For new businesses
Start-Up Business Loans
Start-up business loans are loans for businesses that have been trading for less than two years, or haven't started yet. Because there's little trading history to go on, lenders look closely at your business plan, cash flow forecast and personal credit.
Funding Plus helps new businesses find the right start-up funding, from the government-backed Start Up Loans scheme to private lenders and asset finance.
- Options from day one of trading
- Government-backed and private lenders
- Help preparing your application
Reviewed by the Funding Plus team · Last updated October 2026
Step 1 of 3 · Start-Up Business Loans
How much do you need?
Takes about a minute. No impact on your credit score.
Start-Up Business Loans at a Glance
- Amounts
- £500 – £250k
- Terms
- 1 – 5 years
- Decision
- 1 – 4 weeks
- Security
- Usually none
- Best for
- Under 2 years trading
Typical figures across the market. Your offers depend on your business, the lender and the security available.
How Start-Up Business Loans Work
- 1Prepare your planA short business plan and 12-month cash flow forecast make a big difference.
- 2Tell us about your businessWhat you need, how long you've traded and any income so far.
- 3We match you with start-up lendersIncluding the Start Up Loans scheme and lenders that fund young businesses.
- 4Apply and get fundedStart-up loans can take longer, as lenders review your plan in detail.
How Much Do Start-Up Business Loans Cost?
Start-up lending is higher risk for lenders, so private start-up loans tend to cost more than loans to established businesses. The government-backed Start Up Loans scheme offers a fixed rate, which is often the cheapest option for new businesses.
- Interest, fixed on most start-up loans
- Few or no arrangement fees on the Start Up Loans scheme
- Personal guarantees on most private loans
- Asset finance for equipment can be cheaper than a loan
Worked example
A £15,000 start-up loan over 5 years
- Loan amount
- £15,000
- Interest rate
- 6% a year, fixed
- Monthly repayment
- £289.99
- Total interest
- £2,400
- Total repayable
- £17,400
Illustrative only. 6% is the fixed rate the Start Up Loans scheme has charged. Check current terms with the British Business Bank.
Who Can Get Start-Up Business Loans?
- A UK-based business that is new or under 2 years old
- Over 18 and a UK resident
- A business plan and cash flow forecast
- A personal credit history the lender can accept
- For Start Up Loans: no existing Start Up Loan in your name
What You'll Need to Apply
- Business plan
- 12-month cash flow forecast
- Personal bank statements and ID
- Any trading records so far
Pros and Cons of Start-Up Business Loans
Advantages
- Funding available before you have trading history
- Government-backed loans come with free mentoring
- Fixed repayments help early budgeting
- Builds a credit history for future borrowing
Things to watch
- Smaller amounts than for established businesses
- Start-up loans are often personal loans, so you're personally liable
- Lenders scrutinise your plan closely
- Private start-up lenders can be expensive
Start-Up Funding Options
Start Up Loans scheme
Government-backed personal loans for business purposes, with a fixed rate and free mentoring.
Private start-up lenders
Online lenders that fund businesses from around 6 months' trading.
Asset finance
Spread the cost of equipment or vehicles, using the asset as security.
See asset financeGrants
Free money from local councils and regional schemes, if you qualify.
Start-Up Business Loans vs Other Options
| Option | Best for | Typical speed | Security |
|---|---|---|---|
| Start-up business loan | New businesses | 1 – 4 weeks | Usually none |
| Small business loan | Businesses with 6+ months' trading | 1 – 7 days | Usually none |
| Asset finance | Buying equipment or vehicles | Days | The asset |
| Merchant cash advance | New shops taking card payments | Days | None |
Who Uses Start-Up Business Loans?
Start-up loans are used across every sector, most often for first equipment, stock and working capital.
Customer story
“[Real customer story for Start-Up Business Loans: what they needed, how quickly it was arranged and what it let them do.]”
[Name], [Role], [Business name] · [Amount] start-up business loan
Start-Up Business Loans FAQs
Can I get a business loan with no trading history?
Yes. The Start Up Loans scheme lends to businesses before they start trading, and some private lenders fund businesses from day one if you have a strong plan.
What is the Start Up Loans scheme?
A government-backed scheme run by the British Business Bank. It offers personal loans for business purposes with a fixed rate and 12 months of free mentoring. Check current limits and rates on the British Business Bank website.
Do I need a business plan?
For most start-up lenders, yes. A clear plan and cash flow forecast are often what gets a new business approved.
Will my personal credit matter?
Very much. With little business history, lenders rely heavily on your personal credit record.
Are there grants instead of loans?
Some, mostly local and sector-specific. Grants are competitive and rarely cover everything, so many start-ups combine a grant with a loan.
Related Guides
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