About the Start Up Loan
- 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.
- 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 the application process?
Fill out the registration form on the website, and your details will be sent to the most appropriate Delivery Partner. On receipt of your registration, you will be contacted within 3 working days by one of our Delivery Partners. Your Delivery Partner will explain the next steps for you to progress with your application.
- Will I be charged for my application?
- Do you conduct credit checks?
As part of your application, a credit reference agency check will be carried out to make a decision about products and services we can offer through our partners. Any credit reference check carried out will leave a footprint on your file which may be seen by other lenders. Whilst a low credit score will not necessarily prevent you from being eligible for a loan it is at the Delivery Partner’s discretion as to whether they feel they can lend.Your consent will always be obtained before conducting a credit reference check.
- 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 up to a maximum of £25,000. Our average loan size is £6,000, 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. 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.
- I have applied for a Start Up Loan, but have not heard anything?
If you have not been contacted within 3 working days, please email email@example.com and we will do our best to help you.
- Can I only have one Start Up Loan?
We offer second Start Up Loans to help businesses grow and develop, however, your total outstanding debt on the Start Up Loans scheme cannot exceed £25,000 at any one time. To check your eligibility for a second Start Up Loan, please call our Client Services team on 020 3418 0890 for a short discussion about your business. Lines are open Monday to Friday from 9.30am – 5.30pm.
- Would applying for a Start Up Loan affect my state benefit entitlement?
The Start Up Loans Company cannot give you advice on state benefit entitlement. Please talk to your Job Centre Plus for information.
- Who is eligible to apply for a Start Up Loan?
Anybody living in the UK, and at least 18 years of age at the time of registration, 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 24 months. You must have the legal right to remain in the UK for the duration of your loan term and the right to be self-employed.
- 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.
- I am an international student living in England aged over 18 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 have a Tier 1 (Graduate Entrepreneur) Visa you are NOT eligible for a Start Up Loan as the length of your visa does not fit our minimum loan term criteria.
- What is a mentor?
A mentor is an individual with business experience who will provide you with support and guidance to help make your business a success. You may be introduced to your mentor before or after you receive your Start Up Loan. Find out more information about the Start Up Loans mentoring programme.
- What happens once I have the loan?
Once you receive your Start Up Loan, you will be offered a mentor. You are entitled to 15 hours of free mentoring across 12 months. As well as a mentor, you can access exclusive business offers to help reduce the cost of running a business.
- What makes a successful mentor?
The ability to provide guidance, along with the desire to support the next generation of entrepreneurs. A good mentor will not tell you how to run your business; instead they will assist you in learning how to make plans and strategies that will enable you to make the right decisions for your business.
- How much support can I request from my mentor?
At a minimum, you are entitled to 15 hours of free mentoring across 12 months, however it is up to you to agree with your mentor if they are contactable outside of meetings. Each Delivery Partner structures mentoring in a slightly different way, and some mentors can provide additional forms of support. You will be provided with these details during your application for a Start Up Loan.
- Do I continue to receive support if I go into default?
Yes. If an individual goes into default they can seek support from the Delivery Partner that approved their loan, or from their mentor. However, it is not the mentor’s responsibility to ensure that you keep up with your Start Up Loan repayments, and irrespective of the circumstances of your mentoring relationship, you are still responsible for paying back a Start Up Loan according to the agreed repayment plan that will be discussed during the application process.
Managing Your Loan
- 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 as part of your application process.
- What happens if I default on the loan?
A Start Up Loan is a personal loan and therefore still remains payable in the event a business ceases trading. In general all loan providers follow standard market practice when loan repayments are missed and take a fair and reasonable approach. When a loan recipient fails to make a payment, contact is attempted to try and determine the reasons for the payment being missed. This is then followed up by an email and or letter stating that a repayment(s) has been missed and what they should do to remedy the situation. If a loan recipient is having difficulty in meeting their loan obligations they should inform their loan provider as soon as possible. The loan provider will then try and work with the loan recipient to come to a reasonable and fair outcome to ensure they continue to meet their loan obligations. If a loan recipient fails to respond to attempts to contact them with respect to their missed loan repayments, a loan provider may then look to recover the outstanding payments through various means such as, but not limited to, issuing a CCJ or they may be referred to an approved Debt Collection Agent.
Loan Provider: If you are unsure who your loan provider is, the company and details are provided on the loan agreement that you signed prior to drawdown of the funds
- What type of finance is provided under the Start Up Loans scheme?
Finance is provided by way of a personal loan which is regulated under the Consumer Credit Act 1974. This means, the loan is taken out in your name and not the name of your venture.The loan is repayable on a monthly basis for the duration of the term of the loan. The finance provided to you is not a grant.
- Did The Start Up Loans Company provide my loan to me directly?
