About the Start Up Loan
- What is a Start Up Loan?
The Start Up Loans Company is a government-backed scheme, established in September 2012, with the goal of helping early stage businesses in the UK access affordable finance and mentoring support to start and grow. Start Up Loans are unsecured personal loans that must be used for business purposes, and all applications take in to consideration both the individual’s personal affordability and the needs of the business.
The Start Up Loans Company works with a national network of Delivery Partners who, in addition to helping applicants prepare their business plan and cash flow forecast, are responsible for reviewing the final application, making the loan decision and providing ongoing mentoring support to successful applicants. Our Delivery Partners are closely monitored by The Start Up Loans Company to deliver a consistent approach to supporting applicants and ensure responsible loan decisions across the network.
- Is a Start Up Loan a grant?
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.
- 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 interest rate of 6% per annum, with a monthly repayment schedule that can be set over a loan term of one to five years, depending on your preference. The interest received is recycled back into the programme to allow us to support more individuals across the UK.
Check out our Loan Calculator if you’d like help calculating your potential monthly loan repayments.
- Who is eligible to apply for a Start Up Loan?
You are eligible to apply for a Start Up Loan if:
- You are 18 years or older at the time of your application
- Your business is or will be based in the UK – this means your business must be a UK registered company and/or registered in the UK for tax purposes.
Please note, businesses that primarily export goods or services overseas may still be eligible to apply provided the operational side of the business and the majority of revenue resides in the UK.
- You’re a current UK resident and will be for the duration of your proposed loan term
- You have the right to be self-employed in the UK
- You are not currently bankrupt or on a Debt Relief Order (DRO), nor have you been discharged from one of these in the last two years
- You do not currently have an outstanding Individual Voluntary Arrangement (IVA) or Trust Deed, nor have you been discharged from one of these in the last two years
- You are not currently on a Debt Management Programme or Debt Arrangement scheme
- You are starting a new business or you have been trading for no longer than 24 months
If you’re ready to apply, register your details now to get started.
- Can I apply for a Start Up Loan if I am currently bankrupt, on a Debt Relief Order (DRO) have an outstanding Individual Voluntary Arrangement (IVA) or Trust Deed, or am on a Debt Management Programme?
Unfortunately you are not eligible to apply for a Start Up Loan if you are currently bankrupt, or have been discharged from bankruptcy in the last two years. This also applies to individuals who currently are on a Debt Relief Order, have an outstanding Individual Voluntary Arrangement (IVA) or Trust Deed or are on a Debt Management Programme.The Start Up Loans Company is committed to lending responsibly and will not lend where doing so will further indebt the applicant. We would be able to reconsider your application once you have been discharged from any of these circumstances for more than two years. For those on a Debt Management Programme, you will be eligible to apply once you have repaid those debts in full.
- 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.
The application process
- 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 who will contact you within three working days. 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 check will be carried out to make a decision about products and services we can offer through our partners. Any credit 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. Please note, your consent will always be obtained before conducting a credit check.
- Who will review my application and decide if I can have a Start Up Loan?
The Start Up Loans Company provides criteria to every Delivery Partner to ensure a consistent approach is followed, however Delivery Partners will ultimately base their decision on the individual and the business plan.
- Do I need a business bank account to receive this loan?
No. A Start Up Loan is a personal loan, so you will need to provide a personal bank account if you are approved for a Start Up Loan.
- I have applied for a Start Up Loan but have not heard anything?
If you have not been contacted within three working days, please email firstname.lastname@example.org and we will do our best to help you.
- Would applying for a Start Up Loan affect my state benefit entitlements?
We are unable to give advice on state benefit entitlements, please talk to your Job Centre Plus for information.
- Can I only apply for one Start Up Loan?
Every individual can only apply for a Start Up Loan for one business. 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 Start Up 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. For example, if you initially borrowed £20,000 and since then, repaid £10,000, you may be eligible to borrow up to a further £15,000 (subject to meeting all other eligibility criteria).
To check your eligibility for a second Start Up Loan, please call our Client Services team on 0203 418 0890 for a short discussion about your business. Lines are open Monday to Friday from 9.30am – 5.30pm.
- 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 one to five years, though the exact term will be agreed as part of the 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, the Loan Provider may then look to recover the outstanding payments through various means such as, but not limited to, issuing a CCJ or referring the case to an approved Debt Collection Agent.
Unsure of who your Loan Provider is? Please check the Loan Agreement you signed prior to drawing down your loan.
- 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 Loan Providers listed below:
- Do I still need to repay the Start Up 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 Loan 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 from my Delivery Partner or Loan Provider. 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 Rossendales Collect. What should I do?
Please contact Rossendales Collect 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 helping individuals improve their situation and they’ve already helped millions of people manage 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 (email@example.com) 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.
Sharia compliant finance
- Does The Start Up Loans Company 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
- Where can I send written correspondence for The Start Up Loans Company?
All written correspondence can be sent to:
The Start Up Loans Company
Treating customers fairly lies at the heart of the Start Up Loans scheme. 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.