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Funding for Unemployed Entrepreneurs

By: Kevin Watson MSc - Updated: 2 Aug 2018 | comments*Discuss
 
Unemployed Entrepreneurs New Enterprise

The government anticipates that unemployed entrepreneurs will set up 40,000 new businesses by 2013. To help meet this target, it launched the New Enterprise Allowance (NEA) at the end of January 2011. The NEA offers entrepreneurs more than £2,000 worth of funding.

National Programme

The Department for Work and Pensions (DWP) runs the NEA scheme. After initial testing in the Merseyside Jobcentre Plus District, the DWP rolls out the scheme to a further 17 districts. From Autumn 2011, the NEA is a national programme.

Eligibility

In the Merseyside test area, unemployed entrepreneurs must be at least 25 years old. They must also have claimed Jobseeker’s Allowance for a minimum of 26 weeks.

Eligibility for the 17-district roll-out and then the national scheme is slightly different. It extends to those aged at least 18 who have received Jobseeker’s Allowance for 26 weeks.

If the DWP requires any unemployed person to join either the Work Programme or the New Deal, he or she is no longer eligible for the NEA. The Work Programme and New Deal are government schemes that encourage disabled people and the long-term unemployed to gain work experience and learn new skills.

First Stage

When an eligible person expresses interest in becoming part of the NEA, the DWP’s Jobcentre Plus first refers him or her to a mentoring organisation.

After considering the proposed business idea, the mentoring organisation produces an assessment. This looks at the viability of the idea, the prospects for business growth and the entrepreneur’s likelihood of success.

If an assessment is negative, the mentoring organisation refers the entrepreneur back to Jobcentre Plus. When an assessment is optimistic, the mentoring organisation appoints a suitable mentor to help the entrepreneur develop a business plan.

Mentors

An unemployed entrepreneur who passes successfully through the first stage has eight weeks to complete a business plan. The plan must follow a standard format for commercial ventures. The mentor gives advice about this.

Mentors must therefore be experienced and competent. The DWP expects the mentoring organisations to use mentors that have appropriate qualifications and skills. It has also laid down strict time frames for the mentors to work to.

They must, for example, produce the initial assessment of a business idea within five working days. They must also give at least six months’ mentoring support once an entrepreneur starts a business.

Financial Help

Once the business plan is in place, the entrepreneur becomes entitled to NEA funding. This has two parts. The first is a weekly allowance. The total for this is £1,275.

The second part of the funding is in the form of a loan for start-up capital. The total amount available is £1,000.

Other Funding Sources

NEA funding may not be sufficient to start a business. A further role of mentors is to help find additional money if necessary. Unemployed entrepreneurs, however, can also take the initiative to secure financial assistance.

The Prince’s Trust, for example, has an Enterprise Programme and awards start-up business funding to young people aged 18 – 30. A set of assessment criteria determines funding. These include the business idea’s potential for success and the likely risk.

Former armed forces personnel can apply to the Royal British Legion for help. The Legion, working in partnership with other organisations, has grants and loans. The awards are generally £3,000 - £7,500, although it’s possible to obtain a maximum of £30,000. The Legion calls its scheme “Be the Boss”.

The four UK regional governments also have enterprise schemes for entrepreneurs. These offer a mix of grants and business advice.

Enterprise Clubs

Like the NEA, Enterprise Clubs are another new government initiative to help unemployed entrepreneurs. The purpose of the clubs is to encourage successful businessmen and women to provide access to local funding and commercial knowledge. With such help, unemployed entrepreneurs are more likely to succeed with their ventures.

At Enterprise Clubs, unemployed entrepreneurs can also meet like-minded people trying to achieve similar goals. They can give each other mutual support and discuss business proposals.

By using Enterprise Clubs and developing local commercial knowledge and skills, unemployed entrepreneurs can create more realistic business ideas and plans. A good business plan then opens the door to NEA finance. Hence the government regards Enterprise Clubs as complementary to the New Enterprise Allowance.

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[Add a Comment]
Hello...please help me im unemployer right now. Please help me funds for my run business. Thank you.
Mathias Steven sobol - 2-Aug-18 @ 11:39 AM
Bigloz - Your Question:
I have a uk patent on my design. An extendable hanger on a shopping trolley. I had Tesco interested in a 25 store trial, 25000 units, but, unfortunately, I didn't meet the procurement protocol (not enough money behind me). I need funds to improve the prototype and have engineering drawings done so I can source a financial partner who can help me take this to the next level. I have paid hundreds of pounds to companies advertising how much they can help but once paid, do very little. What help is there for people like me? I have a terrific patented design that can improve in store clothing sales massively. Bearing in mind that 38% of all online clothing sales are returns for wrong size, wrong colour, wrong fit and poor quality. In store buying removes these objections. Can you help?

