The loan (FAQs)

No. A grant is a non-repayable fund provided by an individual or an organisation for a particular purpose, whereas a Start Up Loan must be repaid in full over an agreed term of one to five years.

Start Up Loans are government funded and therefore would class as State Aid.

The assistance provided through Start Up Loans, like many Government-backed business support activities, is regarded as Subsidy or State aid.  This is because this assistance is supported by the Government and therefore gives an advantage to the business that receives it.

Subsidies and State aid can come in different forms and the giving of subsidies is governed by UK law under the Subsidy Control Act 2022. However, if your business is in scope of the Northern Ireland Protocol, European regulations on State aid will be relevant instead.

Determining whether your business is in scope of the Northern Ireland Protocol

As part of a loan application, you will need to complete the following questions which will assess if your business is potentially in scope of the Northern Ireland protocol:

• Is your business, or is it going to be, established or registered in Northern Ireland?
• If you have answered Yes to question 1, is your business:

1. involved in the manufacture or sale of goods? ^{Read footnote text 1} or
2. does it operate in the Northern Ireland Wholesale Electricity Market? ^{Read footnote text 2} ; or
3. do you have plans either to start manufacturing or selling such goods or to operate in the Northern Ireland Wholesale Electricity Market in the next three years)?

If the answer to any of the above questions is yes, then it is likely you are in scope of the Northern Ireland Protocol and your loan application will fall within the de minimis State aid regulations.

UK Subsidy Control Act 2022

If your business is not in scope of the Northern Ireland Protocol, your Start Up Loans application will be dealt with as a subsidy subject to the Minimal Financial Assistance provisions of the UK Subsidy Control Act 2022.

There is a maximum amount of subsidy (GBP 315,000) that you can receive over a rolling period of three fiscal years, and any Start Up Loan you receive will count towards that total. The rolling three-year period is calculated as the time elapsed in the fiscal year the offer date of your Start Up Loan falls in (commencing on 1 April), plus the previous two fiscal years preceding that year each ending on 31 March). During the application process, you must tell us the amount of any subsidies that you have received during that three-year period.

It is your responsibility to keep a written record of the amount of Minimal Financial Assistance you have received and the date/s when it was received. The written record must be kept for at least three years beginning with the date on which the Minimal Financial Assistance was given.

If your loan application proceeds to our later stages, then we will notify you in writing of the amount of Minimal Financial Assistance applicable to you, and to ask you to confirm that the statutory limits will not be exceeded.

You can find out more about the UK subsidy control regime at gov.uk/government/collections/subsidy-control-regime.

EU De Minimis Regulations

If your business is in scope of the Northern Ireland Protocol, your Start Up Loans application will be dealt with as De Minimis State aid subject to the EU De Minimis Regulations.

State aid is a European Commission term which refers to forms of assistance from a public body or publicly funded body, given on a discretionary basis to undertakings engaged in economic commercial activity, with the potential to distort competition in the European Union market by favouring one provider over another. Provision of such State aid is governed by regulations made by the European Commission.

De minimis State aid is a term used to describe small amounts of State aid that do not require European Commission approval. The total De Minimis State aid which can be given to a single recipient is EUR 300,000 over a rolling full three year period.  Lower limits apply if your new business is related to the primary production of agriculture, fisheries and/or aquaculture. De minimis State aid cannot be given to help establish a distribution network or for other expenditure linked to an export activity (and also cannot be used to fund certain activities within the fisheries and aquaculture sector as listed in Article 1, Paragraph 1 of European Commission Regulation (EU) 2023/2391).

It is the loan recipient’s responsibility to retain records of any State aid arising from assistance received for a minimum of ten years from the date of receipt and to ensure they do not exceed the rolling three full years limit.

If a loan recipient makes any other application to a support scheme which provides State aid during the next three years, they will be required to inform the operator of that scheme about the State aid received from Start Up Loans and any other applicable aid from other sources.

Should you be successful in your application, we will email you the value of the De Minimis State aid arising from your Start Up Loan.

You can find more information about State aid here or by visiting the EU Commission website.

• ^{Return to footnote location 1}

  The manufacturing and sale of goods would include the primary production of agricultural products or production, processing or marketing of fishery and aquaculture products.

• ^{Return to footnote location 2}

  This means the Northern Ireland/Ireland single Electricity market specifically in relation to the generation, transmission, distribution, or supply of wholesale electricity.

Finance is provided by way of a personal loan that is regulated under the Consumer Credit Act 1974. This means the loan is taken out in your name and not the name of your venture. The loan is repayable on a monthly basis for the duration of the term of the loan. The finance provided to you is not a grant.

