Start Up Loans

April 2021

Bring your business dreams to life with a start up loan.

To find out what other early stage funding and savings opportunities are available to your business simply register here.

The Start Up Loans programme is a UK-wide, government backed scheme that offers a personal loan, up to £25,000 to those that have a viable business idea but no access to finance. All successful loan recipients are offered free mentoring and access to exclusive business offers.

About British Business Bank

Start Up Loans, a subsidiary of the British Business Bank, is a government-backed scheme designed to support businesses who struggle to access other forms of finance.  Whether you’re taking the first steps or have been trading for a while and looking to grow, a Start Up Loan can help you achieve your business goals.

Amount

Amount

£500-£25,000 
per co-founder

Term

Term

1-5 years

Cost

Cost

6%

Speed

Speed

This can vary but generally a month from start to finish

Purpose

Purpose

Start up a business

Suitable for

Suitable for

New businesses under 2 years old

A start-up loan is a business loan designed to help new businesses launch and grow. Like any other business loan, it’s a lump sum of capital that you pay back with regular repayments at a fixed interest rate.

Lenders will usually want to see details of:

  • your business plan
  • your turnover
  • your trading history (if you have any)
  • your founders
  • your projected earnings.

You might find, however, that your business doesn’t currently meet the lending criteria for a start up loan, if this is the case, create a Swoop account and speak to one of our advisors today.

Swoop Funding are part of a network of official Start Up Loans referral partners across the UK who signpost people to the scheme.  We do not provide any business support as part of this partnership, and will not charge you for anything related to Start Up Loans. We may receive a fee from Start-Up Loans Company if you subsequently obtain a loan having clicked on our link.

About Start Up Loans

If you’ve set up a new business and need some financial support to begin trading, you may be eligible for a Start Up Loan of between £500 and £25,000 to help you during the difficult early stages. This government-backed scheme is designed to assist new businesses. The loans take the form of unsecured funding and are designed to ensure your business starts trading on a solid footing, at a lower rate of interest than traditional lenders, while allowing you to retain ownership of the business.
There are a number of restrictions on eligibility for a Start Up Loan, and it’s important to know before applying whether your application is likely to succeed. With that in mind, we’ve compiled a list of frequently asked questions that should help you to understand whether you are entitled to a loan for your business.

Although most businesses types are supported by the scheme, there are several that are not eligible, including (but not limited to):
Illegal activities such as drugs, weapons and chemical manufacture; FCA-regulated activities such as banking and money transfer services; gambling and betting; pornography; charities; private investigators without the correct license; property investment; agents for third parties where your company does not receive the majority of the revenue it creates.
In order to be eligible for the government funding provided by a Start Up Loan, there are several other criteria that must be met:

  • You must be at least 18 years old
  • You must live in the UK
  • You must have the right to work in the UK
  • Your business must be based in the UK
  • You must prove that you were unable to acquire a loan from alternative finance provides
  • You must prove that you can afford the loan repayments
  • Your business must have been trading for no more than 24 months

Prior to your application, the funder will carry out a full credit check in order to ensure you can afford your loan. Although poor credit doesn’t necessarily disqualify you from being eligible for a Start Up Loan (all applications are assessed individually) it will be considered during the assessment process and, if the assessor is not satisfied that you will be able to afford the loan, your application may be rejected.

Prior to your application, the funder will carry out a full credit check in order to ensure you can afford your loan. Although poor credit doesn’t necessarily disqualify you from being eligible for a Start Up Loan (all applications are assessed individually) it will be considered during the assessment process and, if the assessor is not satisfied that you will be able to afford the loan, your application may be rejected.

Start Up Loans are not available to anyone subject to a Debt Management Plan. However, upon full repayment of any outstanding debts, your application can be considered.

The receipt of state benefits does not automatically make you ineligible for a Start Up Loan. For details of which state benefits you are entitled to while applying for a Start Up Loan, contact Job Centre Plus.

The UK’s visa system is divided into tiers based on the individual’s circumstances (e.g. reason for being in the UK, duration of stay), and eligibility for a Start Up Loan depends on which visa you have. If you are residing in the UK on any of the following visa tiers, you will not be eligible for a Start Up Loan.

  • Tier 1 (high-value migrants, all categories)
  • Tier 2 (skilled workers, all categories)
  • Tier 4 (students)
  • Tier 5 (temporary workers)
  • Domestic Workers on a Private Household
  • Representative of an Overseas Business

Other visa categories may be eligible, however if you require confirmation of your eligibility please visit the government’s visa website. If you hold an ancestry visa or a visa that states “no recourse to public funds”, you should be eligible for a Start Up Loan. It is important to remember that if your visa does make you eligible, your application must allow you to pay the loan back in full within 12 months of your visa’s expiration date.

Depending on the visa tier, you may be eligible for a Start Up Loan. Any individual with a tier 4 visa is ineligible as this visa does not allow self-employment, while a tier 1 Graduate Entrepreneur visa will not make you eligible as the duration of the visa is shorter than the minimum length of the loans available.

If you are looking to purchase a business that has been trading for more than 24 months, you could still be entitled to a Start Up Loan provided you have not owned the business for more than 24 months.

When filing your application, you will need to provide a copy of the business’ accounts, and if the business is operating at a loss (or has previously operated at a loss) your business plan must include details of how you expect to ensure a level of business growth that will lead to the company turning a profit.

As Start Up Loans are only available to businesses that have been trading for less than 24 months, it is important to know exactly when your business became operational. An operational business is considered to be a business that is buying/selling goods or providing services and generating regular revenue. Any business prior to this point – for example research or market testing – that does not generate revenue does not need to be taken into consideration.

If your business exports goods to other countries, you will be eligible for a Start Up Loan provided the business meets the following criteria:

  • A UK registered company, or registered in the UK for tax purposes
  • Operates from the UK
  • More than half of your revenue remains in the UK

You do not need to be registered with HMRC or Companies House prior to applying for a Start Up Loan if you have not yet started trading. It is worth remembering, however, that you should register with both before you begin trading and may be subject to fines if you do not do so.

Up to four partners from the same business can apply for loans, with a maximum of £100,000 available to any individual business. However, if multiple partners from the same business wish to apply for a Start Up Loan, they must all apply through one Delivery Partner – the organisation that assesses applications and provides support for successful applicants.
Partners must apply for loans separately, as the assessment process is carried out on an individual basis that considers each person’s ability to pay back their personal loan, with separate credit checks carried out on each individual rather than the business. You are, however, entitled to put forward the same business proposal and cash flow forecast.

Don’t waste time – there are plenty of funding and saving
solutions to help your business grow

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