Start Up Loans

Personal loans for new businesses to begin trading, for owners unable to borrow from traditional lenders.

Start Up Loans are personal loans designed to help new businesses begin trading. They were created to support would-be business owners who have struggled to secure finance from traditional lenders.

They differ from small-business bank loans in that they are personal loans for business purposes. They are also unsecured, which means you don’t have to use your house or any other asset as security to receive the money.

Start Up Loans are provided by the Start Up Loans CompanyLink opens in a new window, which is funded by the UK Government. You can borrow between £500 and £25,000, payable over one to five years, at a fixed interest rate of 6% per annum.

When you apply, you’re paired with a dedicated business adviser, who supports you with completing your application form. If your application is successful, your loan comes with the option of 12 months of free mentoringLink opens in a new window.

To qualify for a Start Up Loan, you must meet the following criteria:

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

This depends on your business and how prepared you are. If you’re well prepared, you could receive your loan within a month. If you need more time to complete your application, it could take a lot longer.

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

The loan is personal, rather than a business loan. Consequently, if there are partners in your business, you can each apply for a loan of up to £25,000. The maximum amount a single business can receive is £100,000.

  • The loan is unsecured
  • Fixed interest rate of 6% per annum
  • Flexible repayment terms
  • Support during the application process
  • Free one-to-one mentoring for 12 months

Your credit rating

Start Up Loans are personal loans. The Start Up Loans Company will carry out a personal credit check when you apply, which could have an impact on your credit report. Similarly, if you fail to make your repayments (known as 'defaulting'), this could affect your credit report too.

Possible charges

If you default on your loan payments, the finance provider may issue charges. You are personally liable for these charges. This could also result in you being given a county court judgment (CCJ) or your case being referred to an approved debt collection agent.

Start Up Loans support most types of business. However, certain types of business are not eligible, including those that involve:

  • property investment
  • banking and money transfer services
  • gambling

View the full list of excluded businessesLink opens in a new window

You submit an initial application online. Then you’re assigned a business adviser to help you complete the full application.

The Start Up Loans Company will carry out a personal credit check, for which you’ll need to supply some of your business documents for assessment. These include a business plan and cashflow forecast.

If you’re approved for a loan, you’ll also be offered 12 months of free mentoring.

You can apply via the Start Up Loans Company websiteLink opens in a new window.

Other finance options

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Purpose of financessss Working capital, product development, entry into new markets, build teams, increase sales
Amount of finance Usually £15k-£500k, but large Syndicates may offer up to £2m
Duration of finance Typically 3-8 years
Cost of finance None
Time of finance 2-6 months
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Business stage Generally early stage, pre-revenue or pre-profit
Annual turnover Less than £5m
Sectors All sectors, but especially suitable for companies with a scalable business proposition
Regions All regions
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Mature, growing and profitable business with an annual turnover typically between £10m and £100m.

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Private Equity firms invest in established businesses in return for a large or controlling stake, to help them grow to the next level.
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Purpose of financessss Change in shareholder ownership, management buy-outs, acquisition, product development, entry into new markets
Amount of finance £10m-£50m
Duration of finance 3-5 years
Cost of finance Monitoring and director fees; loan note interest
Time of finance Minimum of 3 months but can take up to a year
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Business stage Mature and growing; profitable
Annual turnover £10m-£100m
Sectors All sectors
Regions All
Click here to visit Export Finance
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Businesses can get guarantees and protection against late and non-payment by their customers to reduce risk of selling overseas and help fulfil their contracts.

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Looking for finance to help you sell your product or service overseas.

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Grow your customer base internationally and need finance to enable you to do so.

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Business stage Established with assets and a trading history
Annual turnover Any
Sectors Any
Regions Any

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