Start Up Loans UK, £500 to £25,000 at 7.5% fixed
A Start Up Loan is the cheapest unsecured money most new UK businesses can get: £500 to £25,000 at a fixed 7.5% a year over 1 to 5 years, with 12 months of free mentoring. The catch is that it is a personal loan with a personal credit check, so you carry the debt, not the company.
Figures checked 1 November 2026 against the British Business Bank and business.gov.uk. Correction: earlier versions of this guide gave the rate as 6% and the age limit as 36 months. The published terms are 7.5% and less than 5 years (60 months).
Start Up Loans at a glance
- Amount:
- £500 to £25,000 per person
- Per business:
- up to £100,000
- Interest:
- a fixed 7.5% a year
- Term:
- 1 to 5 years
- Business age:
- less than 5 years (60 months)
- Support:
- 12 months of free mentoring
- Fees:
- no application fee and no early repayment fee
- Security:
- none; it is unsecured
What a Start Up Loan is
Start Up Loans are government-funded personal loans for business purposes, provided by the Start-Up Loans Company, part of the British Business Bank. They exist for founders who struggle to borrow from a bank because the business has no track record, no assets to offer as security, or no profit yet. You do not put your house up as security, but you are personally liable for the repayments.
Who can apply
- You are 18 or over and live in the UK.
- You have the right to work in the UK.
- You are starting a business, or yours has traded for less than 5 years (60 months).
- The business is, or will be, based in the UK.
Most business types qualify. Excluded activities include property investment, banking and money transfer services, gambling; the Start Up Loans website publishes the full list.
What the repayments look like
Monthly repayments at 7.5%, using standard monthly amortisation. The Start-Up Loans Company's own figure may differ by pennies.
| Amount | 1 year | 3 years | 5 years |
|---|---|---|---|
| £5,000 | £433.79 a month£205.45 interest | £155.53 a month£599.12 interest | £100.19 a month£1,011.38 interest |
| £10,000 | £867.57 a month£410.89 interest | £311.06 a month£1,198.24 interest | £200.38 a month£2,022.77 interest |
| £25,000 | £2,168.94 a month£1,027.23 interest | £777.66 a month£2,995.60 interest | £500.95 a month£5,056.92 interest |
Worked example: £10,000 over 5 years
- Monthly rate: 7.5% ÷ 12 = 0.625%.
- Monthly repayment over 60 months: £200.38.
- Total repaid: £200.38 × 60 = £12,022.77.
- Interest: £12,022.77 − £10,000 = £2,022.77.
For comparison, the same £10,000 over 5 years at 15%, the middle of our partner's unsecured panel range, costs £237.90 a month and £4,273.96 in interest: £2,251.19 more. That gap is why a founder who qualifies should apply for a Start Up Loan before anything else.
How to apply
- Submit the short online application on the Start Up Loans website.
- You are paired with a business adviser who helps you finish the full application.
- Prepare a business plan and a cash flow forecast. These carry most of the weight.
- The Start-Up Loans Company runs a personal credit check, valid for 90 days; if the application runs longer, it is repeated.
- If approved, the money is paid to you personally and the mentoring starts.
Applications are free and go direct. Anyone charging a fee to “secure” a Start Up Loan for you is not part of the scheme.
Start Up Loan or business loan?
A Start Up Loan wins on price for anyone eligible. It loses on size and speed: £25,000 per founder and a timeline measured in weeks. A business that has traded for more than five years, needs more than £100,000, or needs money this month is looking at a commercial loan instead, possibly under the Growth Guarantee Scheme, which supports facilities up to £2m with a 70% government guarantee to the lender. Compare the costs in our business loan calculator.
When not to take one
Do not borrow because the rate is low. A personal loan for a business that fails is still yours to repay, and default can end in a County Court Judgment against you. If the plan does not show the business covering £200.38 a month on a £10,000 loan from its own takings within the first few months, borrow less or wait.
Trading over five years or need more than a Start Up Loan?
One enquiry reaches our partner's panel of more than 200 UK lenders. A specialist calls you back, Mon to Fri, 9am to 5:30pm.
Funding enquiries are handled by our specialist commercial finance partner. We may receive a commission; it never changes the rate you are offered. Finance is subject to status.
We do not arrange Start Up Loans; apply direct through the Start Up Loans website. Our partner handles commercial loans, card-sales funding and asset finance.
Questions people ask
What is the Start Up Loan interest rate in 2026?
A fixed 7.5% a year, set for the life of the loan, according to the British Business Bank and business.gov.uk (checked 1 November 2026). Older guides, including earlier versions of this one, quote 6%; that figure is out of date.
Who is eligible for a Start Up Loan?
You must be 18 or over, live in the UK with the right to work here, and be starting a business or running one that has traded for less than 5 years (60 months). The business must be UK based. Some activities are excluded, including property investment, banking and money transfer services, gambling.
Is a Start Up Loan a personal loan?
Yes. It is an unsecured personal loan for business purposes, so you, not the company, owe the money. Missed payments can bring charges, a County Court Judgment or a debt collection referral, and they affect your personal credit file.
Can I get a Start Up Loan with bad credit?
Possibly, but it is not a bad credit product. The Start-Up Loans Company runs a personal credit check, valid for 90 days, and a recent default or unsatisfied CCJ can sink an application. A thin file with no borrowing history is less of a problem. If you are declined, a CDFI lending £25,000 to £250,000 is the usual next step.
How long does a Start Up Loan take?
The British Business Bank says you could have the money within a month if your plan and cash flow forecast are ready; it can take a lot longer if the plan needs work. It is the slowest route on this site, so do not rely on it for an urgent bill.
Can two founders both get a Start Up Loan?
Yes. Because each loan is personal, every partner or founder can apply for up to £25,000. A single business can receive up to £100,000 in total.
Are there fees or early repayment charges?
No: there is no application fee and no early repayment fee. Paying it off early saves the interest you would otherwise have paid.
Sources
Every figure on this page comes from the lender's or scheme's own published page, read on 1 November 2026. Panel rate ranges come from our partner's lender-panel catalogue, checked 1 September 2026. We do not use comparison sites as sources.