Start-up loans - not all heroes wear capes

Last post: May 3, 2023

Funding a start-up business is difficult but there are options including the Start Up Loans Company. This article explains how the Start Up Loans Company helps new-start business or ones trading less than 3 years.

Getting funding for a new-start or young business is very difficult. Most lenders will only lend if a business has been trading at least 12 months, most want to see 24 or even 36 months under your belt before they will lend. And the few that do lend usually want security (i.e charge on property or assets) and still charge exhorbitant rates. It's not pretty out there for the bold entrepreneur seeking debt finance.

However, there is one shining star that is often overlooked when assessing options: The Start Up Loans Company. Not only has this government-backed lender been supporting new businesses for over 10 years, they've actually been making their loans more flexible and cost-effective over that time. 

Firstly, let's define what counts as a "start-up": it's any business that is within its first three years of trading - yes, first THREE YEARS (it used to be two years but they upped it to three in March 2022). This can be a sole trader, a partnership or a limited company. But you do have to be a new trading business; what you can't do is be a sole trader for, say, five years and then incorporate and expect to be eligible - this doesn't count as a "start-up" as you had been trading in one form or another for more than the three years


So what does the Start Up Loans Company (SULC) provide? The SULC provides loans of £25,000 per director (up to a max 4 directors) to any business within its first three years of trading or even if the business is pre-trading. These loans are over 5 years and at a very competitive 6% pa - and amazingly rate this rate has stayed at 6% as interest rates have risen from 0.1% to their current levels! Some key points to note are:


  • The start-up must be a new business enterprise. It does not count if you have been trading as a sole trader and then incorporate.
  • However this definition also means that in some cases if an existing business radically changes its business model then it can be considered for a Start Up loan, even if was been trading for longer than the three year time threshold.
  • It also means if you are buying a business that has been trading for more than three years but you have not been involved in that business in any way, this would still be eligible for finance.
  • The loans are personal loans to the directors/owners of the business to be invested in the business. For this reason, if an individual is involved in more than one business, they can only get one Start Up loan.
  • The key criteria for approval are that the applicant has a good credit score (Experian 700+ is preferred, possibly 600+) and they have a credible business plan.
  • The application process requires completing template forecasts for the business and showing how the applicant themselves will manage their finance for the next 12 months.
  • The scheme is open to sole traders, partnerships and limited company directors.
  • While in theory a business can achieve up to 4 Start Up loans to a total of £100,000 (i.e. 4 x £25,000) in our experience this is rare and only the strongest businesses will get this.



Amid all the recent support offered to businesses by government agencies through the pandemic, the Start Up Loans Company is not often mentioned. This scheme has been in place for 10 years now and in that time has provided loans to over 90,000 businesses which means in excess of £800m of new business finance. Indeed, during the pandemic when a lot of people lost their jobs and decided to embark on a path of self-employment, the SULC actually increased its lending to meet this demand. This latest change will see them increase the numbers to whom they can offer assistance.


But isn't this just what real heroes do? They don't need the fanfare or the limelight but just quietly get on with consistently performing above and beyond. After 10 years we feel the SULC deserves a bow. And a cape.

If you need help with your SULC application, please contact us.