fundladderEvery way to raise money

Start Up Loans

A government-backed personal loan of up to £25,000 at a fixed rate, for people starting a business or in their first five years of trading, with 12 months of free mentoring.

L1 · Very cheap or subsidisedFCA regulation dependsLast checked: 7 October 2026
Cost band
L1
Very cheap or subsidised
Speed
Weeks
Amount
£500 to £25k
Term
1 to 5 years
Ownership
No shares given up
Security
  • No security

How it works

Start Up Loans is a British Business Bank programme. Each owner or partner applies as an individual and, if accepted, takes out an unsecured personal loan to use in the business.

  • Borrow from £500 to £25,000 per person, up to £100,000 for one business.
  • Fixed interest of 7.5% a year, repaid over 1 to 5 years.
  • No fees for arranging the loan or repaying early.
  • 12 months of free mentoring, plus help with business plans and cash flow forecasts.

You apply with a business plan, a cash flow forecast and a personal survival budget. There is a personal credit check and an affordability assessment.

Upsides and downsides

Upsides

  • Fixed interest rate, so repayments are predictable
  • No security needed and no fees for paying early
  • Free mentoring and support for the first 12 months
  • Open to new businesses with no trading history

Downsides

  • It is a personal loan, so you owe it even if the business fails
  • £25,000 per person may not be enough for capital-heavy businesses
  • The application needs a full business plan, cash flow forecast and personal budget

Risks

  • Missed repayments can damage your personal credit record
  • You remain personally liable if the business closes

What it costs

How it is priced
Fixed interest at 7.5% a year, with no arrangement or early repayment fees
Costs that are easy to miss
  • Time to prepare a business plan, cash flow forecast and personal survival budget

Per person. Several partners can each borrow up to £25,000, up to a maximum of £100,000 for one business.

Have a quote? True cost of a loan: work out the APR-equivalent and total cost

Does it fit?

Could fit when

  • You are starting a business or have traded for less than five years
  • You need up to £25,000 per founder
  • Banks have turned you down or you have no trading history

Unlikely to fit when

  • You need more than £100,000 for the business
  • You want to repay existing debts
  • You do not want to be personally liable for business borrowing
  • You have traded for more than five years (the scheme is for businesses trading for up to 60 months)
  • Your sector is excluded, for example gambling, weapons, adult content, property investment or FCA-regulated financial services

Who can use it

  • Business types: Sole trader, Partnership, Private limited company, LLP
  • Open to businesses with no sales yet
  • You are 18 or over, a UK resident, with the right to work in the UK
  • The business is based in the UK and is new or has been trading for up to 60 months
  • You cannot get finance elsewhere (a self-declaration is fine)
  • You pass a personal credit check and can afford the repayments
  • The loan cannot be used to repay debt or pay for training or qualifications
  • Applicants must hold shares and a controlling interest. Where there are several partners, those applying must hold at least 50%

Not available for: Weapons; Chemical manufacture; Pornography; Drugs; Illegal activities; Banking, money transfer and other FCA-regulated activities; Unlicensed private investigators; Gambling and betting; Property investment; Agents earning mainly commission for third parties (franchises can apply); Charities (CICs and social enterprises may be considered case by case).

Am I ready?

What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all government-backed and community lending

Ready

0%

0 of 4 ticked

Next to prepare
  1. Business plan
  2. Cash flow forecast
  3. Personal survival budget

Regulation and protections

FCA regulation depends

This is a personal loan, so you are personally liable for it whatever happens to the business. Read the loan agreement to see which protections and complaint routes apply.

The Start Up Loans website says that the British Business Bank group companies, other than BBB Investment Services Limited, are not authorised or regulated by the FCA.

Types of provider: The Start-Up Loans Company (part of the British Business Bank); Delivery partners that help with applications and mentoring.

Also consider

Compare these side by side

Sources

  1. Start Up Loans: home page (loan amount, rate, term, fees) · checked 7 October 2026
  2. Start Up Loans: Am I eligible? · checked 7 October 2026
  3. Start Up Loans: Frequently asked questions (regulatory status footer) · checked 7 October 2026
  4. Business.gov.uk: Applying for a Start Up Loan · checked 7 October 2026