Start Up Loans: How to apply

Step 1: Confirm eligibility

To start, all you need to do is click a few boxes to confirm that your business is (or will be) based in the UK, you are a UK resident, you have the right to work in the UK, and that your business has been trading for less than two years.

If you’re confused about this last bit, Start Up Loans are aimed at businesses in their early stages, so if you’ve been trading for two years or more, you won’t be eligible.

The exact definition of ‘trading’ can vary, but HMRC cites the following activities as examples of trading:

• Carrying on a business activity, such as a trade or professional activity
• Buying and selling goods with the aim of making a profit or building up a surplus
• Providing services
• Earning interest
• Managing investments
• Receiving any other income

Step 2: Personal details

Nothing too taxing here – just enter your title, name, date of birth, personal email, and mobile number. One thing to note is that your name must be the name on your passport/driving licence, so if you’re not sure, make sure you dig those out to check you’re entering the correct information.

Once you’ve done this, you’ll be sent a link to confirm your email address. Log into your personal email, click the link, and set up a password.

Once you’ve done that, you’ll be ready for the next step.

Step 3: Contact information

Now that you’ve registered, you can start the application proper. First, enter your title, name (make sure it matches your passport/driving licence again), personal email, and mobile number (these fields should be pre-filled for you, so just check that they’re correct). If you’ve ever been known by another name, then fill in those details too.

Step 4: General information

A bit more info needed here, but nothing too complicated.

Here’s everything you’ll need to fill in for this step:

• Date of birth
• Gender (“Non-binary” and “prefer not to say” are available options)
• Marital status
• Ethnic background
• National Insurance number (This will be on your National Insurance number card, any communication from the Department of Work and Pensions, or certain official work documents, such as a P45)
• Current employment status
• Nationality (as shown on passport)
• Highest academic qualification
• Gross (pre-tax) annual income, including benefits
• Whether you have any unspent criminal convictions

Step 5: Residential information

Now, fill in your residential status (whether you’re a tenant, you own your home etc.) and input your postcode to find your address with the address finder.

Enter the month and year you moved into the address, then click “save and continue”.

If you’ve been living at that address for less than three years, then you may need to repeat this step for previous addresses, entering the month and year for both moving in and moving out.

Step 6: Delivery partner allocation

For more on this, see below.

This step is pretty simple – just click the boxes to confirm the following:

• Whether you are currently participating or have ever participated in the New Enterprise Allowance scheme
• Whether you or an immediate family member work or have ever worked for the British Armed Forces or Emergency Services (police, medical, or rescue)
• Whether your business is in the fashion sector

Step 7: Your Start Up Loan

Now we move on to the credit check. First, you’ll need to enter your desired loan amount, and choose over how many years you want to repay the loan. Don’t worry, you can change these amounts later, but the credit check still needs an idea of your desired loan terms.

Step 8: Your personal bank information

Now you need to enter the details for your personal bank account, specifically the account number and sort code. These will be displayed on your bank statements (if you still receive these by post), or should be accessible through online banking.

Make sure you also tick the box to indicate whether your personal account is a joint account, and tick the consent box at the bottom.

Start Up Loan benefits

Underlining the company’s commitment to kickstarting UK business, a business loan from Start Up Loans includes some great benefits:

• An easy to understand fixed interest rate of 6% – Unlike many providers, Start Up Loans offers the same rate to all applicants, and the interest is fixed at 6% for the duration of the loan.
• Borrow up to £25,000 – So that it can cater to a wide range of business needs, Start Up Loans lets you borrow any amount from £500 to £25,000. As a Start Up Loan is a personal loan rather than a business loan, multiple individuals can also apply for their own loan for the same business, with a limit of £100,000 per business.
• No early repayment fees – Should your business take off, you can pay the loan off early without having to pay any extra fees, letting you be free of debt and able to grow your business more rapidly.
• Flexible repayment terms of one to five years – Not every business grows at the same rate, and everyone’s financial circumstances are different. This is why a Start Up Loans business loan can be taken out for up to five years (and easily repaid early too).
• 12 months of free one-to-one mentoring for those accepted – This really sets Start Up Loans apart from some other lenders – everyone who is accepted gets 12 months of one-to-one support from an experienced business mentor.

Start Up Loan benefits: a case study

Michael Cordova, along with his wife Tina, founded the Floating Point Float Centre – Berkshire’s only dedicated flotation therapy centre. He got his company off the ground with two loans from Start Up Loans. After opening in 2015, the company is now helping a range of clients improve their physical and mental wellbeing, with notable users including Olympic athletes and members of the GB running team.

“In the beginning we applied for £10,000, which we used towards our rent deposit to secure the property – as a brick and mortar business, this was particularly important. We had the perfect property in terms of size and location. The start-up loan gave us security, and allowed us to move forward with our exciting plans. After a year, we applied for additional funds of £6,000 to help with marketing and growing the business. The cash injection helped us to grow by 10% in 6 months.

“The start-up loans application process was fairly straight forward. We registered online, then had to complete an application form. Because our business was so unique at the time, I had to have two face to face interviews to ascertain whether the business was viable.

“The third step is finalising the business documents: we had to provide a business plan, five-year cash flow forecast, and personal survival budget as part of the application. I then spoke to a business advisor before the loan was approved. We also received 12 months of one-to-one business mentoring, which really helped at the start when we needed marketing advice and support.”

And Michael has a few pearls of wisdom for anyone thinking of applying for a Start Up Loan:

• Research is vital – the more you know about the industry you are entering, the better. Focus on your competitors, and make sure you can clearly explain the product or service you wish to offer. This should be an integral part of your business plan.
• Know your target audience – you don’t just need to know what your product is – you need to know who it will appeal to. Social media is a great way to go about this, as is creating a temporary landing page to gauge interest in your product or service.
• Be realistic with your cash flow forecast – use the template provided by the Start Up Loans company and produce a 5-year plan that includes all costs and a contingency fund for those challenging early days.
• Identify exactly what you need the money for – we had an idea when we applied, but didn’t factor in additional costs. We then had to apply for a second Start Up Loan as a top up, which cost us more in interest in the long run.

And, finally, if you’re accepted:

• Maximise mentoring – make the most of the time with your business adviser – they are an invaluable source of advice that will help your business grow.