Start Up Loans: How to apply

Are you ready to fund your business without a loan or do you have a startup in its early stages? Then you need to consider a loan from Start Up Loans, the government-backed scheme that has already lent over £540m to UK small businesses.

Start Up Loans allows you to borrow up to £25,000 over one to five years, with a fixed interest rate of 6% and no early repayment fees. You’ll also get 12 months of mentoring.

Over the last eight years, the scheme has helped major UK startups like Cornerstone, Bird & Blend Tea Co., and City Pantry to get off the ground.

This guide will tell you exactly how to apply for a loan, and explain what to do to stand the best chance of success, and offer tips from those who have been there and done it.

What is a Start Up Loan?

The government-backed Start Up Loans scheme started in 2012, and has already had a huge impact – with nearly 68,000 businesses supported to the tune of £543.8m at the time of writing.

Part of the British Business Bank, Start Up Loans backs an average of 31 businesses each day, with an average loan amount of just over £8,000. The programme operates across a wide range of sectors, and has kickstarted everything from a mermaid academy to a true crime museum.

It also prides itself on helping those who may find it challenging to get finance elsewhere, with 35% of loans going to people who were previously unemployed, and 20% going to BAME applicants.

It’s not surprising that the scheme is so popular – after all, it’s explicitly aimed at helping new businesses succeed. The benefits include:

• An easy-to-understand fixed interest rate of 6%
• Borrow up to £25,000
• No early repayment fees
• Flexible repayment terms of one to five years
• 12 months of free one-to-one mentoring for those accepted

How to apply for a Start Up Loan

Unlike some other finance routes, applying for a Start Up Loan is clear and straightforward – but there are a few things that you should keep at your fingertips to speed up the process.

What you need before you start your application

The things you need to apply for a start up loan can be easily split into two categories – personal information, and documents related to your business (or proposed business).

In terms of personal information, you’ll need:

• Your National Insurance number
• Details of your accommodation history (i.e. the addresses of the places you’ve lived) for the last three years
• Your bank account number and sort code (for a credit check)
• Accurate details of your pre-tax income (including benefits) and employment status

For your business/proposed business, you’ll need:

• A business plan (check out our great business plan template)
• A cash flow forecast (find a helpful cash flow template on the Start Up Loans site)
• A personal survival budget (you can use the Start Up Loans personal survival budget template to help you)

Got all that? Then let’s get started.

Apply for a Start Up Loan

Step 9: Your business information

The next few screens are all focused on your business. You’ll need to submit more details about your business/proposed business, and upload those three all-important documents – your business plan, your cash flow forecast, and your personal survival budget.

Start your application

And that’s it – your application is done! Here’s a quick recap of the steps:

1. Confirm eligibility
2. Personal details
3. Contact information
4. General information
5. Residential information
6. Delivery partner allocation
7. Your start up loan
8. Your personal bank information
9. Your business information (including business plan, cash flow forecast, and personal survival budget)

What happens after your Start Up Loans application is complete?

Once you’ve submitted your application, you should be contacted by Start Up Loans or a delivery partner within 2-3 days.

Once this process has begun, it’s difficult to say how long it will take, as it depends how much support and guidance you require – it could be as little as two to three weeks, or over three months for applicants who require extensive assistance.

Delivery partners

While Start Up Loans oversees the whole process, it’s the delivery partners who will be your crucial point of contact once you’ve completed your application, and who will ultimately decide whether your loan is approved.

There’s a full list of delivery partners on the Start Up Loans website, but they’re organisations that often operate in a specific region or sector, and have experienced business advisors that can support you during the process. They’ll help you refine your business plan, cash flow forecast, and personal survival budget for the best chance of success, and will also arrange mentoring services if you’re successful.

During the application process, you’ll have the option to pick your preferred delivery partner. If you don’t, then you’ll be assigned to one that matches your area/sector. You can’t change your delivery partner once the process has started, so if you have a preference, make sure to indicate this.

Apply for a Start Up Loan today

There’s no doubt that a Start Up Loan can make a huge difference to your business. This government-backed scheme has already helped to kickstart nearly 68,000 businesses, and is committed to helping UK startups, with expert support, flexible terms, a fixed interest rate of 6%, and 12 months of one-to-one mentoring for all accepted applicants.

We’ve gone through the straightforward application process, and discussed how you’ll get help putting together your business plan, cash flow forecast, and personal survival budget. You’ve got insight from those who’ve been there and done it, as well as an idea of what other options are out there.