- 9% of all Start Up Loans since 2012 have gone to Black business owners, worth more than £73 million
- Former-rugby league player for the Huddersfield Giants, Bolu Fagborun, co-founded Same Day Solutions, a courier company based in Bradford, with a loan of £15,000
- Tolani Agoro founded Chapmans of London, a non-alcoholic cocktail, with a loan of £16,500
This UK Black Business Week, 2-7 October, Start Up Loans, part of the British Business Bank, announces it has provided more than £73 million of start-up loans since 2012 to businesses founded by Black owners.
10% of this total, almost £7.5 million, has been provided to Black business owners in the last year.
Supporting under-represented groups
The Start Up Loans programme has a track record of providing access to finance to underrepresented groups. Since 2012, the programme has provided 9,534 loans to Black business owners – 9% of its total volume of loans.
In comparison, British Business Bank analysis of the UK SME Finance Monitor for the ten quarters to Q4 2022 found that around 2% of UK businesses are led by those from a Black ethnic group.
The British Business Bank’s 2020 Alone together: Entrepreneurship and diversity in the UK report found Black business owners face persistent disparities in business outcomes, with systemic disadvantage playing a key role.
Once a business has launched, Black business owners report substantially worse outcomes across many measures of success. Median turnover for Black entrepreneurs is just £25,000, compared to £35,000 for White entrepreneurs, while only half of Black business owners meet their non-financial aims, compared to 69% of White business owners.
That’s why Black business owners like Bolu Fagborun are passionate about improving access to finance for entrepreneurs from an ethnic minority background. Bolu, a 37-year-old former rugby league player for Huddersfield Giants, set up his courier business, Same Day Solutions, in Bradford in 2022. The business makes deliveries on behalf of companies and also fulfils contracts with larger courier services like CitySprint and DPD.
Success story: Same Day Solutions, Bradford
Bolu took a loan of £15,000 in April 2023, which he used to put deposits down on four new vans so the business could scale up and fulfil more orders. The business was set up in one of Bradford’s most deprived postcodes and has taken on three people from the local job centre as Bolu strives to provide help to those who need it.
Bolu said:
“Through my past work with Fagborun Limited, I recognised that not enough people from ethnic minority backgrounds take out these loans. There are so many talented Black entrepreneurs out there who might be put off by the lack of available financing, when all they need to grow and succeed is the capital. Putting Same Day Solutions in the spotlight will hopefully provide other people will the proof they need that they too can access the finance they need to set up their own business.
As well as lending money, Start Up Loans helped me come up with a really solid business plan, which is just as crucial to success. My advice to other aspiring business owners would be to give it a go; if you don’t try you’ll never know.”
Success story: Chapmans of London
Another Black business owner passionate about raising awareness of financing opportunities is Tolani Agoro. Tolani, 31-years-old and from London, came up with the idea for Chapmans of London at the end of last year. Her product is a non-alcoholic cocktail, famous in Nigeria but previously not widely available in London.
Tolani look out a loan of £16,500 in August 2023, which she has used to pay for the first production run, the ingredients, and to employ freelance support to help launch Chapmans of London in the UK, opening up a new market for her growing start up business.
Tolani said:
“Growing up, I cherished a sparkling, fruity, and uniquely refreshing drink with flavours that couldn’t be found elsewhere. I never missed alcohol when enjoying it. This realisation led to the birth of Chapmans of London, where we bring one of Nigeria’s best-kept secrets to London and beyond. I spent the end of last year designing the concept and then have spent this year working on the recipe, sourcing ingredients and marketing ready for the launch.
My dream would be for it to be a brand that is successful and available wider than the UK such as in the US, Middle East and Africa. Everyone deserves Chapmans in their lives. I encourage anyone else thinking of going after their dream to go for it – and don’t let the small hiccups get in your way.”
Richard Bearman, Managing Director, Start Up Loans, said:
“Start Up Loans is proud of how its programme consistently over-indexes in its delivery of finance to underrepresented groups, but there is still much work to do. It’s inspiring to hear stories like Bolu and Tolani’s and I hope it inspires other entrepreneurs to take the leap into business ownership. As well as the funding, we also offer business mentoring to support business owners and give them more chance of succeeding. We encourage anyone with aspirations to own a business to research their financing options and see whether Start Up Loans can help.”
The British Business Bank will be at the UK Black Business Show on Saturday 7th October.
ENDS
Notes to editors
Statistics on Black founded businesses in the UK
Black-led employers make up just 0.1% of UK small and medium sized businesses according to the Counting on Black business report by Saïd Business School at the University of Oxford.
BBB analysis of the UK SME Finance Monitor for the 10 quarters to Q4 2022 that around 2% of UK businesses are led by those from a Black ethnic group.
About Start Up Loans
The Start Up Loans programme provides personal loans for business purposes of up to £25,000 at a 6% fixed interest rate per annum and offers free dedicated mentoring and support to each business.
The primary aim of the Start Up Loans programme is to ensure that viable start-ups and early-stage businesses have access to the finance and support they need in order to thrive. A network of Business Support Partner organisations supports applicants in all regions and industries throughout the UK. The Start Up Loans programme is not designed to generate a commercial profit. Capital payments together with the interest are recycled to help meet borrowers’ increasing demands for finance.
Free guides on a range of subjects related to starting a business and recent media press releases are available on the Start Up Loans website.
The funding for the Start Up Loans programme is provided by the Department for Business and Trade (DBT). A development bank wholly government-owned by DBT, the British Business Bank plc is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank and its subsidiary entities are not banking institutions and do not operate as such.
The British Business Bank makes finance markets for smaller businesses work better, helping the sector to prosper, to grow and to build economic activity.
Key Statistics
- Since its inception in 2012, the Start Up Loans scheme has delivered over 105,000 loans, providing more than £1bn of funding.
- In the financial year 2022/23, the scheme provided 9,549 loans with a total value of approximately £
- The economic benefits of the Start Up Loans programme are almost six (5.7) times its economic costs.
- At Spending Review 2021, the Chancellor announced resources to provide 33,000 Start Up Loans over next three years.
Aside from the return-on-investment numbers these statistics are gross estimates and based on Start Up Loans CRM along with externally commissioned research undertaken by SQW Ltd, with support from BMG Research.
Since 2012, 31% of loans went to people formerly unemployed or economically inactive. 40% of loan recipients were women and 20% were from ethnic minority groups (not including white minorities).