What is a Start Up Loan?

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Unless you’re thinking of starting your own business, there’s no reason you’d have heard about Start Up Loans, never mind understand the details and differences to other types of business finance. But now you’re chomping at the bit to start your new business and suddenly you’ve got lots of questions.
We’re here to support every step of your start up adventure. From the early days like today, when you’re dreaming big and Googling EVERYTHING, to setting up your business once your loan is approved, Transmit Startups can help.

What is a Start Up Loan?

A Start Up Loan is an unsecured personal loan that you use to start a business.

Despite the name, you can apply before your business starts, or at any point in your first three years of trading.

  • ‘Unsecured’ means that it isn’t secured against any assets (unlike a mortgage, for example, which is secured against your home)

  • ‘Personal’ means that you are personally responsible for paying back the loan, even if it is for business purposes

A Start Up Loan is different to normal personal loans because you have to use it to fund your new business. You’ll have to provide evidence that this is how you’ll use it.

Who can get a Start Up Loan?

You are eligible to apply for a Start Up Loan if:

  • you’re over 18

  • you live in the United Kingdom

  • you have a business that is not yet trading or under three years old.

How do Start Up Loans work?

Start Up Loans work the same way as any other personal loan. You borrow a certain amount of money and agree to repay it over a fixed period of time.

You pay interest on what you’ve borrowed. The interest rate for Start Up Loans is fixed at just 6%, which is very competitive.

The difference is the information you need to provide when you apply. Because your loan is for setting up a business, you’ll need to provide quite detailed information about that business.

But once you’ve started your application, you’ll receive support from the finance provider to get the right information together, and to check your eligibility.

Who provides Start Up Loans?

Start Up Loans are provided by the British Business Bank, which was established by the UK Government, to make sure you can access funds to get your business off the ground.

Many high street banks won’t lend to brand new businesses, so it has been hard for new and aspiring entrepreneurs to get business finance.

The Government recognised this could stifle innovation and growth of the UK economy. So they set up the Start Up Loans fund to offer affordable finance to people who want to start a business… people like you.

Where can I get a Start Up Loan?

There are a number of organisations – called official Business Support Partners – who manage Start Up Loans on behalf of the government.

With outstanding support and a streamlined system, they will make your loan application as pain-free as possible.

How do I apply for a Start Up Loan?

You can apply for a start-up loan online.

We work with the Start Up Loans Company and their Business Support Partners who deliver the Start Up Loans scheme. You can start an application here. Remember, this is a personal loan to be used for business purposes and, because we only work with responsible lenders, you’ll need to pass a credit check.

What happens when I apply for a Start Up Loan?

  1. Complete the registration form on the Transmit website and the application form on the Start Up Loans website – this is where the credit check is done

  2. Input your business information and upload any documents requested (see below). Or continue without them for now

  3. Get assigned to one of our Business Advisors. They will review your documents, help you perfect your paperwork and assess your application

  4. Get approved (fingers crossed!) and sign the loan agreement

  5. Receive the money in your bank account and get assigned to a mentor.

What do I need to get a Start Up Loan?

You’ll need to provide evidence of what you plan to do, how you’ll use the money, and your prediction about the profitability of your business.

The finance provider will use this to assess whether it is responsible to give you a loan. (The last thing they want to do is lend you money that you won’t be able to pay back.)

Your Business Support Partner will be looking for solid business ideas, backed up with research about the market, and a realistic financial forecast. 

How long does it take to get a Start Up Loan ?

It depends on how quickly you can provide the required information about your proposed business. If you have your business plan and financial projections prepared, it can take as little as 2 weeks from first enquiry to accessing your loan. However, it usually takes longer because most applicants require some level of support to get their information ready for their application.

Can I get help from the Start Up Loan delivery partner?

Transmit Startups was previously the biggest supplier of Start Up Loans in the country. We’ve worked with more than 15,000 entrepreneurs, so we understand the challenges they face.

Transmit Startups now refers customers to national Business Support Partners of the Start Up Loans Company who deliver the Start Up Loans scheme and have a wealth of experience to support applicants.

  • Pre-application support – help to prepare your application, business plan and other documents

  • Support during the loan process – call your friendly personal loan advisor for updates on progress and with any questions you have

  • Post-approval support – after they’ve approved your loan, you will be matched with a mentor to support your start-up journey.

  • Added extras – we’ve built a community of start-up owners for peer support and can help you with PR about your business

If you’re still brewing up your business idea, grab a cuppa and browse our Getting Started section for early advice on developing your concept.

Wonder how much you’d be able to borrow? Our easy-to-use loan calculator can tell you.

Laura White
Laura W is a PR consultant and a trainee Counsellor. An experienced journalist, she interviews entrepreneurs and senior leaders about their business journeys and collaborates with designers, filmmakers, photographers, and marketers to share stories that inspire a reaction.

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