British Business Bank Start Up Loans
Start Up Loans is the UK government-backed scheme for pre-revenue and very-early-stage founders, run by the British Business Bank. £500 to £25,000 personal unsecured loan to the founder (not the company), 6% fixed interest, 1 to 5 year term, free 12-month mentor included. Applications go through appointed delivery partners. The scheme fills the lending gap below where commercial SMB lenders engage.
Headline terms
When Start Up Loans is the right answer
- Pre-revenue or sub-36-month trading: no commercial alternative engages cleanly at this stage
- Sub-£25k cash need per founder: above this, you stack founders or look at commercial routes
- Founder personal credit is clean (no recent unsatisfied CCJs, no current bankruptcy)
- You want a free mentor (12-month allocation, valuable for first-time founders)
- You can carry the loan personally without the business needing to repay you directly (cleaner balance-sheet optics)
When to skip Start Up Loans
- Trading over 36 months: out of scope, route to commercial lenders
- Need over £25k per founder and team is solo: commercial route is the only option
- Founder credit issues: address before applying or route to specialist post-decline lenders
- Innovation / tech business that should raise equity: SEIS or EIS is cheaper than 6% debt for early R&D-heavy businesses
- Existing Start Up Loan in repayment: a second loan is not permitted; the first must be cleared
FAQs
What is the British Business Bank Start Up Loans scheme?
Start Up Loans is a UK government-backed scheme operated by the British Business Bank. It offers personal loans of £500 to £25,000 to founders of pre-revenue and very-early-stage UK businesses, at a fixed interest rate of 6.0% per annum, over a 1 to 5 year term. The loan is personal to the founder (not the company), so it does not show on the limited company's balance sheet but the founder is personally liable.
Who is eligible for a Start Up Loan?
UK residents aged 18 or over, with a UK business that is either pre-trading or has been trading for less than 36 months. The business can be a limited company, partnership, LLP, sole trader, or community interest company. Pre-revenue start-ups qualify; the scheme is specifically designed for the very-early-stage gap that mainstream lenders do not engage with. Bankruptcy applicants are excluded; CCJs and personal credit issues are reviewed case by case.
How does the Start Up Loan application work?
Applications go through one of the British Business Bank's appointed delivery partners (BizBritain, Transmit Startups, GC Business Finance, X-Forces, others depending on region and sector). Each delivery partner runs its own application portal but the underwriting standards are uniform. Process: registration, business plan and cashflow forecast, personal credit check, mentor allocation, decision (typically 4 to 8 weeks end to end). Free 12-month mentoring is included as part of the scheme.
What does the £25,000 cap mean for me?
The £25,000 cap is per founder, not per business. A founding team of two can each apply, taking the company's total Start Up Loan funding to £50,000. A team of four could reach £100,000. Each founder applies separately, each is personally liable for their own loan, and each has their own affordability assessment. Multiple loans to the same founder are not permitted; a second Start Up Loan requires the first to be fully repaid first.
Is the interest rate really fixed at 6%?
Yes, 6.0% per annum fixed for the term, set centrally by the British Business Bank. This is below the rate most pre-revenue founders could get from a commercial lender (often there is no commercial option at all for pre-revenue businesses). The fixed rate is one of the strongest reasons to consider Start Up Loans rather than personal credit cards or personal loans for business purposes.
I was declined for a Start Up Loan, where else can I look?
Start Up Loans declines usually fall into one of five buckets: (1) business trading over 36 months (out of scope), (2) personal credit issues (unsatisfied CCJs, recent missed payments), (3) business plan inconsistencies, (4) right-to-work or residency issues for the founder, (5) sector exclusion. Each has a different alternative: post-36-month traders route to iwoca, Capify, or asset finance; credit issues route to specialist post-decline lenders; business-plan issues are usually a rework-and-resubmit rather than a different lender; SEIS or angel routes can work for pre-revenue innovation businesses that need equity rather than debt.
Does FundBiz route applications to Start Up Loans?
No, not directly. Start Up Loans is a personal loan scheme run via designated delivery partners; we are a comparison and introducer service for limited company SMB finance. Where a founder approaches us for finance and the appropriate route is Start Up Loans (pre-revenue, sub-36-month, under £25k), we surface the scheme and link to the British Business Bank delivery-partner directory.
How does Start Up Loans compare to the Growth Guarantee Scheme?
Different products entirely. Start Up Loans is a personal unsecured loan of £500 to £25k to founders of pre-revenue or very-early-stage businesses at a fixed 6% rate. Growth Guarantee Scheme is a guarantee structure for commercial facilities of £25,001 to £2m to established UK SMEs via accredited lenders. Start Up Loans serves the gap below where GGS-accredited lenders engage.
Declined by Start Up Loans Company and need to route elsewhere? See our post-decline routing guide. Or use the eligibility checker if you are past the 36-month trading window and need a commercial route.