What are the best alternatives to a Start Up Loan?

Why consider alternatives to a Start Up Loan?

Be clear about what you would be giving up. The Start Up Loans scheme is delivered by the Start Up Loans Company, a subsidiary of the British Business Bank, which is wholly owned by the UK government. It has lent more than £1 billion to over 115,000 businesses since 2012 and holds a Trustpilot score of 4.4 from 1,200 reviews. It charges a fixed 7.5% annual interest rate on the reducing balance, the same for every borrower regardless of risk, raised from 6% for applications from 6 April 2026. A delivery partner’s representative example puts £10,000 over 60 months at 7.5% at a 7.78% APR. Free business planning support and 12 months of mentoring come with it.

Nothing on the commercial market prices like that for a business with no trading history, so if you are eligible and not in a hurry, the honest answer is to apply and wait.

People leave for four reasons, and price is not one of them. The first is the clock: 4 to 8 weeks from application to decision, because the process includes a business plan review. The second is the ceiling: £25,000 per applicant, although each director in the same business can apply separately, up to £100,000 in total. The third is structure: it is a personal loan to the founder, so it sits on your personal credit file. The fourth is eligibility, and it catches people out. You must have traded fewer than 60 months, hold a UK National Insurance number, and not be funding property development or buy to let, which the scheme excludes.

The seven options below all move faster. Every one of them costs more. Six of them need trading history the scheme does not ask for. Read the trading requirement on each before the rate.

Top Start Up Loans alternatives

1. Tide, Best for the same scheme loan plus a day one account

Tide is worth naming first because it does not force a choice. It offers a Start Up Loan at a fixed annual rate alongside its own business loans, and its business account opens on day one with no credit check and no minimum turnover. That means you can start trading and building an account history while a scheme application runs, which is exactly the gap the 4 to 8 week wait creates.

Rates and amounts: Business loans of £1,000 to £500,000 at 7.9% to 49.9% per annum, 24.9% APR representative. A revolving credit facility is priced per month and a Start Up Loan is offered at a fixed annual rate; neither is reflected in that band.

Eligibility: Account available from day one with no credit check; 12 months or more of trading and demonstrated revenue for Tide’s own credit products, with a clean or near clean credit profile.

Pros: Route to a Start Up Loan and a business account from one provider; account opens same day; invoicing and expense tools included; more than 600,000 businesses and a Trustpilot score of 4.3 from 20,500 reviews.

Cons: Tide’s own lending needs 12 months of trading, so it is not available to a pre-revenue founder; the 49.9% top of its loan band is expensive; it is an e-money institution, and its record notes it is not ideal for businesses requiring FSCS protected deposits.

Best for: Founders who want to open an account and start trading now while the scheme application progresses.

2. iwoca, Best once you have 3 months of trading

iwoca has the lowest published trading requirement of any business lender on the Lendus panel: 3 months and £25,000 of turnover. It lends £1,000 to £500,000 at 2% to 6% per month on the outstanding balance with a 49.9% representative APR, and decides within 24 hours, often within hours, using Open Banking data rather than filed accounts.

Rates and amounts: 2% to 6% per month on the outstanding balance; 49.9% APR representative; £1,000 to £500,000.

Eligibility: 3 months or more trading; £25,000 minimum turnover; soft credit check first, full check on approval; declines active CCJs above £250, insolvency proceedings, or more than 3 months of arrears.

Pros: Lowest trading threshold among the commercial lenders here; decisions within 24 hours; Open Banking assessment means a thin credit file is not automatically fatal; borrows well above the £25,000 scheme cap.

Cons: Priced per month, which makes it expensive over terms longer than 12 months; a 49.9% representative APR is roughly six times the scheme’s fixed rate; £25,000 of turnover is more than many first year businesses generate.

Best for: Founders who launched three months ago, have revenue arriving, and cannot wait eight weeks for a decision.

3. Capital on Tap, Best for a revolving line decided in minutes

Capital on Tap, the trading name of New Wave Capital Limited, is the fastest option here: decisions typically arrive within minutes. It provides a business credit card and revolving credit line of £500 to £250,000 at 1.25% to 3% per month on the outstanding balance, with a 49.8% representative APR, and its £500 entry point matches the scheme’s £500 floor.

Rates and amounts: 1.25% to 3% per month on the outstanding balance; 49.8% APR representative; £500 to £250,000.

Eligibility: 12 months or more trading; £24,000 minimum turnover, the lowest of the credit products here; personal credit check on the director, with an Experian score of around 550 generally required though not a hard cutoff.

Pros: Decisions in minutes; revolving, so you draw and repay rather than taking a lump sum; cashback and rewards on card spending; Trustpilot score of 4.7 from 8,200 reviews across more than 200,000 businesses.

Cons: 12 months of trading rules out the founders the scheme is designed for; adverse credit or CCJs may be declined; a fixed rate loan is cheaper for a planned one off purchase.

Best for: Businesses a year past launch that need an ongoing buffer for stock and supplier payments rather than a single lump sum.

4. Bizcap, Best when credit history is the obstacle

Bizcap accepts adverse credit and decides primarily on cash flow and bank statement analysis rather than credit scoring, which is a genuinely different test from the scheme’s personal credit check. It lends £10,000 to £500,000 at 1.5% to 5% per month with a 43.2% representative APR, and decides within 24 hours. The catch is turnover.

Rates and amounts: 1.5% to 5% per month; 43.2% APR representative; £10,000 to £500,000.

Eligibility: At least 4 months trading; £120,000 minimum turnover, the highest here; adverse credit accepted; directors’ personal guarantee required.

