What is a Start Up Loan?
A Start Up Loan is a personal loan for people who are looking to start or grow a business in the UK. It is funded by the UK Government, through its Start Up Loans scheme.
The loan is unsecured. This means you can borrow without having to provide assets or guarantors as security that you’ll pay back the money. An asset might be a property, while a guarantor is someone who agrees to cover the repayments if you can’t make them yourself.
If you already run a business and it has a number of owners or partners, each one of you can apply for up to £25,000. Together, you can borrow up to £100,000.
If we accept your application for a Start Up Loan, you’ll not only receive the money, but we’ll offer you 12 months of free business mentoring too (we call this ‘post-loan support’). We explain this later in the guide.
Key Details
- Borrow between £500 and £25,000
- Fixed interest rate of 6% per annum (per year)
- Pay back the loan over a term of 1–5 years
- No fees for applying or setting up the loan
- Free support with your application
- Free support and mentoring once you’ve received the money
- Free templates (including a business plan and cash flow forecast) and information guides
How do I apply for a Start Up Loan?
There are three steps to applying for a Start Up Loan:
Step 1 – We check your eligibility and have you register with us
First, we ask you to complete an initial eligibility check through our website. This is to make sure you meet all the conditions for a Start Up Loan.
If you are eligible, we then ask you to register. You’ll give us basic information about yourself, such as your name and contact details.
Once you are registered, we’ll send you an email asking you to create an account and password so you can use our online system (we call this a ‘customer portal’). This system is where you begin your application for a Start Up Loan.
Step 2 – You complete an application form in our online portal
The application form asks some questions about your situation. You’ll need to tell us how much money you want to borrow and how you’ll use the loan.
Next, we’ll run a credit check. This is where we look at your credit report to see whether you’ve used credit responsibly in the past. We do this as part of our own commitment to responsible lending.
If you pass the credit check, you have 90 days to complete your application. As part of this, you must provide the following three documents.
3 documents we need from you
Important note: You must provide these three documents in English.
Your business plan
This sets out what your business aims to do, and how you’ll achieve those aims over time.
It explains how you plan to make money so you can keep your business running into the future. It often includes information about your targets, marketing and sales plans, and financial forecasts.
Your cash flow forecast
This gives an estimate of the money you expect your business to bring in and pay out over time.
It should explain all the ways in which you’ll have money coming in to the business (for example, from selling your products or services) and compare these against the expenses you’ll have to pay (such as payments to suppliers, rent for premises, and tax).
For a Start Up Loan, your cash flow forecast will need to cover a period of 12 months. This helps us to understand whether your plans are strong enough to make sure your business can stay operating over time.
Your personal survival budget
This shows your monthly income (for example, from your salary or benefits payments), minus all the costs and expenses you would pay during the same month (such as rent, utilities bills, and groceries). It is your personal budget, not your business’s budget.
We use this budget to decide whether you can afford the monthly loan repayments. If we don’t think you can, we won’t be able to offer you a Start Up Loan.
Step 3 – You and our business adviser put together your business documents
When you apply for a Start Up Loan, we pair you with one of our business advisers.
The adviser will look at your business plan, cash flow forecast and personal survival budget to make sure they contain all the information we need.
We’ll then assess the documents alongside your application. We’ll use your business plan and cash flow forecast to judge whether your business is viable (capable of being successful). We’ll use your personal survival budget to decide whether you can afford the loan.
If we approve your application, we’ll send you your personal loan agreement online. We’ll also invite you to take up 12 months of free business mentoring (what we call ‘post-loan support’) – see the ‘Business mentoring’ section below.
Who provides the money?
You arrange the finance through us, the Start-Up Loans Company. We work with our delivery partners and finance partners to make the process as efficient as possible.
Our delivery partners
We have a network of delivery partners across the UK. When you apply for a loan with us, we match you with one of these partners – usually one that’s based in your area.
The delivery partner will allocate one of their business advisers to work with you. The adviser will have lots of experience and will be your key point of contact throughout the loan process. They will:
- help you prepare your business plan and cash flow forecast
- if your application is successful, provide ongoing mentoring
The delivery partner is also responsible for assessing your final loan application.
Our finance partner
If we approve your application for a Start Up Loan, you’ll receive the money through our finance partner, GC Business Finance (GCBF).
GCBF is regulated by the Financial Conduct Authority. As well as issuing your funds, it:
- manages your loan agreement
- collects the repayments
- acts as the main contact for any matters relating to your loan and repayments
What happens once I get the loan?
Business mentoring (post-loan support)
When you’re approved for a Start Up Loan, we also offer you 12 months of free business mentoring.
Our mentors are experienced business professionals who can guide you through the early stages of starting or growing a business. You can talk to them about anything to do with your business, and they can provide advice, guidance, reassurance and access to useful resources and contacts.
Other useful resources
Frequently asked questions (FAQs)
Find answers to common questions about Start Up Loans, the application process, who is eligible, and more.
Loan repayment calculator (in English)
Use this to work out what your total and monthly loan repayments will be.
How to write a business plan
Find out what makes a strong business plan and what information you need to include in your plan when applying for a Start Up Loan.
The Start-Up Loans Company – who we are
The UK Government set up our company in 2012 to deliver its Start Up Loans scheme.
The aim of the scheme is to make owning a business possible for people who struggle to raise finance through traditional providers, such as high-street banks.
The Start-Up Loans Company is part of the British Business Bank, a government-owned but independently managed organisation whose aim is to make finance markets work better for small businesses in the UK.
