Frequently asked questions

Eligibility

Are all types of business eligible for a Start Up Loan?

Start Up Loans are designed to be used to start a new business or grow an existing business that has been trading for less than 24 months. While we can support most business types, there are a few that we are unable to support. Please visit our eligibility page for a full list of all excluded business types.

Can I apply for a loan if I have poor credit?

Poor credit isn’t necessarily a barrier to getting a Start Up Loan, however we do carry out a full credit check on applicants. The Start Up Loans Company is committed to lending responsibly and has to ensure that applicants will be able to repay the loan.

You cannot receive a Start Up Loan if:

  • You are filing for or currently bankrupt or on a Debt Relief Order (DRO)
  • You have an outstanding Individual Voluntary Agreement (IVA) or Trust Deed
  • You are on Debt Management Programs or Debt Arrangement Schemes (DAS)

For full details, please see our dedicated page on credit checks.

I’m on a Debt Relief Order (DRO), can I apply?

If you are on a Debt Relief Order (DRO), you are subject to restrictions around setting up and promoting a business and acting as a director. These restrictions may make it difficult for you to launch your business and, therefore, to repay any loans taken out for that business.

The Start Up Loans Company and its Delivery Partners are responsible lenders committed to ensuring that we don’t compound any credit issues that applicants have by increasing their financial indebtedness. We are therefore unable to support individuals until they have been discharged from any outstanding DRO.

For full details, please see our dedicated page on credit checks.

I have a Debt Management Plan (DMP), can I apply?

Unfortunately we cannot consider your application until you have repaid these debts in full. The Start Up Loans Company is committed to lending responsibly and will not lend where doing so will further indebt the applicant.

For full details, please see our dedicated page on credit checks.

Why won’t you lend to people who have certain credit issues?

The Start Up Loans Company and its Delivery Partners are committed to being responsible lenders and it’s important to us that we don’t compound any existing credit issues that applicants may have by increasing their financial indebtedness.

For full details, please see our dedicated page on credit checks.

Can I apply for a loan if I’m currently on State benefits?

Being on State benefits does not necessarily exclude you from applying a Start Up Loan but we cannot provide individual guidance on state benefit entitlements. Please talk to your Job Centre Plus for information.

Am I eligible to apply if I’m purchasing an existing business?

Yes, you are still eligible to apply for a Start Up Loan if you are purchasing an existing business, even if it has been trading for more than two years under different ownership, provided you have personally not owned the business for more than two years. In this instance, you will be required to have sourced a copy of the financial accounts for the business and will need to provide these along with your application. Please note that if the business was previously or is currently operating at a loss, you will be expected to address this issue directly in your business plan.

How do I know how long my business has been trading?

For the purposes of applying for a Start Up Loan, trading is defined as a business carrying out activities such as buying and selling goods, carrying on a trade or profession, providing services or be generating revenue on a consistent basis. If you don’t meet these criteria, then you are not likely to be classified as trading. Please note, if you have engaged in periods of ad hoc market testing or incurred expenses for non-revenue generating activities, these periods will not be included in your total trading time. Remember, to be eligible for a Start Up Loan, you cannot have been trading for more than 24 months. Please see our eligibility criteria page for more information or contact us if you’re not sure.

I am on a visa, can I apply?

It depends on your visa. There are a range of visas that restrict an individual’s ability to work in the UK, whether based on sponsorship, number of hours or the right to be self-employed. The following visa types would exclude you from applying for a Start Up Loan:

  • Tier 1 visa (all categories)
  • Tier 2 visa (all categories)
  • Tier 4 (General) student visa
  • Tier 5 visa (temporary worker)
  • Domestic Workers on a Private Household visa
  • Representative of an Overseas Business visa

For the avoidance of doubt, individuals on an Ancestry Visa are eligible under the scheme, as are individuals with a visa with a restriction that states “no recourse to public funds” provided those restrictions do not fall under the above exclusions.

If you are unsure whether your visa is eligible under the scheme, please refer to the Government website for more information about your visa type.

Please note, if your visa type does fit our eligibility criteria, you will still be required to ensure that the loan term you request in your application will enable you to fully complete your loan repayments at least six months prior to the expiry of your visa. For example, if you are on a four year visa, then the maximum loan term we could offer you would be 3 years and 6 months as you would need to have fully repaid the loan six months before your visa expires.

Am I eligible to apply if I am an international student living in the UK?

It depends on your visa. If you have a Tier 4 visa, then unfortunately you are not eligible to apply for a Start Up Loan as self-employment is excluded under this visa. Similarly, 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.

My business exports goods internationally. Am I still eligible to apply?

Yes, subject to three core factors.

  1. Your business must be a UK registered company and/or registered in the UK for tax purposes.
  2. The operational side of your business must be based in the UK.
  3. The majority of revenue generated by your business must also reside in the UK.
Does my business need to be registered with Companies House or HMRC before I can apply?

No, your business does not need to be registered with Companies House or HMRC in order to apply for a Start Up Loan.

Can my business partner apply too?

Yes, multiple business partners for the same business can each individually apply for a Start Up Loan. We can lend a maximum of £100,000 to any one business, which means that up to four business partners can borrow a maximum of £25,000 each. Please note that all business partners must apply through the same Delivery Partner.

Can I add my business partner to my application?

You can’t add your business partner to your application as all applicants need to individually apply, even if the money is being invested in the same business. This is because Start Up Loans are personal loans for business purposes, and therefore we run a variety of checks related to your individual ability to afford and pay back your loan. However, you can both supply the same business plan and cash flow forecast as part of your applications.

I have a business partner. Is the credit check run under both of our names?

No, because Start Up Loans are personal loans invested in a business and therefore the credit check that we run is based on each individual applicant.

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