Unlocking Your New Business’ Potential: With a Start Up Loan
In the world of entrepreneurship, securing new business funding is often of one of the most daunting hurdles for new business owners. If you’re in the UK, a Start Up Loan could be the financial boost your business needs to get off the ground and running. This government-backed initiative is designed to provide funding to start-up and early-stage businesses, and understanding the process can help you decide if this is the right option for you.
What is a Start Up Loan?
A Start Up Loan is a government-backed personal loan available to individuals looking to launch or grow a business. Managed by the British Business Bank and distributed through a network of approved lenders, start up loans offer more than just capital. They come with a range of support to increase your chances of success.
Main features
Business Funding: All owners or partners in a business can borrow between £500 and £25,000, with a maximum of £100,000 available per business. This can be used to cover anything from equipment and stock, to marketing, to working capital.
Interest rate: It has a fixed interest rate of 6% per annum – notably lower than many traditional loan options making it a cost-effective choice for a new business.
Repayment term: Loans are repayable over 12 to 60 months. The repayment schedule is flexible, allowing you to choose a plan that aligns with your business’ cash flow and financial projections.
Support: Alongside financial support, Start Up Loans include free business support designed to help you refine your business strategy, navigate challenges and increase your likelihood of success.
Eligibility
To be eligible for a Start Up Loan, you must:
Be aged 18 years or over
Be a current UK resident
Have a clear business proposal
Believe you are likely to be refused a business loan
Have a business ready to launch, or have been trading for up to 36 months (under 3 years)
Not currently subject to a bankruptcy, an IVA (Individual Voluntary Arrangement) or a DRO (Debt Relief Order)
Have the right to live and work in the UK for the duration of the loan term (a valid and in date Visa will be required for non-UK residents)
What next? – The Application Process
There are several steps involved in applying for a Start Up Loan:
Prepare your business plan
Your business plan should outline your business idea, market research, financial projections, and how you intend to use the loan. Need help creating a business plan? Use our easy template to make sure you have all your bases covered by heading over to our Free Business Resources page.
Find a lender
You can apply through the Start Up Loans website or contact us at Let’s Do Business Finance directly (we are a regional provider of the British Business Bank’s Start Up Loan Scheme, covering the Southeast and East of England). The application process is simple, involving filling out a form, providing documentation and speaking to the team to find out more about your business goals.
Support for your business
Once approved, you’ll receive both the loan, as well as be assigned a Business Advisor who will provide valuable guidance as you launch and grow your business.
Managing your loan
After receiving the loan, it’s important to manage it effectively. Make sure you use the funds, maintain accurate financial records, and adhere to your repayment schedule.
Find out more about the application process for a Start Up Loan.
A Start Up Loan is a powerful tool for small businesses in the UK. With low interest rates, flexible repayments terms, and support to grow your business, it allows both financial and strategic assistance to turn your business idea into a reality! If you are preparing to start a new business and need funding, a Start Up Loan could be a significant step towards achieving your goals.