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Designed as a way to help start-ups that have begun trading, Start Up Loans are a form of personal created to support new business owners that have struggled to secure finance from traditional lenders. Provided by the Start Up Loans Company, borrowers are able to access between £500 and £25,000 payable over one to five years at a fixed interest rate of 6% per annum.
How does it work?
The scheme is delivered through ‘Delivery Partners’ who work in partnership with The Start-Up Loans Company, a subsidiary of the British Business Bank, who administer the scheme.
The loans are government-backed and currently charged at a fixed interest rate of 6% per year. Importantly, a start-up loan is not a business loan. Rather, it is an unsecured personal loan, assigned to the individual looking to set up a business.
The loan must be paid back over a period of one to five years. As it is a personal loan, liability to pay back the funds lies with the loan recipient, which means even if your business fails, it’s down to you to pay back your funds.
Am I eligible?
The scheme is open to anybody who fulfils the application requirements. To be eligible for a loan, applicants must:
While most business types are eligible for funding through the initiative, there are some exclusions. The scheme cannot support businesses associated with the following:
How do I apply?
You can apply via the government website, which will take you directly to the Start Up Loans company’s page, who administer the scheme. There, you will be able to start the applications process. There are no application fees or set-up fees, and you can go through the process entirely online.
You must provide several documents for review with your application, which play a big part in determining whether you are eligible to secure funding. These are your business plan, a cash flow forecast and a personal survival budget.
Author: Sacha Bright & Oliver Murphy
Disclaimer
To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed. Nextfin is not liable for any damages arising from the use of or inability to use this site or any material contained in it, or from any action taken as a result of using the site.
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