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What is a Start Up Loan?

Bring your plans to life with a Start Up Loan of between £500 and £25,000 with a fixed interest rate of 6% per annum.

Personal loan for business purposes

A Start Up Loan is a government-backed personal loan available to individuals looking to start or grow a business in the UK.

In addition to finance, successful applicants receive 12 months of free mentoring and exclusive business offers to help them succeed.

The loan is unsecured, so there’s no need to put forward any assets or guarantors to support an application.

All owners or partners in a business can individually apply for up to £25,000 each, with a maximum of £100,000 available per business.

  • Borrow £500 – £25,000
    (The average loan amount is £9,295)
  • Fixed interest rate of 6% p.a.
  • 1 – 5 year loan repayment term
  • Free application support
  • Free post-loan support and mentoring
  • Free templates & guides
  • No application or set-up fees

We will provide free templates and can personally help you create your Business Plan, Cash Flow Forecast and Personal Survival Budget to submit with your application.

If approved, you will be paired with a mentor for 12-months of free mentoring.

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Frequently asked questions

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.

Start Up Loans are government funded and therefore would class as State Aid.

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. Don’t worry if you have never created these documents before! Check out our free templates and guides and remember that your Business Adviser will be able to provide support throughout this part of the process.

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. Use our Loan Calculator to figure out what your potential monthly and total loan repayments would be based on different loan terms.

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 36 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. Please see our full eligibility criteria for more information on excluded business types and loan uses under the scheme.

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. Please visit our page about Second Loans for more information on the full eligibility criteria and how to apply.

Mentoring was a brilliant element to the loan itself. Having a mentor through the start up process really helped. Shortcuts Children's Salon

Mentoring

For us, supporting start up businesses is about more than just offering affordable finance. We believe that support and guidance is just as important and that’s why we offer all of our Start Up Loan recipients 12 months of free business mentoring.

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Need more information?

Not sure you’re ready to apply for a Start Up Loan? Check out our handy links below explaining the types of loans available.

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Second Loans

If you've already secured a Start Up Loan for your business and have been trading for no more than five years, you may be eligible to apply for a Second Loan for that same business.

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