Our Response:
Have you tried crowd funding?
GrantsExpert - 22-Jun-18 @ 12:30 PM
I have a uk patent on my design. An extendable hanger on a shopping trolley. I had Tesco interested in a 25 store trial, 25000 units, but, unfortunately, I didn't meet the procurement protocol (not enough money behind me). I need funds to improve the prototype and have engineering drawings done so I can source a financial partner who can help me take this to the next level. I have paid hundreds of pounds to companies advertising how much they can help but once paid, do very little. What help is there for people like me? I have a terrific patented design that can improve in store clothing sales massively. Bearing in mind that 38% of all online clothing sales are returns for wrong size, wrong colour, wrong fit and poor quality. In store buying removes these objections. Can you help?
Bigloz - 21-Jun-18 @ 12:59 PM
Ray - Your Question:
Is it possible to get a grant to help me for deposit on an apartment from housing benefit thank you

Our Response:
You could try the rent deposit scheme which acts more like a loan than a grant. See our guide here
GrantsExpert - 15-Jun-18 @ 3:20 PM
Is it possible to get a grant to help me for deposit on an apartment from housing benefit thank you
Ray - 15-Jun-18 @ 1:24 PM
Netty - Your Question:
I’m looking for a grant to help me pay for driving lessons as I’m single parent of 4 at the age of 37 and nearly finishing my Greengrocer course graduating in October but to be the best I can be I need a driving license to be able to go out be the business woman I need to be and I have not got that ability to see customers without being escorted around I find it so hard work especially as I’m getting to the stage of my life I need the transport to expand my career. Just haven’t got the money so was wondering if there is any funding grants to help out with woman like me as times are tough just need the help to start me off with my career

Our Response:
We don't know of any grants for this specific purpose. You could try the government's help with moving from benefits to work information.
GrantsExpert - 13-Jun-18 @ 2:57 PM
I’m looking for a grant to help me pay for driving lessons as I’m single parent of 4 at the age of 37 and nearly finishing my Greengrocer course graduating in October but to be the best I can be I need a driving license to be able to go out be the business woman I need to be and I have not got that ability to see customers without being escorted around I find it so hard work especially as I’m getting to the stage of my life I need the transport to expand my career. Just haven’t got the money so was wondering if there is any funding grants to help out with woman like me as times are tough just need the help to start me off with my career
Netty - 10-Jun-18 @ 1:31 AM
Bee - Your Question:
Hello. I am a 30 year old woman. I'm fast approaching my final time in my temporary job. I fear I'm going to be unemployed yet again. Back in 2005 when I was jobless for the first time ever, I thought of starting my own shop/business. I know what I want to do, and yes their is a gap in the market for the type of thing I want to do. No other shop or market stall does it, as far as I have ever seen. My only problem is I don't know how to put a business plan together and also money. My partner works full time and pays all the bills, soon will have to pay my bills also again. I was unemployed for a month before I got my temporary job. I didn't think the job centre could help me with my business idea, so I never told them. Is it worth telling them about? I have a friend who will gladly come work with/for me. Also I know someone else I could possibly employ. Any help or advise would be much appreciated.

