Start Up Loans
Starting a business can be exciting, but it can also come with financial challenges. If you’re at the early stages of launching your business and need funding support, the Start Up Loans programme from the British Business Bank could be a game-changer. This government-backed scheme offers affordable personal loans and dedicated support to help get your business off the ground, no matter your industry or background.
What is a Start Up Loan?
The Start Up Loans programme is a government-funded initiative designed to help individuals start or grow a business in the UK. Unlike a business loan, this is a personal loan for business purposes. That means it’s unsecured, doesn’t require assets or guarantors, and comes with a fixed, low interest rate. The programme also provides free mentoring, support, and access to useful resources, making it much more than just a loan.
Key Features at a Glance
- Loan amount: From £500 to £25,000 per co-founder
- Interest rate: Fixed at 6% per annum
- Loan term: 1 to 5 years (no early repayment fees)
- Eligibility: UK resident aged 18+, starting or growing a UK-based business
- Support included: Free business mentoring for 12 months and access to templates, guides and planning tools
Who Can Apply?
The Start Up Loan is open to a wide range of applicants, including:
- Aspiring entrepreneurs launching a brand-new business
- Existing businesses that have been trading for less than 3 years
- People with no previous business experience
- Individuals from any sector or background
You must have a UK-based business or plan to start one, and you’ll need to demonstrate that your idea is viable with a business plan and cashflow forecast.
What Can the Loan Be Used For?
You can use a Start Up Loan to cover almost any legitimate business cost, such as:
- Equipment or machinery
- Website and branding
- Marketing or social media advertising
- Rent, utilities or inventory
- Professional services (e.g. legal or accounting)
- Initial working capital
It is not suitable for debt consolidation or personal use – funds must be used to help develop your business.
Benefits Beyond the Money
What sets Start Up Loans apart is the wraparound support that comes with the funding. Successful applicants benefit from:
- 12 months of free mentoring
- Business plan templates and cashflow guides
- Ongoing support from delivery partners
- Access to helpful start-up tools and resources
This hands-on guidance can make a big difference when navigating the early stages of business ownership.
Application Process
- Check eligibility – Visit the Start Up Loans website and use the online checker tool.
- Prepare your documents – You’ll need a personal ID, a business plan and a cashflow forecast.
- Apply online – Submit your application through one of the official delivery partners.
- Assessment – Your application will be reviewed for viability.
- Decision and funding – If approved, the loan is paid directly into your personal account.
The whole process typically takes 2 to 6 weeks, depending on how quickly you submit your information.
Is There a Credit Check?
Yes – the loan is a regulated personal loan, so your credit history will be assessed. However, many applicants with limited credit history have been successful, especially if they can demonstrate a strong and workable business idea.
Why Consider a Start Up Loan?
- Fixed repayments make it easy to plan your cashflow
- No hidden fees or early repayment charges
- You retain full ownership of your business
- Government-backed credibility can boost your confidence with suppliers and partners
- Mentoring adds extra value at a critical stage of growth
How to Apply
You can apply directly through the Start Up Loans website, which is operated by the British Business Bank. You’ll be matched with a delivery partner who will guide you through the process and help you finalise your business plan and forecast.
And if you're not sure whether it’s right for you, we're here to help! If you’d like a second pair of eyes on your business plan, need help preparing your application, or just want to chat about Start Up Loans, get in touch with the Growth Hub Team.
