Business News

What is the Start Up Loans scheme and how does it work?

Clever Accounts

Launched back in 2012 by the Start Up Loans Company, The Start Up Loans program was introduced to encourage entrepreneurship in the UK and provide easier financing access to new businesses.
For those eligible, this government-backed personal loan offers borrowing of up to £25,000 along with a repayment plan at a fixed interest rate of 6% per annum, over a period of 1-5 years.
In addition to financing, the Start Up Loans program provides 12 months of free business mentoring via its network of Delivery Partners and free Open University business learning courses, for its successful applicants.
In this guide, we’ll explain how the Start Up Loans Program works, what are the eligibility requirements, the application process, and how you can appeal if your application is declined.

How does the Start Up Loans Program work?

A Start Up Loan is a government-backed, unsecured personal loan. So there’s no need to include any assets or guarantors with your application.
Available to individuals looking to start or grow a business in the UK.
Business owners can individually apply from £500 to £25,000 each, with a maximum of £100,000 available per business.
The loan can be repaid throughout a period of 1-5 years with a fixed interest fee of 6% per annum.

What are the eligibility criteria?

  • Must be over 18.
  • You are a UK resident and have the right to work in the UK.
  • Your business is based in the UK.
  • Your business hasn’t been trading for more than 2 years.
  • You’re unable to secure finance from other sources.
  • You have passed a credit check and are able to repay the loan.

Your business activity cannot be related to one of these categories:

  • Weapons
  • Chemical manufacture
  • Pornography
  • Drugs
  • Illegal activities
  • Banking & money transfer services.
  • Private investigators
  • Gambling and betting
  • Property investment
  • Charities
  • Agents for third parties

Lastly, the program does not apply for:

  • Debt repayment.
  • Personal training and qualifications.
  • Ad-hoc investment opportunities which are not part of your ongoing business activity.

How to apply for a Start Up Loan?

You can use the online form to apply.

The registration process will include these stages:

  • Eligibility check.
  • Questions about your financing needs and how you intend to use the loan.
  • A personal credit check.
  • You will then be asked to submit a Business Plan, Cash Flow Forecast and Personal Survival Budget.
  • Upon passing the credit check, you’ll be assigned with a Delivery Partner to support your application and review the documents that have been submitted.

How to appeal if your loan application has been declined?

You can submit an appeal 30 days after you have received an outcome email, by completing the online contact form.

From a delicious idea to a successful business – The story of bakedin.

Seen enough? Want to get started now?

Sign up to Clever Accounts and get fixed fee hassle-free accounting

Related Blogs