New Enterprise Allowance scheme - My story

Andy2013

You sound so ready for this , such a great attitude good for you, its really hard at times and you need your sort of outlook to get through it.


We don't need to know what your doing , in fact keep it to yourself if you want, its your idea and hard work, you can still talk about without us knowing, most of us are the same, I don't want people getting hold of my hard work .


And yes it is your baby ............... sometimes it will **** itself and go horribly smelly but when it smiles at you its well worth those sleepless nights

H_Metal_Fan

Andy2013 wrote: »

You sound so ready for this , such a great attitude good for you, its really hard at times and you need your sort of outlook to get through it.


We don't need to know what your doing , in fact keep it to yourself if you want, its your idea and hard work, you can still talk about without us knowing, most of us are the same, I don't want people getting hold of my hard work .


And yes it is your baby ............... sometimes it will **** itself and go horribly smelly but when it smiles at you its well worth those sleepless nights

Oh yeah so ready for this. It's not just money or anything it's going to provide a great deal of job satisfaction as well. I'm not overly worried about having anything stolen off me idea wise I just wanna keep everything hush hush until it goes live. So it's strictly a need to basis right now. From my research nothing like this has been done anywhere in the world before now so it could be a rather interesting show and potentially could put the noses out of some rather big companies who have never needed to do anything like this before. They enjoy the luxury of brand loyalty and don't get much new competition. I'm rather sure this will be a huge hit. No massive money maker or anything but if it makes me a living while saving other people a load of money when breaking big brand monopoly's it's gotta be a win win situation especially with the finances of a lot of people like they are.


In a way I'm looking forward to my first screw up with this. Always loved a challenge and this will be no different. Just have to hope it's not something so big it'll leave me lost as for what to do the first time. A couple of nice small screw ups would be nice while I get my feet properly under the table lol. Touch wood like but doubt it now I've just admitted liking a challenge knowing me my first balls up will be a huge one.

H_Metal_Fan

TrueBlue1965 wrote: »

Hi H Metal Fan. Sounds like you have your head screwed on and your in control of the NEA process.

Look at the business plan as a research project and your aiming to put your ideas on paper. Once you have completed your business plan. Hopefully, you will have some of the answers to difficult questions your likely to come across once your running your business. Hopefully, you will have most of the answers because you did all that research to complete your business plan.

As your after finance to start your business (website). Im guessing your hoping to get the NEA loan? If im correct. You need to think about how the whole loan process, business plan and signing off UC all works. You cannot get the loan until your business plan has been signed off by your NEA advisers. You cannot get the loan paid into your bank account until you have signed off UC. JCP tell the NEA loan providers that you are now signed off UC. So, timing is everything!

I would not be aiming to sign off UC until your NEA loan has been agreed and signed for and processed by the loan provider. You want the loan ready to go into your bank account as soon as JCP tell the loan provider that you have signed off UC. The loan can take upto3 weeks to process once you have had your business plan signed off. So, if you expect to have your business plan signed off on 27th. Aim to sign off UC about 3 weeks after that date. If you dont have the loan in the bank. Your not trading!

Im not sure how Working Tax Credits works as part of UC. However, im guessing it will work very similar to the old Working Tax Credits system. As your a couple. You will need to be working 30+ hours per week and be able to show that your trading (invoices, in,s and outs of your business). See the connection between getting the loan set up and paided into your bank account before you sign off the unemployment part of UC. So, your able to work in your business and trading? Better off having everything in place before you sign off UC. Otherwise your living off the NEA payments before you have a chance to start making money from your business. You might be happy with those extra few weeks of NEA payments 6 months down the line.

You will need to keep good records for UC/Working Tax Credits/Housing Benefit and NEA. Your likely to be requested to show your books/records to prove that your trading. In my case 3 times at JCP for NEA and twice in my first year of trading at my local One Stop Shop re housing and Working Tax Credits. Those benefits are what allow you to survive until your earnings start to grow from your business. The more you earn. The less support you will get from those benefits.

Hope this helps and good luck.

Thank you TrueBlue much appreciated. But things work slightly different for the better under UC than they did under JSA.

