The North East has seen 5,600 new business startups since September 2011 to September 2015 thanks to the New Enterprise Allowance (NEA).
Figures released by the Department of Work and Pensions (DWP) have also revealed there were 10,140 new mentor starts as a result of the allowance.
A majority of the entrepreneurial jobseekers are still in business, more than a year after launching their start-up.
The New Enterprise Allowance survey, of 1,500 participants of the NEA, shows that 80% of ventures are still trading.
Fifty-five per cent of respondents reported an expansion in their customer base, while 47 per cent reported an increase in turnover since starting their business.
Many of the surveyed participants have plans to grow their company in the coming years.
Employment Minister Priti Patel, said: “This government is determined to help jobseekers with real entrepreneurial ambitions turn their ideas into successful business ventures which create new jobs, boost productivity and contribute to long-term economic growth.
“The first year of trading is considered the most challenging, so I’m delighted that through our New Enterprise Allowance and added support services we are helping businesses stay on track and grow twelve months in.”
The survey also found that NEA recipients started businesses in a wide range of sectors including retail, car repair, construction and professional services.
The NEA initiative is delivered through Jobcentre Plus and offers expert mentoring and financial support to jobseekers, lone parents and people on sickness benefits who have a good idea to set up their own business.
The respondents of the survey highlighted that the payment of the NEA weekly allowance was a critical factor in enabling them to start their business.
The New Enterprise Allowance offers eligible jobseekers mentoring and business support to develop a business plan before they start trading. Once a business plan is approved and trading starts, on-going support is available from providers for a period of six months.
Financial assistance is offered in the form of an NEA weekly allowance, administered by Jobcentres, to claimants who have had their business plan approved and start working at their business for 16 hours or more a week.