Finding finance for your start-up can be difficult and overwhelming in a landscape of corporate, debt and equity financing. For those that have struggled to obtain financing elsewhere, a lesser-known option is to apply for a “Start-Up Loan“, a Government-backed personal loan available to individuals looking to start or grow a business in the UK.

As part of the British Business Bank, the Start-Up Loans programme offers finance and support for businesses who might struggle to access other forms of finance.

More than 100,000 businesses have been provided with over £800million of loans since the programme began. Applicants can apply to borrow up to £25,000, and if successful, the programme offers 12 months of free mentoring, support with writing business plans and cash flow forecasts. The loan comes with a fixed interest rate of 6% and can be repaid between 1 to 5 years.

Unlike personal loans from High Street Banks, the loan is unsecured, so there’s no need to provide any guarantees or offer any assets up for security. All owners or partners in a business can individually apply for up to £25,000 each, with a maximum of £100,000 available per business. You will then need to consider how you structure your business, running individually, as a partnership or through a limited company (or similar).

As part of the Star Up Loan’s mentoring scheme, borrowers have access to online support services, including business planning, forecasting and HR. The borrower will have contact with a mentor who provide an unbiased assessment of your current strategies, allowing you to make more informed decisions and gain access to knowledge and resources that might not otherwise be available. The Start Up Loan’s website is packed with advice for start-ups.

For more information on the Start Up Loan Programme, visit their website, or more information on other finance options offered by the British Business Bank visit their website here.

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Moorcrofts regularly acts for companies and individuals across a broad range of industry sectors. With a wide array of clients, from PLCs and household names to sole traders and partnerships, Moorcrofts has the expertise to advise on all aspects of corporate law including assisting businesses with setting-up, financing and scaling. For more information about Moorcrofts corporate services, visit our corporate services page or contact a member of the corporate team.