Start up loans frequently asked questions

Whether you're just starting to shape your business idea or you're looking to grow your start-up, securing a Start Up Loan can help you flourish while contributing to the prosperity and resilience of your local community.

Key Features:

• For: Businesses trading less than 36 months.
• Loan amount: Borrow up to £25,000 (BEF average loan size = £11,000).
• Interest rates: 6% fixed. Take advantage of a low interest rate to help start or grow your business.
• Repayment terms: Enjoy flexible repayment options spanning 1 to 5 years.
• One Business, Four Loans: Up to four partners or directors can each apply for a Start-Up Loan for the same business.
• Additional benefits: Take advantage of no arrangement fees, no early repayment fees, and up to 12 months of complimentary post-loan mentoring

A Start Up Loan is here to help your start-up grow, but we get that every business is different. You can generally use the loan for things like day-to-day costs, premises, equipment, stock, marketing, bringing on new team members, or other ways to build your business.

We suggest explaining how you plan to use the money in your application, so it matches up with what the loan is meant for.

Each individual can borrow between £500 and £25,000 at any one time. Please note if multiple business partners are each applying for a loan for the same business, a maximum of £100,000 may be lent that that business in its lifetime which may impact upon the amount you are personally able to borrow.

Additionally, if you successfully apply for a Start Up Loan then after you have made six full repayments you may be eligible to apply for additional finance for the same business in the form of a Second Loan. Find out more about Second Loans.

To be eligible to apply for a Start Up Loan, you must fit the following criteria:

• You’re 18 years of age or older
• You’re a current UK resident
• You’re starting a new business or have been trading for up to 36 months
• You’re unable to secure finance from other sources (self-declaration is ok)
• Your business is based in the UK
• You have the right to work in the UK
• Your business type and loan purpose is eligible under terms of the scheme
• You pass the Start Up Loan Company credit checks and you can afford to repay the loan

Yes, that's what the Start Up Loans programme provides. The government-backed, low interest loan is an excellent option for anyone who wants to start or grow a business that has traded for less than 36 months.

No, Start Up Loans are not hard to get thanks to a simple process:

1. Online Application Submission
2. Credit Check and Initial Review
3. Business Plan and Document Assessment
4. Interview
5. Decision and Loan Offer
6. Acceptance and Funding

Usually, our team of Investment Managers will help you finish everything up within six weeks after you apply.

More often than not, start-up businesses are unable to access finance from high street lenders due to their location, lack of networking opportunities, or previous financial disparities. A Start Up Loan levels the playing field to provide the access to finance and support that young business owners need.

We look at every application carefully, considering more than just your credit history. Even if your credit isn't perfect, it doesn't mean you're out of the running.

We are committed to lending responsibly and has to ensure that applicants will be able to repay the loan.

You cannot receive a Start Up Loan if:

• You are filing for or currently bankrupt or on a Debt Relief Order (DRO)
• You have an outstanding Individual Voluntary Agreement (IVA) or Trust Deed
• You are on Debt Management Programs or Debt Arrangement Schemes (DAS)

We suggest talking with an Investment Manager about your particular case to figure out the best way to move forward.

Typically, a Start Up Loan is the easiest first time loan to secure. The government-backed scheme is a great alternative for people looking for a business loan to fund a start-up.

A Start Up Loan offers a comprehensive package that includes a low interest rate (6%), free free application and early repayment, and 12 months post-loan support. That means it compares well to alternative loan products from BEF and other lenders.

The Start Up Loans programme supports business owners from diverse backgrounds. Since its launch in 2012, the programme delivered:

• 40% of loans to women business owners
• 20% of loans to ethnic minority business owners
• 14% of loans to business owners aged 18-24
• 12% of loans to business owners aged 50+
• 26% of loans to applicants who were unemployed before applying