New Enterprise Allowance scheme - My story

pinkypoopydoo

I've no experience of the loan, sorry Frazz - all I got told about it was that you needed to have already started the business before you could get it, which seemed daft to me - I was needing help with the start-up costs, which needed paid up BEFORE I started, not after!

Andy, you sound like you are just having a total nightmare - would it be worth just saying "screw it" and signing yourself off and going for it, if your going to be expected to survive without even JSA for 17 weeks? What a nightmare.

frazz007

pinkypoopydoo - yeah seemed daft to me but what they mean by that is sign off jsa and you only do that after they tell you your loan was approved which mine was a few days after my mentor finally submitted my plan you fill the forms out for the direct debit repayments etc via post whilst your waiting for that to get their you sign off so when they check (which they do very quickly) they can see you have started your biz

andy - you can go self employed now and if your over 25 and say your doing more than 30 hours a week for the biz which in early stages you will be just in research alone you can get tax credits according to their online calculator ill get 55 a week beats the jsa sanction any day if you was after the loan to get your biz started you can go to start up loans its a lower intrest as well as more than 1k

Start-Up Loans typically offers unsecured loans of around £2,500, charged at a 6pc interest rate. It has so far provided almost 3,000 budding entrepreneurs from a range of backgrounds with £13m in start-up funds.

An expansion of the programme to allow individuals older than 30 to apply is expected to be announced May 2013.


im not sure if they did add an over 30 expansion but their website is startuploans couk wont let me post the url

andyscott

Frazz007 thanks for that website it looks interesting although I am hoping to get my business started without any loans, not sure how exactly though.

NEA was always going to have major faults because your working with business mentors at certain groups who are been restricted by DWP procedures. If DWP want to use these organisations then it should be made certain that people will be able to have a direct number for mentors.

What is the point in having a mentor when you run into a problem and have to wait 2 months for your mentor to get in touch?

I was advised today if I was going self employed then to sign off JSA as going full time employment instead of saying Self employment. Apparently if you sign off to go Self Employed its not that easy to get back onto benefits if need be.

frazz007

wahoo just rang them again and spoke to the manager this time he said i will defiantly be getting paid either later on today or tomorrow (i think they got fed up with me calling them)

andy - sounds like your in the place i was 3 years ago when i came up with the idea for my business and this year i gave in and asked for help and got it . the nea programme in theory is the best idea theive had in years to do with starting a business nut theory and practical are two different things i had a group sessions with my mentor and she gave us all her home, work and mobile number as well as emails only prob is im not sure she actually understood it all herself luckily i have done a business course years ago and i ran my own business till i made some mistakes when the credit crunch hit and lost it all :-( and ended up helping 6 other people on the course to write their plans

DannyB_2

Good Afternoon All, I have been a long time user / lurker on MSE but after finding this thread, have built up the courage to post.

I am at the initial stages of going self employed via NEA. I was made redundant a year ago today after working for 24 years. I have had a nightmare year dealing with my JC. Numerous "advisors" who didnt have a clue, some one on here rightly said they treat you as a number and just fob you off. I used to put silly things in my jobsearch to see if they even read it, like "played with monkeys", "ran to Namibia in 3 hours" and no one noticed!

Totally dissalusioned with anything they would ever do for me, 2 weeks ago I asked about starting my own business, the advisor rang the local sanctioned company - Blue Orchid - straight away as I was sat there, and I had an appointment at my JC 3 days later!

I had already started on a business plan and cash projections, so brought that with me to the appt. Went over my ideas with mentor, all positive comments. with the exception of changing my 20+ page detailed business plan to a basic form they has set up. Had a second meeting 4 days later at Blue Orchid office to go through paperwork and finalise my business plan and cash projections. All positive so far I thought, went home smiling.

Then the usual fun began, went to sign on Monday this week, explained I was working on business plan, researching the market, looking for opportunities etc to be told I couldnt do that until I signed off! and still had to look for work.

As a matter of course I have still been looking for work, hoping to get either a full or part time job until the business progresses, so I put my jobsearch on the universal jobmatch as I have done for over 6 months, the advisor said due to a password problem he couldnt get on the site to check and wanted me to prove my jobsearch before I could sign on.

