Table of Contents
What is it?
Start Up Loans are aimed at new businesses or those in their first couple of years of trading. They’re usually unsecured, government-backed, and come with fixed interest rates and simple repayment terms.
These aren’t big-ticket commercial loans – more of a helpful boost to get your business off the ground or through its early wobbles.
You might also get access to mentoring or business support as part of the package.
Pros and Cons
| Pros | Cons |
|---|---|
| ✅ Designed specifically for new or early-stage businesses | ⚠️ Loan amounts are usually capped (e.g. £25k) |
| ✅ Fixed interest rates – predictable repayments | ⚠️ You may still need a business plan and forecasts |
| ✅ No assets required – unsecured lending | ⚠️ Personal credit history and guarantee usually required |
| ✅ Often comes with free business mentoring | ⚠️ May not be suitable if you’ve already been trading a while |
| ✅ Interest may be tax-deductible as a business expense | ⚠️ Can’t be used for all types of business activities |
When is it a good fit?
Start Up Loans work well when:
- You’re launching a brand new business
- You’ve been trading for less than 2 years
- You need a small amount of funding to get moving
- You don’t yet qualify for traditional lending
Extra tips and things to consider
- These are often backed by the British Business Bank, so you may find government-affiliated lenders offering them.
- You’ll need to show how the money will be used – e.g. stock, marketing, kit, etc.
- Even though it’s business lending, your personal credit score still matters.
- Loan interest is usually tax-deductible – but worth running past your accountant to be sure.
Still unsure?
If you’re starting out and unsure how to fund your launch, we can help weigh up your options – including grants, start up loans, and other forms of early-stage support.
Use the [Finance Finder Tool] or drop us a message for straight-talking advice.
