Small Talk: Only time will tell if sceptics are wrong on StartUp Loans

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The Independent Online

Elena Mingas is carrying a great deal of responsibility on her young shoulders. A 24-year-old dressmaker from Bury, Ms Mingas has just been named as the first beneficiary of the new StartUp Loans scheme, the initiative the Government launched in the Budget earlier this year to encourage entrepreneurialism among young people.

Under the terms of the scheme, Ms Mingas has been able to borrow £2,500 to get her dressmaking business, Tangle Dress Design, properly off the ground – the interest rate on the scheme is set at 3 percentage points above the RPI measure of inflation, though during an initial pilot stage, it will be fixed at 6 per cent.

However, Ms Mingas and her fellow borrowers will have to prove wrong those who have been sceptical about the scheme. Although the Government has made a lot of noise about StartUp Loans, pledging £82.5m to the scheme, it has guaranteed just £10m of funding so far , and will only make good on the rest of the cash if these early loans are judged to be successful.

There is no shortage of detractors. Some have criticised StartUp Loans because it will leave the 18-24 year-olds at whom it is aimed in debt.

That seems a little churlish – most young businesses have to borrow in their early days, if only to smooth out cashflow issues. Others warn that the whole thing smacks of gimmickry. And the appointment of James Caan as chairman of the scheme did rather play to that theme.

Mr Caan is best-know for his stint on the BBC's Dragons' Den and appears to be another example of the Government's obsession with appointing TV personalities to head up its never-ending rota of inquiries, commissions and think tanks.

Still, one has to give Mr Caan credit for the progress he has made with StartUp Loans so far. He's persuaded an impressive list of corporate partners to lend their support with valuable services for borrowers. Regus is offering free "virtual office" facilities, for example, while PayPal is cutting its transaction fees for six months. The mentoring service on offer alongside the loan finance is also set to be crucial.

Moreover, the delivery partners who will work at the sharp end of approving and administering loans are very experienced. They range from the Prince's Trust to Virgin, which has done some sterling work supporting young entrepreneurs. Many of these groups insist that would-be, small business leaders are often frustrated in their search for finance because lenders are put off by their age.

That was certainly the experience of Ms Mingas, who describes the frustration of being unable, until now, to get her business going.

"Most of my personal savings had been absorbed in the set up and rent deposit and I couldn't open with my bank balance on £0," she says. "I had previously applied to other funding providers but I had been unsuccessful time and time again."

Time will tell, of course, if those other providers' risk aversion was well-founded, though there are plenty of examples of entrepreneurs who have built successful businesses at a young age.

Still, if too many of these first ventures for StartUp Loans fail to establish themselves (and repay what they've borrowed), don't be surprised to see the Government quietly pull the plug.

Plus threat to former bosses over payoffs

It looks as if the fun isn't quite over at the junior stock exchange company Plus Markets, despite the bulk of the business now having been sold off over the summer following several months of wrangling.

The company's new board is now threatening to pursue two former directors for money they received for early termination of their contracts following the change of control.

Cyril Theret and Nemone Wynn-Evans, who respectively served as Plus's chief executive and finance director, received £423,000 between them under the terms of their contracts. The payments cost the company £481,500 after taking into account national insurance contributions.

The payouts rankled with many shareholders at the time of the deal, but were cleared when investors backed the sale of Plus's assets to the broker Icap and technology business Forum Trading – that suggests it will be tricky to challenge them retrospectively. Still, Plus says it is investigating whether any of the money can be clawed back. It says it wants to ensure that "an appropriate recovery of funds for the benefit of the company and its shareholders can be sought".

Sula Iron & Gold could be worth a punt on Aim debut

Watch out for Sula Iron & Gold, which makes its debut on the Alternative Investment Market tomorrow, having raised £1.15m from a placing.

The Sierra Leone-focused exploration company will have a market capitalisation of around £7m on admission to Aim.

The miner is some way off being ready to start production but does at least have some promising prospects. The area that it has a licence to explore is right next door to the Tonkolili iron mine owned by African Minerals, the largest mining company on Aim, and surveys suggests the iron in that resource extends into Sula's territory.

Early test results for gold look promising too.

Small business woman of the week: Melanie Bryan OBE, founder, WhyNotChange

I had a corporate career in management consultancy until 2008 when I was suddenly and unexpectedly made redundant.

I had a period of looking for similar jobs, but it was tough going and I decided to take some time to think about what I really wanted to do.

I started doing some volunteering, which was fantastic, and before I knew it I was being asked to advise charities on how to win public-sector contracts and funding.

That's how WhyNotChange started – we're a social enterprise working with charities, other social enterprises and small, local businesses.

I've won several awards, including my OBE for services to social enterprise, which is an honour, but I always feel I want to put them to some use.

So that's what I decided to do last year when I was named as Britain's Top Real Role Model.

I'm going to be a judge on this year's awards but I'm also really excited that the prize will be £10,000 to help the winner launch their own social enterprise project.

I'll be working with Amway UK, the awards' sponsor, to help the winner get this off the ground."

See for further details about this year's awards.