We believe that it’s important for business owners to be personally invested in the success of their business, which is why Start Up Loans are structured as personal loans rather than business loans. By making individuals accountable for their loan repayments we seek to empower applicants to make the right decisions for themselves and their business, like how much to borrow and how the money should be used to achieve business goals.

To support applicants in making these decisions, we require all individuals to submit a Business Plan, Cash Flow Forecast and Personal Survival Budget as part of their application. These documents serve two purposes. Firstly, they help us better understand an individual’s personal and business needs to determine how we can best support them. Secondly, they help us make a lending decision by allowing us to assess an individual’s ability to repay the loan and the viability of their business plans.

Each individual can borrow between £500 and £25,000 at any one time. Please note if multiple business partners are each applying for a loan for the same business, a maximum of £100,000 may be lent that that business in its lifetime which may impact upon the amount you are personally able to borrow.

Additionally, if you successfully apply for a Start Up Loan then after you have made six full repayments you may be eligible to apply for additional finance for the same business in the form of a Second Loan. Find out more about Second Loans.

Our average loan size is between £5,000 and £10,000, but of course the final amount ultimately depends on the needs of individual, the type of business model and how you intend to use the money.

We are a government-backed scheme so all interest is reinvested in the scheme, meaning even more individuals and businesses can benefit from this affordable finance and support. At a fixed rate of 6% per annum, the interest is designed to be affordable compared to other mainstream lenders and the flexible loan term of one to five years gives our customers the ability to manage their monthly repayments in a way that makes most sense for them. Check out our Loan Calculator to figure out your potential monthly and total loan repayments.

No, there are no fees involved in either applying for or receiving a Start Up Loan, and no fees for the support we provide during and after the application process. Other than your monthly loan repayments, you will never be asked for any fees or other payments.

A secured loan is one that requires a guarantor or an asset, for example a property (also known as collateral) to secure the loan. In the event that a secured loan cannot be repaid, the company issuing the loan may take possession of the property or call on the guarantor to satisfy the outstanding balance.

In contrast, unsecured loans – like Start Up Loans – can be obtained without the use of a guarantor or collateral for the loan. However, please remember you are still contractually obligated to repay your Start Up Loan, no matter what the circumstances. Failure to meet your monthly loan repayments may result in formal action being taken, and will detrimentally affect your credit file, so it’s important to talk to your Finance Provider as soon as possible if you think you may encounter any difficulties.

You will find the details of your Finance Provider on your loan agreement once your application has been approved.

Yes, you can choose a loan term between one and five years depending on your affordability and preference. Please note, if you are in the UK on a visa, you will need to repay your loan and all associated interest at least six months prior to your visa expiry date. Regardless of your final agreed loan term, you will be required to make monthly repayments. Use our Loan Calculator to figure out what your potential monthly and total loan repayments would be based on different loan terms.

Start Up Loans are personal loans that are used to start a new business or grow an existing business that has been trading for less than 36 months. Your loan can be spent on a wide range of things related to your business, like equipment and stock, a premises, marketing and promotional expenses to name just a few. It’s important to note however that you must be able to describe your intentions for your loan within your business plan and cash flow forecast and explain how this will help you start and/or grow your business.

There are a few activities that cannot be funded with a Start Up Loan, including debt repayment, training qualification and education programmes or investment opportunities that do not form part of an on-going sustainable business. Please see our full eligibility criteria for more information on excluded business types and loan uses under the scheme.

Every individual can only apply for a Start Up Loan for one business, so if you own multiple business ventures you will only be able to access finance for one of them. However, if after successfully securing a Start Up Loan you later require additional funding in order to grow and develop that same business, you may be eligible to apply for a Second Loan.

You would need to go through a new application process and must have made at least six months of full loan repayments prior to applying. In addition, your total outstanding loan balance cannot exceed £25,000 at any one time. Please visit our page about Second Loans for more information on the full eligibility criteria and how to apply.

Unfortunately we’re unable to give advice on state benefit entitlements. Please talk to your Job Centre Plus for information.

The Start Up Loans Company administers the scheme, but does not directly provide loans to applicants. If your application is successful, your Loan Agreement and loan funds will be provided to you by either your Business Support Partner or one of our Finance Providers. The partner that distributes your loan will be your main point of contact for discussing the terms of your loan and any other matters related to your monthly repayments.

Yes, we offer a Sharia compliant finance product, which is independently administered through our Delivery Partner, Financing Sharia Enterprise. Please visit our Sharia compliant finance page for more information.