How to get £1,274 to start your own business on Universal Credit

BUDDING entrepreneurs on Universal Credit can get £1,274 to start their own business.

The cash is available under the New Enterprise Allowance (NEA), which aims to help unemployed Brits set up on their own.

Workers who are already self-employed can also get support under the scheme to help them develop their business.

The scheme was launched in 2011, but it could be especially useful now following the coronavirus crisis.

The pandemic has pushed up unemployment by 813,000 people, with another 56,000 Brits losing their jobs last month.

Government figures released in January showed that more than 250,000 people have launched their own businesses with NEA support between April 2011 and June 2020.

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And in the four months to June last year alone, nearly 3,000 jobseekers set up on their own.

If you're keen to start your own business, we explain how to get help under the New Enterprise Allowance.

Who can get the New Enterprise Allowance?

The New Enterprise Allowance is designed to help unemployed people who claim out of work benefits to set up their own business.

You may be eligible for support if you're over 18 and you or your partner get Universal Credit, Jobseeker’s Allowance or Employment and Support Allowance.

You may also qualify if you get Income Support and you’re a lone parent, sick or disabled.

If you already run your own business but want help to develop it, you can get support if you're on Universal Credit.

How much will I get?

How much you'll get depends on your individual circumstances and whether you're already self-employed.

Starting your own business

If you've not yet set up the business, you'll get a mentor who'll give advice and support to help you get started.

Once you've made a business plan that your mentor has approved, you may also get a weekly allowance worth up to £1,274 over 26 weeks.

This is paid out at £65 a week for the first 13 weeks and is then followed with £33 a week for a further 13 weeks.

If you need capital, you may also be able to apply for a loan to help with costs.

You don't need to pay back the allowance, but keep in mind the latter is a loan so you'll be required to pay this back.

Developing your existing business

If you already have an existing business, you may be able to get a mentor who'll give advice to help you progress further.

You may also be able to apply for a start-up loan if your business is less than two years old.

How do I apply?

If you're keen to apply, you should talk to your Jobcentre work coach.

They'll check your business idea and help you if you're eligible.

Keep in mind that if you're currently receiving Jobseeker's Allowance, you can't claim the allowance or apply for the loan until you stop the benefit claim.

In order words, make sure you work closely with your mentor so you're confident about your business plan beforehand.

We round up the loans and grants small businesses can apply for now – and the support is worth thousands of pounds.

From start-ups to small businesses, we also share tips on how to manage working from home during Covid.

In February, 1.4million businesses were given more time to pay back Covid bounce back loans.

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