By Max Clarke

After an initial trial in Merseyside last month, British Entrepreneur and employment expert, James Caan, threw his support behind the Coalition Government’s New Enterprise Allowance start up loans in anticipation of the scheme's expansion to target areas of high unemployment next month (April)

“There has been widespread criticism of the £2,000 start-up loans with critics saying that they are not large enough to be meaningful but as an entrepreneur I know that £2,000 can be significantly helpful,” said Mr Caan. "With the advances in technology for example, many people are able to set up online businesses at little or no cost at all", he added.

"To quote the Big Issue motto, it should be a ‘hand up not a handout’,” he said (Mr Caan is Chairman of the Big Issue Foundation).
"Some of the best business ideas have been launched during recessions with no loans whatsoever. I believe in ‘organic growth’: you should aim to grow at the pace your business grows rather than saddling your future with debt.”

Prime Minister David Cameron spoke about the New Enterprise Allowance start-up loans at last week’s Conservative Spring Conference in Cardiff. He said: “For a lot of people there's one simple barrier - they just don't have the money. They've got a great idea but they're out of work so they can't bring it to life. That is where our New Enterprise Allowance comes in. If you're unemployed and have a sound business plan we'll give you a package of support worth up to £2000 to get you started.”

Mr Caan went on to say that there is a perception amongst many potential entrepreneurs that they couldn’t start a business without borrowing money. “People are virtually conditioned into thinking they are missing out unless they're taking out loans with banks. That's not necessarily the case," he said.