“Relatively small amounts of money can be vital to the success or failure of fledgling IT businesses,” said Mr Smith – whose company supplies complete IT support to over 1000 SME’s nationwide.
“In the early days of Prism I funded the business with interest free credit cards, student overdraft, graduate loans, student overdraft and supplier credit lines. All of which, I personally guaranteed,” he said.
The Prime Minister said that he hoped that the scheme – which will lend about £2,500 to each business idea that is selected – will lead to the development of 30,000 new start-up businesses over three years.
“In the current climate youngsters can’t raise any sort of bank loan regardless of how good their business plan may be. The StartUp loans are repayable within five years and interest will be charged at 3 per cent above inflation,” said Smith.
“This is a good plan because it is vital that young entrepreneurs appreciate the value of investment, risk and return at an early age,” he said.
Leading UK entrepreneur James Caan has been tasked to chair the board of the StartUp Loans scheme because of his life-long experience in creating and mentoring businesses.
Commenting on his appointment Caan said: “One of the reasons I’m being involved is I am an entrepreneur, I have built a business before, I understand the challenges,”.
“As chairman of the StartUp Loans Company my challenge is to ensure that these funds are distributed without red tape, and give young people the opportunity that I absolutely believe they need,” he said.
Prime Minister David Cameron made clear his ambitions for the scheme saying: “I want this to be the year where people can think: yes, I can do it; that we can get as many viable businesses as possible off the ground, that people can have a go and that we see a whole new wave of entrepreneurs who start small but think big.”