The Start Up Loans Company does not directly provide loans to applicants. Your Start Up Loan was provided by one of our Delivery Partners or Finance Partners listed below:
- Do I still need to repay the loan if my business ceases trading?
A Start Up Loan is a personal loan and therefore you will still remain liable for all required loan repayments as per the agreement you signed.
- What should I do if I am unable to meet the required loan repayments?
You should contact your loan provider immediately and let them know your situation. It is always best that you speak to your provider if you believe you may not be able to make your next repayment rather than wait until the payment is missed.
- I have received a Notice of Default directly from one of your Delivery/Finance Partners I received my loan from. What should I do?
It is important that you respond to any notices of missed payments from your loan provider as soon as possible. The notice will provide the contact details you can use.
- I’ve received correspondence from one of the below companies. What should I do?
Please contact them immediately using the details they provided to you. They will be dealing with your loan, until further notice is provided to you, by helping you arrange to make regular repayments or signpost you to relevant external advice.
Please note that ordinarily the Start Up Loans Company or our partner organisations will be unable to comment further about your loan when the above company intervenes.
- What happens if I do not respond to notices of missed payments or fail to keep up with my repayments?
It is important that you respond to any notices that you receive and keep up to date with your loan repayments. Like any regulated consumer finance product, not meeting required loan repayments may result in one or more of the below actions against you:
- Credit Reference Agencies notified of any outstanding amounts, which may affect your credit rating and ability to obtain goods, services or particular forms of employment.
- Intervention by third-party collection agencies to help recover any outstanding amounts.
- Legal proceedings including, but not limited to, a County Court Judgement.
- I think I’m experiencing financial difficulty and need help managing finances. What can I do?
The first thing to do is not worry because there’re plenty of free and impartial debt advice organisations willing to help. The Start Up Loans Company works closely with a major debt charity, Money Advice Trust, who operate the following services:National Debtline – Their debt advice experts are committed to improving situations. They’ve already helped millions of people deal with their debts.
Business Debtline – A unique service to help the self-employed and small businesses deal with their debts.
Other sources of free and impartial debt advice are set out below:
While Delivery Partners are able to help you in relation to your Start Up loan, they cannot provide independent debt advice. This should be sought from the above organisations.
*Please note: The Start Up Loans Company does not endorse any debt management companies who charge fees for debt advice or debt management payment plans. Please notify us immediately (firstname.lastname@example.org) if you’ve approached or been approached by any such company.
- Can my mentor provide debt advice?
No. Please note that your mentor is there to provide general guidance and not specific advice such as debt counselling.
New Enterprise Allowance (NEA)
- What is the New Enterprise Allowance (NEA) scheme and how is it connected to the Start Up Loans scheme?
For all information about the New Enterprise Allowance (NEA) scheme and its connection to Start Up Loans, please refer to the NEA FAQs.
- What is a Delivery Partner?
The Start Up Loans Company works with a network of Delivery Partner organisations, who support Start Up Loans applicants in all regions and industries throughout the UK. The Start Up Loans Company and its Delivery Partners are organisations that specialise in supporting new and existing businesses. Their role is to provide guidance to applicants in developing a business plan and cash flow, make the loan decision, and provide ongoing support and mentoring to Start Up Loan recipients.All Delivery Partners are closely monitored by the Start Up Loans Company to ensure a consistent approach and loan decisions across the network. View the list of all Delivery Partner organisations that we work with.
- Can I choose my Delivery Partner?
You will be given the opportunity to select a Delivery Partner organisation when you register your interest for a Start Up Loan online. There is a drop down menu from which you can select your preferred partner.It is important to note that a lot of the Delivery Partner organisations work within a specific region. Please remember that all Delivery Partners will offer the same help, advice and guidance under the Start Up Loans scheme, and that loan decisions and the loan terms will be the same from one Delivery Partner to the next.
If you do not select a Delivery Partner when you register your interest online, your application will be passed to the relevant Delivery Partner dependent on your location or industry.
- Can I change Delivery Partner?
Once you have been allocated to your Delivery Partner you will not be able to transfer to another partner. If you have a preference you must decide before filling out the online registration form and indicate which Delivery Partner you wish to work with by choosing from the drop down menu.
- Do Start Up Loans have a Sharia compliant offer?
The Start Up Loans Company has developed a Sharia compliant finance product.Sharia compliant finance for Start Up Loans is delivered through Financing Sharia Enterprise. Details regarding the structure of the finance can be found here.
The Start Up Loans Company
- What is Start Up Loans registered address?
The Start Up Loans Company, 33 Kingsway, London, WC2B 6UF
Treating customers fairly remains at the heart of the Start Up Loans programme, if you feel that we have not provided the service level you expected to receive, then please let us know.
This page contains links to third-party websites, so please read the linked websites’ terms and conditions. The Start Up Loans Company or its partner organisations have no control over third-party websites and is not liable for your use of them or any advice they provide you.