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Start Up Loans Review

The Start Up Loans programme is a UK government-backed scheme administered by the British Business Bank, offering fixed-rate personal loans of £500 to £25,000 to entrepreneurs who want to start or grow a business in the UK. All loans carry a fixed interest rate of 6% per annum, making them significantly cheaper than most alternative lenders. Beyond the loan itself, the scheme provides free pre-application support, mentoring, and business planning assistance — making it particularly valuable for first-time founders.

Written by the Lendus editorial team. Last updated: April 2026.

200+ UK lenders
2-minute application
No credit check to apply
FCA-regulated brokers

Amount

£500 – £25k

Rates

6% – 6%

fixed annual interest rate — all Start Up Loans carry the same 6% p.a. rate regardless of credit profile

Speed

Application to decision: typically 4–8 weeks (includes business plan review and mentoring)

Trustpilot

4.4/5

1,200 reviews

What is Start Up Loans?

Start Up Loans (British Business Bank (Start Up Loans Company)) is a UK-based business finance provider founded in 2012 and headquartered in London (British Business Bank). The Start Up Loans programme is a UK government-backed scheme administered by the British Business Bank, offering fixed-rate personal loans of £500 to £25,000 to entrepreneurs who want to start or grow a business in the UK. All loans carry a fixed interest rate of 6% per annum, making them significantly cheaper than most alternative lenders. Beyond the loan itself, the scheme provides free pre-application support, mentoring, and business planning assistance — making it particularly valuable for first-time founders. They have lent £1 billion+ to date, helping 115,000+ UK businesses.

Founded 2012 London (British Business Bank) The Start Up Loans programme is delivered by the Start Up Loans Company, a subsidiary of the British Business Bank, which is wholly owned by the UK government. Loans are regulated personal credit agreements under the Consumer Credit Act 1974 and FCA consumer credit rules.

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Products offered

Business Loans

Rates and costs

Rate range
6% – 6% (fixed annual interest rate — all Start Up Loans carry the same 6% p.a. rate regardless of credit profile)
Representative APR
6% APR fixed — the same rate applies to all borrowers
Amount range
£500 – £25,000
Approval speed
Application to decision: typically 4–8 weeks (includes business plan review and mentoring)

Representative example

Borrow £10,000 over 60 months. Total repayable: £11,600. Cost of credit: £1,600. Your rate depends on your circumstances.

Eligibility requirements

Minimum trading history
For start-ups: no trading history required. For businesses: must have been trading less than 36 months
Minimum turnover
No minimum turnover — designed for pre-revenue start-ups and early-stage businesses
Credit requirements
A personal credit check is performed on the loan applicant (the loans are personal loans to the founder, not the business). Applicants with severe adverse credit — such as recent bankruptcy, active IVAs, or undischarged debt management plans — may be declined. However, the scheme is intentionally designed to be accessible and minor historic credit issues are generally not disqualifying. Creditworthiness is assessed alongside the quality of the business plan.

How to apply

1

Check eligibility through Lendus — answer a few questions about your business and funding needs (2 minutes)

2

We compare Start Up Loans against 200+ other lenders to find the best match for your situation

3

Review your matched options — see rates, terms, and eligibility from multiple providers including Start Up Loans

4

Choose the best offer and complete the application with your matched lender directly

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Pros and cons

Pros

  • Fixed 6% APR — significantly lower than any alternative lender and competitive with many traditional bank loans
  • Government-backed — one of the most trusted and reputable funding sources for early-stage UK businesses
  • Free business planning support and mentoring included — valuable beyond just the money
  • No minimum trading history required — accessible to pre-revenue start-ups
  • Each business owner (director) can apply for up to £25,000 — multiple founders in the same business can each apply, up to £100,000 in total per business

Cons

  • Maximum of £25,000 per applicant — not suitable for businesses needing significant capital beyond this amount
  • The application process is long (4–8 weeks) and requires a detailed business plan — not suitable for urgent funding needs
  • Loan is made as a personal loan to the founder — personal credit is affected if the loan is not repaid
  • Available only to businesses that have been trading fewer than 36 months — established businesses cannot apply
  • Requires a UK National Insurance number — not accessible to non-UK residents or recent immigrants without NI

Is Start Up Loans right for you?

