by business editor Trevor Sturgess

Budding Bransons are being encouraged to follow their business dreams with start-up loans worth up to £2,500.

Former Dragons Den panellist James Caan is chairing an £82 million scheme launched by the government today to help 18 to 24-year-olds set up on their own.

With youth unemployment exceeding a million, the StartUp Loans scheme will offer financial backing and advice for young entrepreneurs.

They will be expected to repay the loan - interest will be the retail prices index plus 3% - within five years.

Organisations such as The Prince's Trust and The Kent Foundation that help young people start a business are likely to be involved.

The Forum of Private Business is backing the plan with free credit control advice and discounted membership.

Senior policy adviser Phil McCabe said: "We think this new government initiative is a fantastic opportunity to get the young Richard Bransons and Mark Zuckerbergs of the UK to have a go.

"With bank lending still scarce, this initiative is a viable alternative for entrepreneurs who might be having problems accessing finance from a high street lender, or unaffordable. We need to see more young go-getters here in Britain bringing their ideas to market."

The scheme coincides with a report that cites the United States as a good example of business start-ups.

Report author Lord Young of Graffham, the former minister who devised the loans scheme, claimed that the UK would have 900,000 more businesses if it followed the US example.

Prime Minister David Cameron is backing the scheme. He said: "I want this year to be the year where people can think ‘Yes, I can do it’, that we can get as many viable businesses as possible off the ground, that people can have a go, and that we see a whole new wave of entrepreneurs who start small but think big."