delivery. The government has this vision of everyone writing apps but the reality is literally bread and butter stuff. We don’t just provide capital, we help them with their business plan and marketing. It’s not just about helping them start, but to survive.”
However, with only four out of every 10 loan applications currently approved by the venture, there is no doubt that some worthy entrepreneurs are going to miss out. Fortunately, there are other ways to raise finance. A logbook loans calculator can tell somebody how much money they could borrow against the value of their car in a matter of minutes. This means that if a new business encountered a cash flow problem which needed a quick boost of finances before its next invoices were banked, a log book loan calculator may provide the ideal solution.
Some people turn to their families when they are in need of a cash boost. But this can be an extremely unwise move to make. It is saddening how many families fall out over money. If you are going to borrow money from a relative, make sure that some terms are written down so that there is as little potential for misunderstandings as possible. Government schemes such as Startup Loans may have their hearts in the right place, but for people on the ground it isn’t always so easy to find the investment that they so desperately need to find.