I tried to explain that I did not have to while progressing through the NEA programme, until another advisor told him just to let me sign this time and let my usual advisor sort it out as they had a backlog of people waiting to sign-on due to staff at the JC calling in sick!

I have been working on my business plan details all week, until this morning i get a letter saying they have sanctioned my JSA due to not providing work diary and keeping my part of the agreement. I also had another letter saying I was being put on Work Programme from next week as I have been out of work for a year! I am concerned I may not get NEA due to the year time limit.

In working for 24 years, even working for The Daily Mail for 11 of those years I have never dealt with a company / group of people so ridiculous as those in this JC.

I am hoping my business plan gets the OK so I can get away from there.

andyscott

it may already be too late. You need to contact your advisor NOW.

As soon as they refer you to Working Programme then your not able to get onto NEA. I am not sure if your letter is saying your on Wp next week or been referred next week.

Always_Saving_2

£1000 to start a business is pretty stingy in my opinion, that amount would simply not suffice for even some of the most simplistic of business ideas. As for the 10% interest, I think that's a little high.

OP I'm curious as to how you're going to spend the money?
Obviously the service you are offering means you can design and build your own website which is great. Are you going to use the loan on soley advertising? Are you going to outsource?

bellkat

Sorry to hear about your bad experience DannyB. I'm also with Blue Orchid, and up to now the whole process has run smoothly for me.

It sounds like your advisor doesn't know the NEA process, as seems to be the case for lots of people on this thread.

Like Andy said I would definitely try to contact your advisor, or ask to speak to someone who understands the NEA process.

You could also maybe ask your mentor from Blue Orchid to contact them, because once I began the process with them I didn't have to do the usual jobsearch procedure.

Hope you manage to get it sorted out.

andyscott

Always_Saving wrote: »

£1000 to start a business is pretty stingy in my opinion, that amount would simply not suffice for even some of the most simplistic of business ideas. As for the 10% interest, I think that's a little high.

OP I'm curious as to how you're going to spend the money?
Obviously the service you are offering means you can design and build your own website which is great. Are you going to use the loan on soley advertising? Are you going to outsource?

I totally agree that £1000 is not good enough.

It knocks out so many business ideas straight away. It basically means you cant set up a business that requires premises. A deposit and a months rent is going to use up your full £1000. Meaning you have no money left for stock, fittings, advertising, following months rent etc

The £1000 maybe sounds more suitable for business ideas such as bookkeepers, mobile hairdressers, cleaners etc Even at that start up costs can still be high for equipment, website, advertising etc

You also have to remember that really you only have 3 months to set up a business because after 3 months your NEA payments are only £35. After 6 months you get £0 so you really need to make sure it takes off quickly.

Even if your able to make a weekly profit of £70 per week after the 6 months NEA, it is not really good enough because obviously this is money you need for living but at the same time you need extra money to advertise your business to ensure it grows.

What happens if your not making any money after the 6 months? From what I have heard if you sign off JSA to go self employed, its not easy to get back onto JSA because its the risks involved with setting up a business.

Even if your business is struggling or fails you still have the £1000 loan needing to be paid back. It should only be payable once your business is stable.

There are so many other ways that they could make NEA better, such as:

Expand it to a year period but if you reach certain profit before the year your benefits stop.

How about Tax exempt for first year

Maybe even offering council owned premises that have been empty for a while to NEA business for a free 6 month period.

The government are the ones who really benefit from the scheme.

What do they offer us?

Mentors that you either never hear from and the mentors who are good are restricted by fools at the JC.

Loan of a £1000 which is paid by with high rate of interest.

Been able to work while still claiming reduced rate of benefit. (Although if you were to tell them you were only doing 15 hours per week on business, making no money and still looking for work you would get full JSA)


What does the government get:

You off benefits whithin 6 months.

Your benefit rates cut straight away then halved after 3 months.

Charge you Tax from when you start trading

Charge you National Insurance straight away

andyscott

If anyone is looking to get a website designed or even just to get a price to put in business plan just let me know and I will pm you the website of a very good developer.

I have already used him to build a site for me. He is very proffessional and his prices are great and better still it wont cost you a penny until site is completed and you have tested it and are happy with it.

He gaurantees to beat any price that your given.