1. UK Start Up Loan Scheme (Government-Backed)
The UK Government’s Start Up Loans scheme is one of the most accessible company start up loan options. You can borrow up to £25,000 per director at a fixed 6% annual interest rate with up to five years to repay.
Benefits:
- Unsecured (no collateral required)
- Includes 12 months of free mentoring
- Suitable for businesses trading under 36 months
2. Bank Loans for New Companies
Major UK banks offer tailored start-up loan packages. Approval is typically based on your business plan, financial projections, and credit history.
Top options include:
- Barclays Start-up Loan
- NatWest Business Loan
- HSBC Small Business Finance
Be prepared to submit detailed documentation, and possibly a personal guarantee.
3. Online Business Lenders and FinTech Loans
Many startups prefer online lenders for their speed, flexibility, and simple application process.
Examples:
- Funding Circle
- Iwoca
- Capital on Tap
Typical features:
- Loans from £1,000 to £500,000
- Approval in 24–72 hours
- Suitable for limited companies, even with a short trading history
4. Personal Loans for Business Use
Some entrepreneurs fund their startup through personal loans, particularly when the business isn’t yet trading. While not specifically a business loan, it can offer faster access to funds.
Pros:
- Lower credit threshold
- No need for business trading history
- Fast approval from traditional banks or online lenders
Note: You are personally liable, so this method carries personal financial risk.
5. Community and Local Enterprise Loans
Community Development Finance Institutions (CDFIs) and regional enterprise agencies often provide funding and mentoring for underserved businesses.
Top sources:
- Fredericks Foundation
- Start Up Loans delivery partners
- Local Growth Hubs
Targeted at businesses with limited access to mainstream finance.
6. Equipment and Asset Financing
If your startup requires machinery, vehicles, or tools, asset finance may be more appropriate than a cash loan. This method spreads payments and is secured against the asset.
Advantages:
- Preserves working capital
- Easier approval for new businesses
- Flexible terms
7. Business Credit Cards or Overdrafts
While not long-term loans, business credit cards or overdrafts can provide initial capital for day-to-day operations. They’re best used for short-term or emergency funding needs.
Note:
Interest rates are often higher, so careful management is crucial.
Frequently Asked Questions
Can I get a company start up loan with bad credit?
It’s possible through CDFIs or alternative lenders, though interest rates may be higher. A strong business plan helps.
Do I need to have registered my company to apply?
Yes. Most lenders require a registered limited company or sole trader status and a UK business bank account.
What documents do I need to apply?
Typically: a business plan, financial forecast, proof of ID/address, and sometimes bank statements or a CV.
How fast can I get funding?
Online lenders: 1–3 days.
Government loans: 2–4 weeks.
Banks: 2–6 weeks depending on complexity.
Are start up loans taxable?
No. Business loans are not income, though interest is a tax-deductible expense.
Can I repay a start up loan early?
Yes. Most lenders allow early repayment, though some may charge a small fee.
Conclusion
Getting a company start up loan in the UK has never been more accessible. Whether you go through government-backed schemes, banks, online platforms, or local institutions, there’s a funding route to match your business model and financial goals. A strong plan, solid projections, and clear use of funds will increase your approval chances and set your business up for success.
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