A Start Up Loan is a government-backed personal loan available to individuals looking to start or grow a business in the UK. You borrow £500 to £25,000 over 1–5 years at a fixed rate of 6% per annum.
The scheme lends to applicants who are 18 years or older at the time of application. Individuals can receive one loan per business, however more than one partner in a business can apply for a Start Up Loan with a maximum of £100,000 available per business.
Start Up Loans, administered by the British Business Bank, is a government backed scheme, providing low-interest repayable loans and free business support.
Business Enterprise Fund is a national delivery partner for the Start Up Loans scheme.
To be eligible to apply for a Start Up Loan, you must fit the following criteria:
No. A grant is a non-repayable fund provided by an individual or an organisation for a particular purpose, whereas a Start Up Loan must be repaid in full over an agreed term of one to five years. Apply for a Start Up loan.
There are three main areas that your Business Adviser will consider when they’re reviewing your Start Up Loan application: your credit worthiness, whether or not you can afford to take on the loan and whether your business is viable.
Credit worthiness: As part of your application, you will be required to have a credit check that reviews your past and current financial behaviour. While a poor credit history will not prevent you from securing a Start Up Loan in all instances, this part of the application process is part of our commitment to responsible lending and helps us ensure our applicants don’t overburden themselves.
Personal affordability: As Start Up Loans are personal loans used for business purposes, you will be liable for repaying your loan even if your business plans change in the future. While Start Up Loans are non-secured (you do not have to put forward any collateral to guarantee the loan) you will need to fully repay the loan and any interest due over the course of your agreed loan term. The Personal Survival Budget that you must submit with your application, which outlines your key sources of personal income and any expenses you incur each month, supports us in making this assessment.
Business viability: A key factor in our lending decision is ensuring that your business is going to generate enough money to help you meet your monthly loan repayments. To help us assess this, you therefore need to demonstrate that there is sufficient demand for your product(s) and/or service(s) and that you will be able to reasonably achieve all of the goals set out in your Business Plan and Cash Flow Forecast.
No, there are no fees involved in either applying for or receiving a Start Up Loan, and no fees for the support we provide during and after the application process. Other than your monthly loan repayments, you will never be asked for any fees or other payments.
Yes, you can choose a loan term between one and five years depending on your affordability and preference. Please note, if you are in the UK on a visa, you will need to repay your loan and all associated interest at least six months prior to your visa expiry date. Regardless of your final agreed loan term, you will be required to make monthly repayments.
Start Up Loans are personal loans that are used to start a new business or grow an existing business that has been trading for less than 24 months. Your loan can be spent on a wide range of things related to your business, like equipment and stock, a premises, marketing and promotional expenses to name just a few. It’s important to note however that you must be able to describe your intentions for your loan within your business plan and cash flow forecast and explain how this will help you start and/or grow your business.
There are a few activities that cannot be funded with a Start Up Loan, including debt repayment, training qualification and education programmes or investment opportunities that do not form part of an on-going sustainable business.
Every individual can only apply for a Start Up Loan for one business, so if you own multiple business ventures you will only be able to access finance for one of them. However, if after successfully securing a Start Up Loan you later require additional funding in order to grow and develop that same business, you may be eligible to apply for a Second Loan. You would need to go through a new application process and must have made at least six months of full loan repayments prior to applying. In addition, your total outstanding loan balance cannot exceed £25,000 at any one time.
A Start Up Loan is an unsecured personal loan for business purposes issued to an individual applicant. The applicant remains solely responsible for the repayment of the loan, even if their business fails.
If you fail to make a payment, Start Up Loans’ finance partner will contact you to determine why you missed the payment and work with you to come to a reasonable and fair agreement about how you’ll address it.
The Finance Partner will also report this to credit reference agencies, which may affect your credit rating.
Finance available for up to 100% of the funding need. Repayments on all our loans are unaffected by interest rate changes.
Impersonal letters and automated telephone services are not our style, all clients are connected with a member of our team.
Each client is recognised as an individual and their business is assessed in the same way.
Loans available to all sectors that are designed to meet the needs of each client.
Interest-only periods available by negotiation.
Following a quick eligibility check, you will be asked to register your personal details, complete a credit check, and submit your business information and supporting documents. Once completed, one of our Investment Managers will review your application.
Need help with your application? Contact our Investment Management teamApply Now
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