Start-up loans scheme expanded
The scheme had originally been aimed at 18-to-24-year-olds, but is now being expanded to those aged up to 30.
To cater for the wider age band, the funding available for start-up loans will rise from £82m to £112m.
But the scheme, which was announced at the end of May, has only lent out £1.5m so far.
The Start-up Loans Company, which runs the scheme, said the relatively slow start was due to the time taken to set up local partnerships, but that the pace of loans had picked up during December.
The target is to lend all £112m by April 2015.
More than 3,000 people have applied for the loans so far, but if the target is to be met then almost 45,000 entrepreneurs will have to take out the loans.
The expansion was officially announced by Prime Minister David Cameron at an event in Preston.
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"The government's role has got to be to try to do everything we can to encourage more start-ups and then to help them to grow, to get finance and take people on," he told an audience of young people and entrepreneurs.
Mr Cameron said banks should also be doing more: "A lot of this should be the job of banks, but frankly after the terrible problems of 2008-9... there are gaps in the market".
One of those gaps was start-up finance, he said. "I am not content to sit back and wait for the banks to get on with this work."
Slow start
But Labour's shadow business secretary Chuka Umunna criticised the way the scheme was being delivered.
"With our economy flat-lining it's essential that initiatives like the Start-up Loans scheme are delivered effectively if they are to provide real opportunities for our young entrepreneurs."
Mr Umunna said the numbers of loan given out so far was massively behind target and the government needed to tackle a lack of awareness about the scheme.
Start-up loans have generally been welcomed by business groups, although there have been suggestions that the average of £2,500 on offer may not be enough to make a difference.
"It is not about creating the next multinational, it is about creating a series of micro-businesses, giving you enough capital to start your own business," said Ketan Makwana, from Rockstar Youth, one of the organisations administering the loans.
But Mr Makwana said the most important part of the scheme was the advice and mentoring that young people get along with the loan.
He told the BBC that he rejected the "cynical view" that the programme was a cheap way of getting people off the unemployment register.
"What it is doing is inspiring a generation to get Britain back into business," he told BBC Radio 4's Today programme.
"It is giving an opportunity to those who want to start a business and maybe increase employment opportunities for others in the future."
'Major shift'
The Start-up Loans Company is chaired by James Caan, who is best known for his appearances on the television programme Dragons' Den.
"I am delighted to see that more and more young people are now looking to set up their own business," said Mr Caan.
"What is clear about the scheme is the take-up is there.
"We have already backed 460 businesses in the last three months. We are looking to back 100 businesses a week," he told BBC News.
The scheme was created by government enterprise advisor Lord Young, whose report on small businesses last year suggested that if the UK was as entrepreneurial as the US, an extra 900,000 businesses could be set up.She said she hoped the scheme would help overcome a negative attitude towards young people and show would they could achieve.
The loans must be repaid within five years, and interest will be charged at the level of inflation measured by the the Retail Prices Index (RPI), plus 3%.
RPI in November stood at 3.0%.
The loans are part of the government's attempts to reduce youth unemployment.
The most recent official figures showed that 17.9% of 16-to-24-year-olds who were not in full-time education were unemployed.
Direct grantThis is a cash award, which is usually given out for activities such as training, employment, export development, recruitment or capital investment projects. With a direct grant most schemes usually require the company involved to put up around 50% of the cost.
Repayable grantUnder this type of scheme cash funding is offered for a project with the intention that the sums are paid out of future revenues. However, if the project fails, the grant is written off.
Soft loanA soft loan is a special type of grant where the terms and conditions of repayment are more generous (or softer) than they would be under normal financial circumstances. So, for example, the interest rates may be less, or there may be no interest to pay at all, and the repayment terms could also be for a longer period.
Equity financeWith equity finance a capital sum is injected into the business and the provider of the funds takes an equity share of the enterprise and (hopefully) when the value of the firm increases the stake can then be returned. However, unlike venture capitalists, the expectations and requirements of the providers of public funds are usually less demanding.
Free or subsidised consultancy
Start-ups can often find themselves in the situation where they are lacking a particular set of skills and there are some specially run schemes which offer to provide these either for free or at subsidised rates.
Start-ups can often find themselves in the situation where they are lacking a particular set of skills and there are some specially run schemes which offer to provide these either for free or at subsidised rates.
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