Best for

First-time entrepreneurs, pre-start and early-stage UK businesses (under 36 months trading) that need modest startup funding at the lowest possible interest rate. Particularly valuable for founders who also want structured business planning support and post-launch mentoring alongside the capital.

Not ideal for

Established businesses (over 36 months trading), businesses needing more than £25,000, or those requiring fast access to funds — the 4–8 week application process rules out urgent cash flow needs. Also not suitable for property-related ventures (property development or buy-to-let is excluded from the scheme).

Start Up Loans alternatives

If Start Up Loans isn't the right fit, consider these alternatives:

iwoca Funding Circle Tide

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Frequently asked questions about Start Up Loans

Is Start Up Loans legit?
Yes, Start Up Loans is a government-backed UK lending scheme operated by the Start Up Loans Company, a subsidiary of the British Business Bank — itself wholly owned by the UK government. The programme has been running since 2012 and has provided over £1 billion in funding to more than 115,000 businesses. It is regulated under the Consumer Credit Act 1974 and FCA rules, making it one of the most reputable and trustworthy funding options available to UK start-ups.
What are Start Up Loans interest rates?
Start Up Loans charge a fixed interest rate of 6% per annum — the same rate applies to every borrower regardless of credit profile, loan size, or business sector. This is a simple interest rate with no arrangement fees, no early repayment charges, and no hidden costs. The 6% APR makes Start Up Loans significantly cheaper than alternative lenders and competitive with traditional bank loans for new businesses.
Can I get Start Up Loans with bad credit?
Start Up Loans are intentionally designed to be accessible to entrepreneurs who may not qualify for traditional bank lending. Minor adverse credit history — such as a historic missed payment or a small satisfied CCJ — is not automatically disqualifying. However, the application does involve a personal credit check, and applicants with active insolvency proceedings, undischarged IVAs, or very recent bankruptcy are unlikely to be approved. The quality of your business plan is an important factor alongside credit history.
How much can I borrow from Start Up Loans?
Individual applicants can borrow between £500 and £25,000. If your business has multiple founders or directors, each person can apply separately for up to £25,000, meaning a business with four co-founders could collectively access up to £100,000. Loan terms run from 1 to 5 years. The amount offered depends on the viability of your business plan and your ability to service the repayments, not on your existing credit score.
Is Start Up Loans FCA regulated?
Yes. Start Up Loans are regulated personal credit agreements subject to FCA consumer credit rules and the Consumer Credit Act 1974. The Start Up Loans Company, as a subsidiary of the British Business Bank (a government-owned institution), also operates under the oversight of the Department for Business and Trade. The FCA regulation means borrowers have access to the Financial Ombudsman Service if they have a complaint.
How long does Start Up Loans take to approve?
The Start Up Loans process takes longer than commercial lenders — typically 4 to 8 weeks from initial application to receiving funds. This is because the scheme requires applicants to work with a delivery partner to develop a business plan and cash flow forecast before a credit decision is made. While this is slower than alternative lenders, the support provided during this process is itself valuable for new business owners.
Can I repay Start Up Loans early?
Yes, you can repay your Start Up Loan early at any time without penalty. There are no early repayment charges, and repaying early means you pay less total interest since interest is calculated on the outstanding balance. The loans are structured with fixed monthly repayments over the agreed term (1–5 years), but you can overpay or settle in full whenever you choose.
Start Up Loans vs iwoca — which is better for a new business?
For pre-start or very early-stage businesses, Start Up Loans is usually the better choice — the 6% APR is dramatically cheaper than iwoca's representative 49.9% APR, and the mentoring support adds significant value. However, Start Up Loans is only available to businesses under 36 months old and caps at £25,000 — for businesses that have been trading for a few months and need more than £25,000 quickly, iwoca is far faster (hours versus weeks) and can lend up to £500,000. The ideal path for many start-ups is to begin with a Start Up Loan and then graduate to iwoca or similar lenders as the business grows.

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