The government-backed Start Up Loans programme offers £500 to £25,000 per applicant, fixed at 7.5%, over one to five years. It is an unsecured personal loan for business purposes, so the individual must repay it even if a limited company stops trading.
Section 01
What changed on 6 April 2026?
The fixed rate for new Start Up Loans increased from 6% to 7.5% a year. At the same time, the first-loan trading-age limit expanded from 36 months to 60 months. Older guides can therefore show the wrong rate and eligibility window.
The wider window may help established young companies that have trading evidence but remain too early for suitable mainstream borrowing. It does not remove the affordability or credit assessment, and approval is never automatic.
Section 02
Who applies and who owes the money?
The applicant must be at least 18, live in the UK with the right to work and be starting or running a UK-based business that meets the trading-age rule. The programme is intended for people unable to obtain suitable finance elsewhere. Personal creditworthiness and affordability are assessed.
The individual signs the credit agreement. If the funds are introduced into a limited company, the accounting records need to show the transaction correctly, but that does not transfer the lender’s claim to the company. The applicant remains personally responsible when the venture fails or they leave it.
Section 03
Amounts, term and support
An eligible applicant can borrow from £500 to £25,000 and choose a one-to-five-year term, subject to assessment. There is no application charge and no early-repayment fee. The scheme includes help with the business plan and cash-flow forecast plus up to 12 months of mentoring after the loan is made.
Business partners can each apply, but each application and liability is individual. Total Start Up Loans funding for one business is subject to a £100,000 lifetime cap. One approved founder does not guarantee that another will pass personal affordability and credit checks.
Section 04
What can the money support?
The business plan should connect the advance to startup or growth activity such as equipment, premises, stock, marketing or working capital. The programme publishes excluded activities and uses, so check the live eligibility rules before committing to a purchase.
Build the forecast from realistic unit economics and cash timing. The personal loan repayment is due even when customers pay late or the business has a quiet month. Keep adequate headroom outside the optimistic sales case.
Section 05
Personal-risk checklist
Treat the repayment as a household liability as well as a business cash-flow item. An entrepreneur may be comfortable with business risk but still need to protect rent, mortgage and family commitments.
- Can the payment be met if the business produces no owner income for several months?
- How will loan funds and repayments be recorded if money enters a limited company?
- Are multiple founders clear about their separate liabilities?
- Would a smaller first draw preserve useful personal borrowing capacity?
- What is the shutdown plan if trading assumptions fail?
Section 06
Compare before accepting
Compare grants, owner capital, supplier credit, asset finance and company borrowing where available. A Start Up Loan has a transparent fixed rate and no early-repayment charge, but personal liability may make a company facility preferable even at a different rate.
Use only the official application route. Avoid paying an intermediary for access to a programme that has no application fee, and verify any contact claiming to represent the scheme.
Sources
Primary sources and further reading
Facts and status were checked against the following sources on 13 September 2026. External pages can change. Worked examples use the assumptions stated alongside them.