Our Response:
There are lots of incentives for people to start their own business. The job centre might actually be able to help as well as your local council who can direct you to business start schemes which help you create business plans and find funding. There are some government schemes that you might find useful here:
Start a Business - Get Funding
New Enterprise Allowance
Start Up Loans
GrantsExpert - 11-Jul-16 @ 2:14 PM
Hello. I am a 30 year old woman. I'm fast approaching my final time in my temporary job. I fear I'm going to be unemployed yet again. Back in 2005 when I was jobless for the first time ever, I thought of starting my own shop/business. I know what I want to do, and yes their is a gap in the market for the type of thing I want to do. No other shop or market stall does it, as far as I have ever seen. My only problem is I don't know how to put a business plan together and also money. My partner works full time and pays all the bills, soon will have to pay my bills also again. I was unemployed for a month before I got my temporary job. I didn't think the job centre could help me with my business idea, so I never told them. Is it worth telling them about? I have a friend who will gladly come work with/for me. Also I know someone else I could possibly employ. Any help or advise would be much appreciated.
Bee - 9-Jul-16 @ 11:04 AM
Hiya I was looking to start my own small holding/farming businiess I do have previous experince and was wondering on how to apply for a grant or loan for help ??
hillbilly - 10-Apr-16 @ 1:46 PM
I am a. jobless and handicapped
shoka - 25-Mar-16 @ 4:54 AM
I am a girl of 30 yrs old.I have a good idea of agriculture. I want to start a chicken business for broiler chicken. I m also started.my problem is I don't have money to put more chickens and buy chicken food. I open my business because there is no job opportunity now.I have to people who they assist me ( employeer) I f I get more. I will employer more. people. my business is registered. also.please I need yr help.
nhlansi - 27-Feb-16 @ 9:46 AM
Hello I'm 22years old born and raised from Northern Uganda, holding a certificate in general agriculture and extension work unemployed and I have greater interest of starting up a mixed farm ,if you have any help please is highly appreciated thanks you
abwon - 12-Feb-16 @ 9:28 PM
Hi am been in Bridlington for ten years and looking a job but it's seems to that my surename getting in a way , every time I had in a CV I get on so please as I have to do something as I have a morgage and to lads with diffulties . So am really want to open a business in Bridlington so I can be with the boys to help Me .. So please consider as I need to do something quick .. Many thank ..
Shaz - 12-Feb-16 @ 12:19 AM
People arent hiring where I live and they do and the mayor and people don't want jobs to come into peoples and my town . Will yall help me please with funding that I don't have to pay back please will yall help me with funding?
Dj - 5-Feb-16 @ 7:43 AM
I'm an unemployed man looking for a business grant I don't have to pay back to start my own pizza or burger franchise or both can anybody help me please? I don't have a job.
Dj - 5-Feb-16 @ 7:36 AM
Dear management I need your help I have a business idea and I have a location to work from but to start this I need 20000 for trampolines, transit and personal training equipment to help everyone with a physical and mental disability get fit, have rehab, and to enjoy and have fun also my long term aspiration is to open a community support centre for everyone with and without disabilities to go the facilities that we are going to have in Barnsley and then expand over the country Hydro therapy pool & swimming pool Crèche Fitness suite Internet/ education centre For staff and training Vehicle to transport clients to and from the gym To get this up and running will cost £1.5 million pound
Daley - 29-Jan-16 @ 11:16 AM
I am a girl, 22 years old. I was doing Agriculture at the college a Diploma in Animal Production and now i have finished studying but struggling to get a job. I now want to start my own poultry business which will be layers and broilers and also want to do a hatchery when time goes. The start up capital is the main problem i have. I have asked at the municipality to assist me with the place and asked them to assist me with a poultry house. If i can get help because jobs are not available this would be the best way of getting income and it will help me to further my studies
Smally - 12-Dec-15 @ 5:14 PM
im a person to struggling start my business to can aliviate poverty in the country so i really need you help with the funding to proceed with the business ,i thank you
virgo - 11-Sep-15 @ 1:33 PM
jack - Your Question:
I'm after some grants to open up a shop, I'm 53 & long term unemployed/sick, I am struggling putting pen to paper with my idea as in business plan to apply for the funding, any information is appreciated thank you

Our Response:
Try your local chambers of commerce and any other business development organisations in your area. Many local authorities also have lists of funding opportunities and grants for new businesses - especially the unemployed. You could also try the new enterprise allowance which is aimed at helping people move from benefits to work. There is more information here . Job Centre Plus should be able to help.
GrantsExpert - 3-Sep-15 @ 11:36 AM
i'm after some grants to open up a shop, i'm 53 & long term unemployed/sick, I am struggling putting pen to paper with my idea as in business plan to apply for the funding, any informationis appreciatedthank you
jack - 2-Sep-15 @ 6:24 PM
I'm an unemployed man looking for a Business grant to start my own Business.Can anybody advise me on my options.
Jonah - 19-Jul-15 @ 8:13 PM
@Kingy. Try:
Government information on setting up a business and the funding you can access. The Rainy Day Trust helps past and present employees of the home improvement and enhancement supply industry. The Prince's Trust Enterprise programme mentioned in the article (you've not given your age so this may/may not be applicable).
GrantsExpert - 24-Feb-15 @ 11:51 AM
hi, i am a unemployed carpet / Laminate flooring fitter... [fully skilled]i can not find work, and would like to work self employed, although i have no transport ,is it possible to get a grant to get a van to work out of...
Kingy - 21-Feb-15 @ 9:19 PM
@Hop on! shop. You can find more information and details of mentors at job centre plus
GrantsExpert - 27-Jan-15 @ 11:11 AM
I would like to be put in touch with a mentor. It's my husband who receives esa. I am unemployed. We've attempted to create our business years ago but lack of money and equipment we had to put it on hold. I never knew of help out there. We've tried crowdfunding but failed target. Any advice?
Hop on! shop - 24-Jan-15 @ 1:11 PM
@ZIO. Try this search facility on the UK business grants website.
GrantsExpert - 19-Nov-14 @ 12:20 PM
Greetings,I AM A LADY OF 31,I'VE BEEN TRYING TO GET GRANTS FROM THE DEPARTMENTS THAT DO GRANT PEOPLE WHO WANTS TO START BUSINESSES,BUT I HAVE NOT BEEN HELPED.NOW I WOULD LIKE TO KNOW IF I CAN REICEVE ANY GRANT TO START MY BUSINESS,I WWANT TO SELL CHICKEN AND EGGS,I ALREADY HAVE THE PLACE AT A CERTAIN FARM BUT NOW I DO NOT HAVE THE EQUIPMENTS TO START UP
ZIO - 18-Nov-14 @ 3:52 PM
hi, iam an unemployed plasterer [fully skilled]i can not find work, and would liketo work self employed, although i have no transport ,is it possible to get a grant to this end ,
n/a - 6-Aug-14 @ 1:03 PM
Please help with funding to start my bussiness
Prisci - 9-Apr-14 @ 4:48 PM
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