For all the latest information and goings on sign up to our newsletter.
What is a Start Up Loan?
A Start Up Loan is a loan to help you start your business. The loan is a personal loan given for business purposes. Your loan application will be considered according to the needs of your business.
What is a mentor?
A mentor is an individual with business experience who will provide support and guidance to help make your business a success.
What makes a successful mentor?
The ability to provide advice and guidance along with the desire to support the next generation of entrepreneurs.
How do I become a mentor?
If you would like to become a mentor, please fill out the application form. The appropriate Delivery Partner in your region will then contact you to explain the next steps.
Who is eligible for a Start Up Loan?
Anybody living in England, Northern Ireland and Wales at least 18 years of age, at the time of application can apply for a Start Up Loan. You may have already started your business, but you must not have been trading for longer than a period of 12 months. You must have the legal right to remain in England, Northern Ireland or Wales for the duration of your loan term and the right to be self-employed.
I am an international student living in England aged between can I apply?
If you have a Tier 4 Visa, then you are NOT eligible to apply for a Start Up Loan, as self-employment is excluded. If you are able to secure a Tier 1 Graduate Entrepreneur Visa, then you may be eligible to apply.
Do I lose my Job Seekers Allowance if I receive a Start Up Loan?
Yes – this is most likely.
Can I apply for a Start Up Loan if I have been declared bankrupt?
Applicants for a Start Up Loan must not have been or currently be declared bankrupt and/or have any outstanding IVA’s.
What is the difference between a loan from the New Enterprise Allowance (NEA) and a Start Up Loan?
The NEA scheme is separate to the Start Up Loans Programme, and the associated loans have different terms. The NEA referred loan is part of a package of support aimed at helping people on benefits in England, Wales and Scotland to start their own business. You can only apply for an NEA referred loan if you have been on the NEA scheme and had your business plan approved. The loan terms for those entering the scheme on or after 1st October 2013 have changed: the loan is now capped at £2,500, has a 6% nominal interest rate and is paid back over three years.
As of 1st October 2013, the Start Up Loans Company manages the delivery of loans referred through NEA. The Department for Work & Pensions (DWP) will continue to oversee the mentoring and support function of the scheme. Individuals interested in joining the NEA scheme must go through DWP. Further information on how to apply can be found on the DWP website http://www.dwp.gov.uk/adviser/updates/new-enterprise-allowance/ or through your local Jobcentre Plus office.
Can I receive a Start Up Loan if I have an NEA referred loan?
The NEA scheme and the Start Up Loans programme are mutually exclusive packages of support offered by government to help people set themselves up in their own business. The individual elements of those packages are not interchangeable.
Individuals cannot have an NEA referred loan and a Start Up Loan concurrently. If you take an NEA referred loan, you may later be able to apply for a Start Up Loan when your business is ready for more funding. In this instance you must: demonstrate the business case for further funding; go through the full Start Up Loans programme; not currently be in arrears; not have been trading for more than 12 months; and use the Start Up Loan to immediately pay off your NEA referred loan.
Is this a grant?
No. A grant is a non-repayable fund provided by an individual or an organisation for a particular purpose. Grants are often awarded to non-profit entities, as well as businesses or individuals. The process for applying for a grant for a specific business will almost always include some level of compliance and reporting, which will then be assessed for eligibility by the grant maker. You can apply for a grant from the government, the European Union, local councils and charities. Generally will not need to pay a grant back, but there is a lot of competition and they are almost always awarded for a specific purpose or project.
The difference between a grant and a Start Up Loan is a Start Up Loan must be repaid.
What is a grant?
A grant is a non-repayable fund provided by an organisation, for a particular purpose. Grants are often awarded to non-profit entities, as well as businesses or individuals. The process for applying for a grant for a specific business will almost always include some level of compliance and reporting, which will then be assessed for eligibility by the grant maker. You can apply for a grant from the government, the European Union, local councils and charities. You won’t need to pay a grant back, but there’s a lot of competition and they are almost always awarded for a specific purpose or project.
What is the difference between a grant and a Start Up Loan?
A grant is a fund that does not require repayment, whereas a Start Up Loan must be paid back with 6% annual interest.
What is the application process?
Fill out the application form on the website, and your application will be sent to the most appropriate Delivery Partner. On receipt of your application, you will be contacted within 4 working days by one of our Delivery Partners. Your Delivery Partner will explain the next steps for you to progress with your application.
What is a Delivery Partner?
The Start Up Loans Company has appointed over 55 Delivery Partners, covering all regions in England, Northern Ireland and Wales to deliver the programme. These Delivery Partners are organisations who are actively engaged with people, specifically within the business arena. They have the infrastructure necessary to help administer loans across all industry sectors and regions.
Who will be deciding who gets the loans?
The Start Up Loans Company provides criteria to every Delivery Partner to ensure a consistent approach is followed. However the Delivery Partner will ultimately base their decision on the individual and the business plan.
How much can I borrow?
The Start Up Loans Company lends on the basis of need. The average loan size is £5,400, but the final amount will be determined by your business plan.
What is the interest rate?
It is currently set at a fixed rate of interest – 6% nominal.
What is the repayment period for a Start Up Loan?
You are required to pay back the loan within 1-5 years. The exact term will be agreed with your Delivery Partner as part of your application process. Capital repayment holidays are available, but interest must be covered monthly throughout the loan term.
What happens to the interest you pay?
The interest received is recycled back into the programme to allow us to support more entrepreneurs.
Do I need a business bank account to receive this loan?
No. A Start Up Loan is a personal loan, so a personal bank account is fine.
What happens once I have the loan?
Once you have a loan, you will be offered on-going business support from your Delivery Partner as well as access to useful products and services provided by our Corporate Partners.
What is a Referral Partner?
Many organisations have well developed communications channels already targeting entrepreneur. We want to tap into this resource by joining forces with referral partners. In effect you host a micro site on your website directing traffic to our application form, which is fully traceable. We will reward you for every person who starts up a business via this route.
I have applied for a Start Up Loan, but have not heard anything?
If you have not been contacted within 4 working days, please email email@example.com and we will do our best to help you.
Can I only have one Start Up Loan?
Yes, individuals can only receive one loan from one Delivery Partner. This allows us to support the maximum number of people to start their own business. If you are starting a business with others who are eligible to apply for a Start Up Loan, you can all submit applications for the same business.
Will Start Up Loans be available for those over 30?
The Start Up Loans Company welcomed Lord Young’s recommendation to remove the age cap for eligibility in May. On the 5 June the Prime Minister announced the lifting of the age cap with Ex-forces personnel becoming first eligible group. The Start Up Loans Company has been working to establish an effective delivery framework and the Department for Business Innovation & Skills (BIS) has authorised 30+ lending and the first loans are now rolling out.
Why are Start Up Loans not available outside England, Northern Ireland and Wales?
We are currently unable to offer Start Up Loans outside England, Northern Ireland and Wales as enterprise is a devolved issue.
Do Start Up Loans have a Sharia compliant offer?
We are working with Islamic finance experts to create a Sharia compliant offer. Those wishing to apply for a Sharia compliant loan can do so here.