£500 to £25,000 per founder at a fixed 7.5%, with free mentoring and no trading history needed. It is also a personal loan, not company debt —— which changes the decision entirely.
The Start Up Loan is the first cheque for a very large number of UK businesses, and it is the one piece of early funding that does not require a trading history, an investor, or an asset to secure against. It is delivered through the British Business Bank.
It is also, in a way that matters enormously and gets glossed over, not a business loan. It is a personal loan to you. You put the money into the company; you owe it either way.
| What it is | |
|---|---|
| Amount | £500 to £25,000 per person. Each founder is assessed individually, so a team can raise more than one. |
| Rate | Fixed 7.5% a year — the same whatever your sector or credit profile. |
| Term | 1 to 5 years. No application fee and no early repayment fee, so overpaying in a good month costs nothing. |
| Eligibility | Business fully trading for less than five years, including not trading yet. You must live in the UK and be 18 or over. |
| What comes with it | Free guidance on writing the business plan, and up to 12 months of free mentoring if you are approved. |
| What it actually is | An unsecured personal loan to you, not lending to the company. This is the part that changes the decision. |
The limited company structure does not stand between you and this debt. If the business fails you still owe the money, and it does not disappear when the company is dissolved. That is not a reason to avoid a Start Up Loan — it is the cheapest early money most founders can get — but it is a reason to size it against your own household position rather than the company's forecast.
Two founders each take £20,000 at the fixed 7.5% over five years.
Set against equity, that is the whole argument. Selling 10% of a company that later works can cost several hundred thousand pounds. £8,090 is a known, fixed, boring number — and the founders still own everything.
Set against your own position, it is a personal commitment of £401 a month for five years, whatever the company does. Both of those things are true at once, and the decision is which risk you would rather carry.
Illustrative. Check current rates and your own repayment figures before committing.
Not a vision document. What you sell, to whom, at what margin, and what the money specifically buys. The free plan guidance that comes with the scheme is genuinely good; use it rather than paying somebody.
Assessors are looking for whether you can service the repayments, not whether the idea is exciting. Our free cashflow template is built for exactly this.
This is personal borrowing and it is underwritten against your personal credit file. Several hard searches in a short window reads as distress, so apply selectively rather than everywhere at once.
If the money buys something with a visible return, debt is almost always cheaper than equity. If the work is genuinely unproven and years from revenue, fixed repayments against uncertainty are the thing that kills the company.
£500 to £25,000 per person, at a fixed 7.5% a year, repayable over one to five years. There is no application fee and no early repayment fee. Because it is a personal loan to you rather than lending to the company, more than one founder in the same business can apply separately, each assessed on their own circumstances.
No, and this is the part founders most often misunderstand. It is an unsecured personal loan to you, which you then put into the business. You are personally liable for repaying it whatever happens to the company — the limited company structure does not stand between you and this debt. That is not a reason to avoid it, but it is a reason to size it honestly.
The business must have been fully trading for less than five years. Pre-revenue and pre-launch businesses are eligible, which is much of the point — there is no trading history requirement, because the assessment is of you and your plan rather than of the company's accounts.
Successful applicants get up to 12 months of free mentoring, and there is free guidance on writing the business plan before you even apply. Founders routinely ignore both. A monthly hour with somebody who has run a business, at no cost, is worth more than most of what gets sold to early-stage companies.
You still owe the money. It is personal borrowing, so it sits with you rather than with the company, and it does not disappear if the company is dissolved. Model the repayment against your own household position, not just the company's forecast.
If the money buys something with a visible return — stock that turns, equipment that earns, a hire with measurable output — debt is usually cheaper than equity and you keep the whole company. If the work is genuinely unproven and years from revenue, fixed monthly repayments against that uncertainty are what kills companies, and equity is the more honest instrument.
