Who is eligible for a government Start Up Loan?

Full answer

The Start Up Loan is a government-backed personal loan delivered through the British Business Bank to help people start or grow a small business. Unlike most business finance it is a personal loan to the individual founder, so it is unsecured (no asset or guarantor needed) and the named borrower is personally responsible for repaying it. Eligibility criteria: you must be a UK resident, aged 18 or over, and have the legal right to work in the UK. The business must be based in the UK and either not yet trading or trading for less than 36 months. Each eligible business owner can usually apply, and a single business can have more than one founder each applying, subject to per-business and per-person limits set by the scheme. You will need a viable business plan and cash-flow forecast, and you must pass a credit and affordability assessment - a poor credit history or unaffordable existing debt can lead to refusal. How it works: the loan is repaid in fixed monthly instalments over a set term (commonly up to five years) at a fixed interest rate. Successful applicants also get free support such as mentoring and business-plan templates. The published loan amount range and the fixed interest rate are set by the scheme and change over time, so check the current figures on the British Business Bank's Start Up Loans site rather than relying on an old number. Who it affects: new and very early-stage founders, including sole traders and directors of new limited companies. Tax point for 2026/27: interest paid is normally a deductible business expense, reducing taxable profit - for a sole trader that lowers profits taxed through Income Tax and Class 4 NI (6% from GBP 12,570 to GBP 50,270, then 2%); for a company it reduces the Corporation Tax base. Use the self-employed-tax calculator to see how repayments and profit interact with your tax bill.

Try the calculator