Start Up Loan

Start Up Loans are government-backed personal loans of up to £25,000 for starting a new business or helping to grow an existing business. Every loan also comes with the option of 12 months of free mentoring from an experienced business adviser.

Over 55,000 business ideas supported with funding through the Start Up Loans Company since 2012

Key requirement

You’re either starting a new business or have been trading for less than two years

Key benefit

The loan is unsecured, so you don’t need to provide assets as security

Key consideration

This is a personal loan, which is used for business purposes, therefore you’re personally liable for repaying the full loan plus any interest.

What is a Start Up Loan?

A Start Up Loan is a personal loan designed to help new businesses get started. Start Up Loans were created to support would-be business owners that have struggled to secure finance from traditional lenders.

It differs from a small business loan from a bank because it is a personal loan for business purposes. The loan is also unsecured, which means you don’t have to use your house or any other asset as security to get the loan.

Start Up Loans are provided by The Start Up Loans Company, which is funded by the UK Government. Borrowers can access between £500 and £25,000, payable over one to five years, at a fixed interest rate of 6% per annum.

Start Up Loan applicants receive support completing their application from a dedicated business adviser, whilst recipients of the loan are entitled to 12 months of free mentoring.

Am I eligible to apply for a Start Up Loan

  • You are aged 18 or over
  • You are a UK resident
  • You are starting a new business, or your business is less than two years old
  • Your business is/will be based in the UK
  • You have the right to work in the UK

How do I apply for a Start Up Loan?

To apply for a Start Up Loan, you’ll need to complete an initial online application, after which you will be assigned a business adviser to help you complete the full application. You’ll then go through a personal credit check and will need to supply some of your business documents for assessment. These include a business plan and cashflow forecast.

If you are approved for a loan you will also be offered 12 months of free mentoring.

How Start Up Loans can help your business

Start Up Loans are government-backed personal loans for owners of start-up businesses or individuals looking to start a business.

 

The loan has a fixed interest rate of 6% per annum with one to five-year repayment terms. There are no application costs or early repayment fees, and you will receive support from a business adviser when filling out your application.

 

As well as your loan, if successful you will also receive free mentoring for 12 months.

 

You can apply for a Start Up Loan via the Start Up Loans Company website.

How long will it take to get a Start Up Loan?

How long it takes to get a Start Up Loan depends on your business and how prepared you are. If you are well prepared you could receive your loan within a month, however, for those who need more time to complete the application, it could take a lot longer.

Benefits of Start Up Loans

Unsecured loan

6% fixed interest rate per annum

Flexible repayment terms

Support during the application process

Free mentoring

Risks of Start Up Loans

Your credit rating

Start Up Loans are personal loans. A personal credit check will be carried out when you apply, which could impact your credit report. Similarly, if you default on payments, this could affect your credit report.

Charges

If you default on your loan payments there may be charges issued by the finance provider. You are personally liable for these charges, and this could also result in a County Court Judgment (CCJ) or your case being referred to an approved Debt Collection Agent.

How much money can I apply for?

You can apply for a Start Up Loan of between £500 to £25,000.

The loan is personal, rather than a business loan, so if there are partners in a business they can individually apply for a loan of up to £25,000. The maximum amount of lending for a single business is a total of £100,000.

Start Up Loans exclusions

Start Up Loans support most business types. However, there are certain types of business that are not eligible for a Start Up Loan, including property investment, banking and money transfer services and gambling. View the full list here.

Are Start Up Loans right for you?

About your business

Business stageYet to start or trading for less than two years
Annual turnoverAny
SectorsSome exclusions apply (see here)
RegionsAny

What's your next step?

Other finance options

Angel Investment
Equity
Angel Investors act as mentors and invest their own money in early-stage businesses for a share in the company.
Is this suitable for your business?
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Direct Lending Fund
Debt
A business borrows money from a fund and repays it with interest. A fund may be able to provide loans where a bank will not.
Is this suitable for your business?
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Invoice finance
Debt
Businesses sell or borrow against their unpaid invoices, giving them access to the money before the invoices are paid.
Is this suitable for your business?
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