1. Start Up Loans Scheme (British Business Bank)
The Start Up Loans Scheme offers government-backed personal loans to individuals aiming to start or grow a business in the UK.
- Loan Amount: £500 to £25,000 per individual
- Interest Rate: Fixed at 6% per annum
- Repayment Term: 1 to 5 years
- Additional Support: 12 months of free business mentoring and access to business planning resources(Swoop UK)
Eligibility requires applicants to be 18 years or older, residing in the UK, and planning to start a new business or have a business that’s been trading for less than 36 months.
2. Growth Guarantee Scheme
Launched in July 2024, the Growth Guarantee Scheme replaced the Recovery Loan Scheme to provide financial support to UK small businesses.
- Loan Amount: Up to £2 million per business group
- Guarantee: 70% government-backed guarantee to lenders
- Purpose: Supports a wide range of business purposes, including managing cash flow and investment in growth
The scheme is delivered through accredited lenders, and businesses must apply directly to these lenders.
3. Innovate UK Innovation Loans
For businesses focusing on research and development, Innovate UK offers innovation loans to support late-stage R&D projects.
- Loan Amount: Between £100,000 and £2 million
- Eligibility: UK-based businesses undertaking innovative projects
- Terms: Flexible repayment terms aligned with project timelines
These loans aim to support projects that have a clear route to commercialization and growth.
4. Community Development Finance Institutions (CDFIs)
CDFIs provide financial support to small businesses that may struggle to secure funding from mainstream lenders.
- Loan Amount: Varies by institution
- Support: Tailored financial products and local expertise
- Purpose: Assist businesses in underserved communities or sectors
Examples include BCRS Business Loans and ART Business Loans, which focus on supporting regional economic growth.
5. King’s Trust Enterprise Programme
The King’s Trust offers funding and support to young entrepreneurs aged 18 to 30.(Wise)
- Loan Amount: £500 to £25,000
- Additional Support: Business mentoring and training workshops
- Eligibility: Young individuals looking to start or grow a business in the UK(kingstrust.org.uk)
This programme is designed to help young people overcome financial barriers to entrepreneurship.
Frequently Asked Questions
What is the maximum amount I can borrow through government-backed startup loans?
Depending on the scheme, loan amounts can range from £25,000 under the Start Up Loans Scheme to £2 million under the Growth Guarantee Scheme.
Are these loans available to existing businesses?
Yes, several schemes cater to both new and existing businesses, including the Growth Guarantee Scheme and regional funding initiatives.
Do I need to provide a personal guarantee?
Requirements vary by scheme and lender. It’s essential to check specific terms with the lending institution.
How do I apply for these loans?
Applications are typically made directly through accredited lenders or the specific program’s website. Ensure you meet the eligibility criteria before applying.
Can I apply for more than one government-backed loan?
While it’s possible to apply for multiple schemes, eligibility and approval will depend on the specific terms and your business’s financial situation.
Conclusion
Navigating the landscape of UK startup business loans in 2025 offers various opportunities to secure funding for your enterprise. By understanding each scheme’s specifics and aligning them with your business needs, you can access the financial support necessary for growth and success.
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