Bradford is leading the way in government attempts to turn benefit claimants into entrepreneurs who set up their own businesses.

Around 120 people in the city have taken out ‘Dragon’s Den-style’ loans to enable them to come off the dole and put a business plan into action.

The best ideas receive loans of around £2,000 – which can be repaid over five years at a low rate of interest – as well as guidance and mentoring support.

The 120 entrepreneurs who have signed up in Bradford is more than in most towns and cities across England, where the total is normally in two figures.

In Calderdale, 40 loans have been taken out under the New Enterprise Allowance scheme, with 80 arranged in Kirklees and 130 across Leeds.

Among them is Nathan Kent, 24, from Laycock, who has put long-term unemployment behind him to set up his own drystone walling business.

He praised the scheme, which was launched two years ago, as “fantastic”, adding: “It gave me the confidence needed to make it happen.”

Prime Minister David Cameron has hailed the scheme as crucial if Britain is to “compete on the global stage” by tapping into people’s entrepreneurial spirit.

He said last year: “I am determined to get behind people who have ideas that will work and a can-do attitude that will turn those ideas into successful enterprises. It doesn't matter what your background is, or whether you are out of work. If you are prepared to work hard and aspire to achieve more, this Government – through schemes like the enterprise allowance – will back you.”

The scheme was criticised after getting off to a slow start, with some pouring scorn on the target to create 40,000 new businesses by 2015. But the department for work and pensions (DWP) said 15,210 loans had been taken out across England by last November – a doubling of the total within six months.

More mentors have been signed up to provide step-by-step guidance to would-be entrepreneurs and remove delays in getting businesses started.

People can now get business advice from the moment they become unemployed, rather than having to wait at least six months, the rule when the scheme started.

Its chairman is James Caan, a former Dragon in the BBC show, who said: “It is only with this renewed focus on youth entrepreneurship that we will create more jobs and wealth and see the economy flourish once again.”

Case Study: Nathan Kent is a former Leeds College of Music student, with a creative spirit and a love of the outdoors, who was stuck on the jobless list.

Then the 24-year-old was referred to Airedale Enterprise Services, which runs the New Enterprise Allowance scheme in Keighley and Shipley. A few months later, Nathan, with a loan in his pocket, has set up Valley Dale Dry Stone Walling, in Laycock, and has carried out his first few jobs.

Nathan said: “It was tough being unemployed and looking for jobs. In the end, I decided to set up my own business and that’s when I heard about this scheme. The team at Airedale Enterprise Services have been fantastic. They helped me to put together a business plan, referred me to the Princes Trust and also gave me the confidence needed to make it happen.

“I’ve never done a business plan before and, looking online, I got even more confused. It was great having them to help me every step of the way and I can still contact them for help, support and advice.”