Under JSA as you rightly said I'd have had to sign off before hand. Under UC though benefits are not affected in the slightest until I am earning £111 a month. This includes self employment as well working for someone else.

After that £111 has been met for every extra £1 that I earn 65P is taken from my payment until it reaches nothing at all. At that point I still don't "sign off" exactly.

I've been told it works more on a bucket system. A work search bucket and a none work search bucket. So people who are self employed do not need to look for work. I actually had my work search requirements of 35 hours a week full removed the other day and changed to working daily on my business and my business plan.

Another example of this none work search bucket is for people who have gone onto the sick. Anyway once I'm earning enough that I won't get any money I'll stay in the bucket with no search for 6 months before my claim will close on it's own. I'm not applying for the loan at all. My weekly payments are going on a website and people will pay me in advance before I make orders elsewhere so stock won't be an issue.

All I have to do is go into my local JC+ office once a month show I'm working on the business even if that's just advertising so they can make sure I'm not just sat being lazy taking my benefits and have no intention of working on the business or making it make a profit in any way shape or form. If you can't prove you are working on things they will then require you to start looking for regular work again. Understandable of course.

For the first 12 months they believe what you earn is what you tell them as well. No assuming you are earning minimum wage for 12 months grace. If I can't turn a tidy little profit by then I might as well call it a day anyway so no big issue.

So no signing off I can still claim while my profits are low it's a more elegant system to say the least. Best of all plenty of information is readily available on the advisors support documents. That's how I know how it'll all go down before getting to them stages. I'm well researched and would advise anyone who tuned down the scheme under JSA to reconsider once on UC. It honestly looks like they've got it right this time around.

neastory

Does anyone have any experience of using NEA to set up a business that requires a longer set-up/pre-trading period?

I have an idea for a new product which will need a development partner and funding. I've taken advice and it is thought viable. I expect to get to the funding stage within the next 20-26 weeks which would be within the time frame of NEA however, it will likely be next year before any actual trading commences.

I recently finished a contract so am unemployed and meet the conditions of NEA and this would help keep things ticking over until the funding stage is reached.

Alternatively, has anyone used NEA to set-up a business closer to the minimum 16 hours per week required in their guidance rather than full time? And did they meet any resistance to limiting their hours from the JC and/or NEA advisor? This may be an alternative for me as I could make my NEA business a freelance consultancy providing the same services as my old day job and still have the time required available to work on the product idea. I have a few existing contacts that I'd be able to get work from so it would be a genuine business - just not one I'd have any long-term aspirations for.

I'm due to see my JC advisor next week and will only tell them of the freelance concept as I'm not sure they're subject to an NDA that covers this (and doubt they'd know even if they are). Nor, do I imagine they'd be happy to sign one and I'd really rather not be stuck there for 5 hours explaining what an NDA is and watching the confusion and panic swirl the office.

But really I'm just looking for thoughts/guidance as to what business idea I should present to the NEA adviser when I see them. Or do I dare risk being honest and explain both options and take his/her advice from there?

It would seem a little daft if I can't get start-up support for the option that would create employment but could for being a PT sole trader, but the JC system is nothing if not daft.

Maddybee33

Hello people :-)
I have just made a visit to Jobs and Business Glasgow who suggested that I sign up for NEA to help fund my business so that I can start buying stock.

Although I am currently self employed and not on JSA (although earning very little at this moment in time), they suggested that I start a claim just so that I can get on the program. I find it very frustrating that all these programs are connected to the Job Centre (as I hate the place and have been doing my very best to avoid it). I have a partner doing a PHD, and apparently his bursary alone is supposed to be 'enough' for us to live off, so I haven't managed to claim any council tax reduction, even though it's a massive strain to pay it.

I was wondering if anyone entered the NEA scheme with similar circumstances? How did you find it? I've written about half of my business plan already- if it's done when I apply for JSA, do you think that I'll be able to fast track the process? I completed a business module as part of my degree, so I am fairly confident with it.

TrueBlue1965

Hi Maddybee33,

It might be that Start-up loan company is for you as its funding that your after. I went though the Start-up loan process after a mix-up with the funding for NEA. Very similar process to NEA loans with the Start-up loan company loan but with different aims. The main difference being that it is designed for businesses that are already trading but need extra funding to grow.