Pros: Adverse credit accepted where the scheme may decline for recent bankruptcy, an active IVA or an undischarged debt management plan; decisions within 24 hours; Trustpilot score of 4.7 from 1,800 reviews.

Cons: £120,000 turnover requirement excludes almost every genuine start-up; £10,000 minimum; personal guarantee required; a 43.2% representative APR against a 7.5% fixed rate.

Best for: Businesses trading a few months with real revenue, where a past credit event is the reason the cheaper routes are closed.

5. Nucleus Commercial Finance, Best for loans and equipment from one lender

Nucleus lends £3,000 to £2 million at 1.5% to 5% per month with a 36% representative APR, decides within 24 hours, and covers both unsecured business loans and asset finance. For a young business that needs working capital and a piece of equipment, that removes a second application and a second set of documents.

Rates and amounts: 1.5% to 5% per month; 36% APR representative; £3,000 to £2 million.

Eligibility: 6 months or more trading; £50,000 minimum turnover; adverse credit considered; directors’ personal guarantee usually required.

Pros: Lowest representative APR of the monthly priced lenders here at 36%; unsecured lending and asset finance from one lender; decisions within 24 hours; Trustpilot score of 4.6 from 900 reviews.

Cons: 6 months of trading and £50,000 of turnover; personal guarantee usually required; not a self serve digital application, so it generally runs through a broker.

Best for: Businesses six months to two years old funding both stock or wages and a piece of equipment at the same time.

6. Funding Circle, Best rate once you have a year behind you

Funding Circle is the only lender here whose published band starts below the scheme’s fixed rate, at 6.9% per annum, with a 13.9% representative APR and a 36% ceiling. It lends £10,000 to £500,000 on fixed rate terms with predictable monthly repayments, decides within 24 hours and releases funds typically within 3 business days. It has funded more than 130,000 businesses and holds a Trustpilot score of 4.6 from 15,200 reviews.

Rates and amounts: 6.9% to 36% per annum, fixed for the term; 13.9% APR representative; £10,000 to £500,000.

Eligibility: 1 year or more of trading; £50,000 minimum turnover; business and personal credit checks on directors; its record notes it is not ideal for businesses under 2 years old, and CCJs, significant defaults or recent insolvency are unlikely to be approved.

Pros: Only option here with a starting rate below 7.5%; fixed monthly repayments with a clear end date; annual pricing, so the cost is directly comparable with the scheme; well above the £25,000 cap.

Cons: A year of trading and £50,000 of turnover; the band runs to 36%, so the 6.9% is a best case; £10,000 minimum; nothing for pre-revenue founders.

Best for: Businesses that took a Start Up Loan a year or two ago and now want a larger facility at a rate that can compete with it.

7. Shire Leasing, Best if the £25,000 is for equipment

If the reason for the loan is a machine, a vehicle, an IT rollout or office equipment, asset finance answers a different question. The facility is secured against the asset itself, which is why Shire Leasing can work with 3 months of trading and no minimum turnover, and consider start-ups through its specialist funder panel. It lends £1,000 to £1 million at 5% to 25% per annum and gives same day decisions on standard deals.

Rates and amounts: 5% to 25% per annum depending on asset, funder and credit profile; £1,000 to £1 million. Its representative example is £30,000 over 36 months with £35,800 total repayable and £5,800 cost of credit.

Eligibility: 3 months or more trading, with start-ups considered via the specialist funder panel; no minimum turnover; adverse credit, CCJs and limited trading history can be placed with appropriate specialist funders.

Pros: Same 3 month threshold as iwoca with no turnover requirement; secured on the asset rather than resting solely on your personal credit file; same day decisions on standard deals; Trustpilot score of 4.8 from 1,800 reviews.

Cons: Only useful if you are buying an asset; Shire is a broker and funder rather than a direct lender, and its own record notes the end funder’s terms may vary from the initial indicative rates; the top of the band at 25% per annum is more than three times the scheme’s rate.

Best for: Founders whose funding requirement is a specific piece of equipment rather than general working capital.

Lendus has not verified Shire Leasing’s regulatory status from a primary source, so check it on the FCA Register at register.fca.org.uk before you commit to this lender.

Comparison table

The scheme’s 7.5% is a fixed annual interest rate on the reducing balance, not an APR. Monthly rates in this table are not APRs either, and none of the three measures can be read against each other directly.

How to choose the right alternative

Stay with the scheme if you are pre-revenue, borrowing £25,000 or less and can wait 4 to 8 weeks. At 7.5% fixed with free mentoring, nothing here competes on cost, and each director can apply separately up to £100,000 per business.

Choose Tide if you want to open an account today and keep the scheme application running in parallel.

Choose iwoca if you have traded 3 months, turn over £25,000 or more, and the deadline is this week.

Choose Capital on Tap if you are a year in and want a revolving buffer rather than a lump sum, decided in minutes.

Choose Bizcap if a past credit event has closed the cheaper routes and your turnover is £120,000 or more.

Choose Nucleus Commercial Finance if you need working capital and equipment together and have six months of trading behind you.

Choose Funding Circle if you have a year of trading and £50,000 of turnover, and want the only starting rate here that goes below the scheme’s.

Choose Shire Leasing if the money was always going to be spent on a specific asset, and check its FCA status yourself first.

Lendus is an introducer, not a lender or a credit broker, and does not approve or decline anything. Every figure above comes from the lender’s own record on this site. Rates and criteria change, so confirm current terms with the lender and check its authorisation on the FCA Register at register.fca.org.uk before you sign.