Startup Business Loans

The UK Government's Start Up Loans scheme provides personal loans of up to £25,000 per director (maximum £100,000 per business) at a fixed rate of 6% per annum, with terms of 1-5 years. No security is required. Applications are assessed on business plan quality, personal credit history, and the viability of the concept. Free mentoring is included. This is typically the first port of call for pre-revenue or early-stage businesses.

Where a director owns residential or commercial property, a loan secured against that property can unlock significantly larger amounts than an unsecured startup loan. The business's lack of trading history is less relevant when the lender has first or second charge security against property. Rates are lower and amounts higher, but the director's personal property is at risk if the business fails to service the debt.

Hire purchase and finance lease are available to some startups because the asset itself provides the security. A new business buying a van, a piece of machinery, or kitchen equipment can often access asset finance within weeks of incorporation, particularly where the director has a clean personal credit profile.

Startups that have already won B2B contracts and are raising invoices can access invoice finance from some specialist providers with minimal trading history. The quality of the customer base is the primary underwriting factor.

For pre-revenue businesses, commercial lending may not be the right first step. We can signpost you to the British Business Bank's resources on equity investment, angel networks, and crowdfunding platforms that are better suited to very early-stage businesses.