It was a simple and quick process of completing there forms and adding a business plan. I then had a phone interview to clear up a few issues with my business plan and the amount of funding needed. Then, I was offered a loan if I could prove that I could make sales of my products.

They where offering me a £5k loan if I hit there sales targets. Very strange offer considering that I had no stock or money to build those products!.

Things then became clear who was the new NEA loan provider. It was not the Start-up loan company as believed. So, went with the new NEA loan provider instead of continuing with the Start-up loan company offer.

The big difference with NEA is/was that you get the loan if your business plan is signed off as viable. As a new business with no sales record. NEA was the right option for me. You have a business with sales. So, you should not have many issues in showing that your business can make a profit but needs extra funding to grow.

cooper0303

Great thread, thanks to all the contributors for providing their experiences.

I've just registered to claim JSA online and am now waiting to receive my initial appointment at the Job Centre.

I'd like to apply for the NEA scheme straight away. Does anyone know if this is possible or do you have to have been claiming JSA for a pre-determined amount of time?

Thanks

JazzBin

cooper0303: I belive they changed the rules so you can apply for the NEA as soon as you're claiming JSA, it used to be 26 weeks? now you can apply right away. I think that info is also buried in this thread somewhere.

As mentioned above, this is a really great thread, and thanks to all the contributors for providing their experiences.

Myself I'm about to take the plunge and sign up to the NEA, well actually I've done the BP and I'm just waiting around for my mentor to sign it off and then get on with business. Although I'm now very reluctant to do this - since GOV has recently announced Tax Credit changes coming very soon - which I suspect could hit NEA folk. Anyone got any info on this?

Currently £65/week NEA + £55/week Tax Credits, could get nuked into just £65/week - eek! and then just a bare £35/week - doesn't sound like a appealing situation to be attempting to start a business - you really need all the £££ help you can get!

I also got told you can apply for the ADF/FSF (max £300) before you sign off - to help buy must have business gear?

I also heard the max limit for the NEA no credit check loan is £2500?

many thanks

Here's my experience/info, just in case any of it has changed:

you have 8 weeks to complete a business plan

in my case it was a excel spreadsheet - all the complex sections filled in by the mentors, and simple stuff filled by myself. Once done it gets sent off to somebody who verifies it and decides if it's viable or not.

1 visit to Business center and 2 visits to JCP mentor and a few emails to finish this for me.

once complete and deemed viable you have a further 13 weeks to sign off the JSA, if you don't sign off in that time that ends the NEA experience I believe.

Only then can you apply for the so called "soft loan"

I've been offered 2 - one from the business center @6% with more "strict" checking
and one from my provdier @9% with apparently no credit check up to £2500(this is what I have been told - don't know how true this is).

The loan you only have to pay the interest on the first year - so £2500 would be:

@9% £225/yr or £18.75/month
@6% £150/yr or £12.50/month

Once you sign off - you'll get your NEA payments - you still have to sign on as such, and apparently you can still get sanctioned - !!!!!!??

I've been told you can apply for the Advisors discretionary fund/flexible support fund - you have to do this before you sign off, or sign off on the business plan. This is a max of £300 depending on the fund status (£23 million for the whole of the uk), and it's totally up to your advisor if you get it - so if you've got a "scagnetti" like me - you're doomed on this one


JazzBin

pinkypoopydoo

JazzBin wrote: »

Once you sign off - you'll get your NEA payments - you still have to sign on as such, and apparently you can still get sanctioned - !!!!!!??

JazzBin

You don;t have to sign on, as such, but you will be required to go to appointments at the Job Centre (I can't for the life of me remember if it was three times or four times now) through out the duration of the NEA payments, to provide proof that you have actually started trading, and that you are working on your business.

The meetings are pains in the bum (they were for me, at least, as I had an absolute dragon for an advisor), but it's to prove that you're not sitting at home, living the high life on the NEA payments, rather than trading.

NEA_insider

The loan associated with the NEA Scheme IS from the start up loan company. Once you are on the NEA scheme you can only apply for a start up loan through your NEA provider.