News

British Business Bank Start Up Loans Programme Lends £500m to UK Small Businesses

  • The Start Up Loans programme lends more than 60,000 loans to fund small businesses since 2012

  • Almost 40% of loan recipients are women

  • 22% of loan recipients come from BAME backgrounds

  • North West has the highest number of loans outside of London

The British Business Bank’s Start Up Loans programme has lent £500 million to UK small businesses since it was set up in 2012, according to official figures published today.

New data from the Government-backed scheme shows it has issued a total of 63,920 loans to fund small business across the UK, with the average loan amounting to £7,823.

Of those who received a loan, almost two-fifths (39.3%) were women, one in five (22%) came from Black, Asian and Minority Ethnic communities (BAME), and more than a third (36.5%) were unemployed when they applied for the loan, reflecting the diversity of the UK start up community.

The Start Up Loans programme, part of the British Business Bank, has lent money and provided mentoring support to aspiring business owners in every part of the country and its impact has been particularly noticeable in areas of deprivation.

A Start Up Loans Heatmap, which goes live on Thursday 20 June, shows the regional breakdown of the £500m, and that the North West region was given the highest number of loans outside of London, receiving 7,841 loans worth £60 million. The South East follows with 5,680 loans worth £48 million followed by Yorkshire and The Humber with 5,377 loans worth £44 million. There were 3,879 loans in Scotland worth £29 million and 2,904 loans in Wales worth £26 million.

People supported by British Business Bank’s Start Up Loans have used the funding to set up businesses in a wide range of sectors. As well as finance, every loan recipient is offered a dedicated mentoring service and access to a free expert business mentor for 12 months to help them with every aspect of setting up a business.

They include a couple from Cumbria who opened Cut the Wrap!, a plastic-free supermarket; a father from Manchester who created Naturelly, a brand of healthy snacks for children; and a refugee who set up her own business making halloumi cheese in Yorkshire after fleeing Syria with her family.

Others include a woman in Scotland who set up Aberdeen’s first made-to-order grilled cheese sandwich shop after being made redundant twice in a year; a former marine biologist from North Shields who created an online business selling products made from seaweed; and a woman from Ulster who used the funding to turn a waste ground into a wildlife centre for children.

 Case study: Mitch’s Kitchen

The Start Up Loans programme passed the £500m milestone after awarding a £25k loan to Mitch’s Kitchen, an online shop which delivers home-cooked frozen meals which are 100% vegan and free from gluten, nuts, palm oil and pesticides. Launched last November by Mitch Lee, 29, and his wife, Shirin, 28, from Fareham, Hampshire, the business is hoping to challenge the stereotype of ready-meals with its range of dishes including buckwheat jambalaya, rainbow sushi bowl and chocolate chilli.

Mitch Lee, Co-founder of Mitch’s Kitchen, said:

“As a gluten-free vegan, I knew first-hand the challenges of finding healthy, delicious ready-meals. We’re absolutely delighted with how our meals have been received by our customers and we’re looking forward to expanding across the UK. We couldn’t have launched our business without the financial and mentoring support we received from Start Up Loans. Launching a business can be lonely and daunting, but we’ve felt supported every step of the way.”

Patrick Magee, Chief Commercial Officer of the British Business Bank, said:

“We’re absolutely delighted that we have supported so many fantastic small business owners from up and down the country. The hard work and determination of the UK’s 5.7 million small businesses make a huge contribution to society, and it’s great to see latest research showing that the economic benefits of the Start Up Loans programme are nearly six times its economic costs.

“We’re committed to helping small businesses prosper and grow and we look forward to supporting many more in the future.”

Kelly Tolhurst, Small Business Minister, said:

“This half a billion pound funding milestone is a great cause for celebration and a clear demonstration of our modern Industrial Strategy in action – supporting people to start and grow a business, creating good jobs and increasing the earning power of people throughout the UK.

“Small businesses are the backbone of our economy and I’m particularly pleased to see that so many women and entrepreneurs from black, Asian and ethnic minority backgrounds have benefited from this government-backed scheme. This record funding is backing the UK’s entrepreneurial spirit and enabling people across the country to follow their passions and start and grow a business.”

Breakdown of loans by region

RegionNo. of loansTotal value (£)
London14,931£118.0m
North West7,841£59.6m
South East5,680£47.6m
Yorkshire and The Humber5,377£44.3m
South West5,308£40.8m
West Midlands5,423£40.6m
East of England4,265£32.5m
Scotland3,879£28.7m
North East3,701£28.5m
Wales2,904£26.2m
East Midlands3,602£26.0m
Northern Ireland1,009£7.3m

Figures in this release are drawn from data on delivery of loans up to 15 May 2019, when the programme passed the £500m mark.

The Evaluation of Start Up Loans: Year 3 Report is available on the British Business Bank website.

ENDS

For more information, please contact:

Scott Shearer

Senior Communications Manager

07770 704761

scott.shearer@british-business-bank.co.uk

The British Business Bank team

MHP Communications

+44 20 3128 8589

bbb@mhpc.com.

Notes to editors

About Start Up Loans

Start Up Loans, part of the British Business Bank, was formed in June 2012. The Start Up Loans scheme provides personal loans for business purposes of up to £25,000 at a 6% fixed interest rate per annum and offers free dedicated mentoring and support to each business.

The primary aim of the Start Up Loans scheme is to ensure that viable start-ups and early-stage businesses have access to the finance and support they need in order to thrive. A network of Delivery Partner organisations support applicants in all regions and industries throughout the UK. The Start Up Loans scheme is not designed to generate a commercial profit. Capital payments together with the interest are recycled to help meet our customers’ increasing demand for finance.

Free guides on a range of subjects related to starting a business are available on the Start Up Loans website. You can find recent media coverage and press releases in the Start Up Loans Media Centre here.

The funding for the Start Up Loans scheme is provided by the Department for Business, Energy and Industrial Strategy (BEIS). The Start Up Loans Company is a subsidiary of the British Business Bank. British Business Bank plc is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such.

The British Business Bank makes finance markets for smaller businesses work better, enabling the sector to prosper, grow and build economic activity. Their Business Finance Guide explores finance options and the journey from start-up to growth. Access The Business Finance Guide.

Key Statistics

* Since 2012, The Start Up Loans scheme has delivered over 63,000 loans, providing more than £500m of funding.

* In the financial year 2018/19, the scheme provided 7,871 loans with a total value of approximately £83m – helping to support around 22 businesses every day of the year

* Since 2012, 36% of loan recipients were formerly unemployed or economically inactive

* 16% of loan recipients were aged between 18 and 24

* the 2014 cohort (of 11,000 loans drawn down over November 2013-December 2014) will generate a net Gross Value Add (GVA) of £169m by 2019/20; and the 2016 cohort (the c.3,450 loans drawn down over January-June 2016) will generate a net GVA of £85m by 2021/22.

* Loan recipients report estimated average turnover of £42,000 in the first year after they have drawn their loan down.

* In the November Budget 2018, the Chancellor announced that the programme would be extended, with a target of 10,000 additional loans being issued in the year to April 2021

For more information about Start Up Loans, please visit: https://www.startuploans.co.uk/

All of these statistics are gross estimates, with the exception of the return on investment numbers, and are based upon Start Up Loans CRM and externally commissioned research undertaken by SQW Ltd, with support from BMG Research.