If you thought that starting a new business is a young person’s game then think again! Since the Millennium there has been a gradual growth in self-employment. There were 4.6m self-employed people in the UK at the end of 2015. Part time self-employment grew by 88% between 2001 and 2015 and full-time employment by 25% in the same time period.
But not only has the trend for self-employment grown, the age profile has also got markedly older in recent years. The over-50s account now for 43% of those who start their own businesses - as compared with less than a third of employees being over 50. Interestingly, the number of self-employed people aged 65 and over has also more than doubled in the past five years and almost 60% of those still in work at the age of 70 are self-employed. The era of the oldtrepreneur is upon us!
It is apparent that many over-50s who are finding it difficult to obtain full-time work have now decided to set up on their own. Many of these new businesses are in the finance and business services industry, and many are concentrated in the South East and London. In particular, full-time self-employed workers are more concentrated in the capital.
The good news for anyone considering starting out again is that businesses set up by the over-50s have a statistically better chance of still trading five years later than those established by younger age groups.nBut there is a thorny issue that oldtrepreneurs need to overcome: whilst they may have the wisdom and knowledge to embark upon a second career and do something that they always wanted to do, what help is available if they do not have the financial resources to do so? Are there business loans in London available to older people? What other financial options are available?
Some of the main ways that oldtrepreneurs have been funding new businesses to date are:
1 Pension You could either using a lump sum from your pension to fund a start-up business or borrow against through an SSAS (small self-administered schemes) structure via a loan-back arrangement that has been available since 1979.
2 Become a buy-to-let landlord If you do have a lump sum available then purchasing a property for rental yield could be a good way of bringing in some income whilst releasing you to do what you really want to do.
3 Set up a franchise business Buying a franchise has the advantage of offering a ready-made route to setting up a business and follow a proven successful business model.
4 Alternative finance Many oldtrepreneurs have obtained funding via peer-to-peer lending platforms such as Funding Options or crowdfunding websites.
5 The government A government-backed Start Up Loan is a personal loan that can provide £500-£25,000 for individuals looking to start or grow a business in the UK.
6 Make use of online auction sites With the prevalence of online auction sites it is possible for anyone to start up a retail operation from the comfort of their own home. A recent survey by Aldermore Group found that 56% of over-55s already generate some extra income via internet sales sites and much of this could potentially be converted into a business opportunity if needed.
So there are lots of potential ways of getting a business up and running and finding the necessary funds to do so. But the story does not end there! As we saw above, businesses run by the over 50’s have a good chance of surviving beyond the first five years. At Fair Business Loans we specialise in offering business loans in London and beyond to help young businesses grow further. When we say “young businesses” we mean those that have been in existence for a couple of years - not just businesses run by young people! At Fair Business Loans we will support any business on its merit: the age of the owner is immaterial.
Take a look at our Case Studies page to see the range of people and businesses that we have helped over the years. Then why not get in touch with us today to see how Fair Business Loans can help the cause of the oldtrepreneur march forward to victory!