Start-up business loans: finance to launch and grow your new business

Yes, but options are limited compared to established businesses. The main routes are: the government-backed Start Up Loans scheme (up to £25,000 per director, fixed 6% APR, available to businesses under 2 years old); specialist new-business lenders who consider applications with 6+ months' trading; asset finance for specific equipment purchases (available from day one); and personal loans used for business purposes. We will map the options available to you based on your trading age, personal credit, and business plan.

For most commercial lenders considering a new limited company, at least one company director will need to be a homeowner and willing to provide a personal guarantee. Lender and product requirements vary, and meeting these criteria does not guarantee approval. The government-backed Start Up Loans scheme is a personal-loan route with different eligibility requirements.

The Start Up Loans scheme is a government-backed lending programme delivered through the British Business Bank. It offers personal loans of £500 to £25,000 per director (up to £100,000 per business entity) at a fixed interest rate of 6% per annum, with repayment terms of 1–5 years. Loans come with 12 months of free business mentoring. The scheme is designed for businesses that cannot access mainstream bank lending due to limited trading history. Sorbus Finance can guide eligible businesses through the application process.

For a brand-new business (under 12 months), borrowing options are mainly through the Start Up Loans scheme (up to £25,000 per director), personal loans applied to the business (typically up to £25,000–£50,000 depending on personal credit), or asset finance (where the asset value determines the loan amount). For businesses with 12–24 months' trading and demonstrable revenue, specialist lenders may advance up to £50,000–£100,000 unsecured. The right amount depends heavily on the business's ability to service the debt from trading cashflow.

Yes, for most start-up lending routes. The Start Up Loans scheme requires a detailed business plan and cash flow forecast as part of the application. Specialist new-business lenders also want to see evidence of market research, early trading, and a credible path to repayment. We help our clients prepare business cases that address the questions lenders ask, including realistic cashflow projections and a clear explanation of the loan's purpose and payback.

If lending isn't available at your stage, alternatives include: grants (Innovate UK, local growth hubs, sector-specific programmes), angel investment or equity crowdfunding, revenue-based finance (advances against card sales or future revenue), asset finance for specific equipment, friends and family investment, and personal savings. Some of these have no repayment obligation; others have equity dilution implications. We give you an honest view of which routes are most appropriate for your business model and stage.

Yes, through the Start Up Loans scheme, which specifically targets pre-trading or early-stage businesses. Mainstream bank lenders and most commercial finance providers require at least 6–12 months' trading history. If you have no trading history, the Start Up Loans scheme, supplemented by asset finance for equipment, is usually the most accessible route. After 12–18 months of trading with demonstrable revenue, your options expand significantly.