Starting a business is an increasingly popular career choice for young people. Rather than leaving school and continuing into further or higher education, many decide to launch their own venture. Analysis of Companies House figures by OneFamily found that the number of UK teenagers starting their own business increased from 491 in 2009 to 4,152 in 2019.
Advances in technology and high-profile coverage of entrepreneurs in the media are among the reasons why young people find value in becoming their own boss rather than working for someone else.
But starting a business as a young person isn’t without its challenges. Many young new business owners haven’t acquired business skills such as planning, marketing, sales and financial management, which can be vital for success. Due to their age, they may lack the credit history or assets to use as security to secure start-up business funding.
Fortunately, various organisations provide young people with access to finance, support and mentoring from already successful business owners.
Discover the personal aspects involved in starting a new business with our free Entrepreneurial behaviour course. As part of our Learn with Start Up Loans partnership with the Open University, our online course is free to join, delivered by experts and includes a free statement of participation on completion.
Funding and mentoring support for young entrepreneurs
Organisations providing funding and mentoring support for young entrepreneurs include:
Start Up Loans
A Start Up Loan is a government-backed personal loan for individuals who want to start or grow a business in the UK.
You can borrow between £500 and £25,000 with a fixed interest rate of 6.2% p.a. You pay back the loan over 1–5 years. The loan is unsecured, so there’s no need to put forward any assets or guarantors to support an application.
In addition to the funding, successful applicants receive 12 months of free mentoring and exclusive business offers to help them succeed.
You are eligible for a Start Up Loan if:
- you’re 18 years of age or older
- you’re a current UK resident
- you’re starting a new business or have been trading for up to 24 months
- you’re unable to secure finance from other sources
- your business is based in the UK
- you have the right to work in the UK
- your business type and loan purpose is eligible under the terms of the scheme
- you pass credit checks, and you can afford to repay the loan
Find out more and apply for a Start Up Loan.
Founded in 1962, Young Enterprise is a national charity providing financial and enterprise education to young people. It works with businesses, schools and further and higher-education institutions to give students the skills and confidence to improve their future career prospects or start their own company.
Many of Young Enterprise’s programmes help participants develop a business idea, set it up and market their own products or services. This provides valuable experience of the principles behind starting a business and the characteristics needed to succeed as an entrepreneur.
Initiatives include the 10X Challenge, which gives school pupils one month to start a business with an initial £10 pledge. The Start-up Programme inspires university students to run a real business or social enterprise over an academic year.
Young Enterprise also works with businesses to encourage their employees to volunteer to help and support young people in developing their skills and preparing for the world of work.
To find out more about programmes you might be able to access, contact your local Young Enterprise representative.
The Prince’s Trust
Launched in 1976 by HRH The Prince of Wales, The Prince’s Trust is a youth charity that helps young people aged 11 to 30 get into jobs, education and training.
Through its enterprise initiatives, the charity has helped 86,000 young people to start their own business.
It works with 18- to 30-year-olds via a free programme held in centres across the UK. After an introductory session, you attend a four-day workshop to meet business advisers to get guidance on business planning, marketing, sales, budgeting and tax. After the workshop, you’ll be given access to a mentor who will support you in planning, testing your ideas and launching your business.
The Prince’s Trust also works with the Start-Up Loans Company to offer low-interest personal loans for business purposes between £500 to £25,000 at a fixed rate of 6.2% p.a.
To join a programme, contact the Prince’s Trust.
New Enterprise Allowance
The Government launched the New Enterprise Allowance (NEA) in April 2011 to help unemployed people aged 18 and over start their own business.
You can access the NEA if:
- you or your partner get Universal Credit, Jobseeker’s Allowance or Employment and Support Allowance
- you get Income Support and you’re a lone parent, sick or disabled
You’ll get a mentor who will work with you to formulate your idea into a viable business and help you to create a business plan.
Once your business plan has been approved, you may be able to get a weekly allowance worth up to £1,274 over 26 weeks. You can also apply for a Start Up Loan.
Contact Jobcentre Plus for more information.
Formed in 2002, UnLtd funds and supports social entrepreneurs who start a business with a mission to support a social, environmental or community cause. UnLtd describes a social business as “an organisation whose purpose is to create impact but has a financially sustainable business model to continue to make a difference. It sits between a commercial business and a charity, often described as ‘profit for purpose’”.
For individuals who are starting a social enterprise, UnLtd provides funding of up to £5,000. For those growing an assisting social business with a turnover under £250,000, up to £15,000 is available.
If you successfully secure the funding, you’ll also get a support mentor to coach you in achieving your goals, access to expert mentors such as business professionals and successful social entrepreneurs, and invites to workshops to learn about different aspects of running a social business.
Find out more and apply for UnLtd’s support schemes.
Want to understand business finance better? Check out our free online courses in partnership with the Open University on finance and accounting. Our free Learn with Start Up Loans courses include:
Plus free courses on marketing, entrepreneurship, project management, management and leadership.
Disclaimer: While we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.