Compare Start Up Business Loans

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We are showing you a range of business finance options that match your search criteria. This doesn't mean you have been checked for eligibility for these products nor does it indicate the suitability of the product. Some products operate differently to others in the table. Always confirm any terms and conditions before entering into any credit agreements with the lender.

Please note:
We are showing you a range of business finance options that match your search criteria. This does not mean that you have been checked for eligibility for these products. We are not aware of your specific requirements, it is your responsibility to ensure that any options presented meet your requirements. Always read any terms and conditions before entering into any credit agreement with a lender.

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Your loan needs:

Amount

Repayment

Purpose

Business type

Turnover

Trading period

Card payments

Remember

You may have other borrowing options such as credit cards or personal loans
We haven't assessed your suitability for the products below against your personal or business circumstances
Not all products are regulated by the FCA

1 provider

Nationwide Finance Startup Loan
Nationwide Finance help 35,000 businesses get secured finance each year

Nationwide Finance are a Direct Funder

Eligibility checked - free, no obligation process

Unsecured options may be available to listed companies
Minimum annual turnover

No minimum

Available amounts

£6,000 - £10,000,000

UK Available terms

12 months - 5 years

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Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. Use the sorting options at the top of the comparison table to order by other criteria.

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What is a business loan?

A business loan is a form of finance that can be used to help support and expand your organisation.

As with personal loans, you borrow a sum of money, and pay it back, with interest.

One of the most important differences between personal loans and business loans is that with a personal loan, you will be personally liable for repaying the amount you have borrowed.

With a business loan, as long as the appropriate company structure is in place, that responsibility falls to the business instead. This will not be the case, however, if you are a sole trader, or you have secured your business loan with a personal guarantee.

You can also typically borrow more through a business loan, while the interest payments on your business loan may be tax deductible unlike payments on a personal loan.

Types of business loan

Secured business loans

Secured business loans require that you put down an asset such as property as security. Secured loans often come with lower interest rates than unsecured loans as they represent less risk for the lender. They may also give you access to a larger loan amount over a longer term. However, secured loans come with the added risk that you could lose your assets if you miss the payments.

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Unsecured business loans

Unsecured business loans are a type of finance that does not require security. These types of loans tend to have higher interest rates because there is a greater risk of the lender losing money if you can't pay off what you owe. Unsecured business loans also require a good financial history and credit rating as evidence that the business will be able to repay the loan.

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Government loans

There may be government-backed business loans you can access. Examples include the Recovery Loan Scheme, introduced to help with the financial stresses caused by the Covid-19 pandemic, which has now been extended. What schemes are available can vary depending on government policy and changing economic circumstances across the country. So it can be useful to regularly check the Department for Business, Energy & Industrial Strategy's search tool for guidance on the business loan schemes available in your region.

Start up business loans

The Start Up Loan Scheme is a government-backed fund that currently offers personal loans of up to £25,000 to UK businesses owners that have been fully trading for less than 36 months or those looking to start a business. You can apply for free, and there are no early repayment charges. If your application is successful, you'll also get up to 12 months of free mentoring. Government Start Up Loans have a fixed annual interest rate of 6% and must be repaid over a period of one to five years.

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Small business loans

Small business loans are for start ups and small businesses to access funding. They can be used for a variety of purposes from hiring new staff to managing cash flow. As with all loans, small business loans are repaid over an agreed time period with interest. Large business loans tend to be cheaper than small business loans because there is less perceived risk with lending to a bigger company.

Compare small business loans

What is a start up loan?

Start up loans are a form of funding that can help get a business up and running or expand in its early stages. This can come in many different shapes and sizes. For example, a government start up loan is structured as a personal loan; other start up loans will take the form of business loans. It is important before borrowing that you are aware of the varying level of risk that comes with each of these products.

As with any loan, a start up business loan sees you borrow a set amount and pay it back, plus interest, over an agreed period of time. You can get a start up loan directly from a mainstream lender such as a bank, from an alternative online lender, through the government Start Up Loans scheme or through a broker. Ultimately, the exact way a business start up loan works will depend on the type of loan.

Whatever the loan type, you’ll need to prepare a clear business plan and cash flow forecast before applying.

What are the pros and cons of business start up loans?

Pros

Start up loans can be used for a wide range of purposes, from managing cash flow issues to purchasing equipment.
A traditional start up loan can provide funding without giving away equity to an investor.
Repaying your start up loan on time can help you build a good business credit score.
Some lenders will judge your application on your business plan and forecasts more so than your historical financial performance.

Cons

You are committing to making regular repayments which could restrict your business’s cash flow.
Certain types of borrowing, such as a secured loan, will require an asset as collateral, which you could lose if you fail to meet your repayments.
A personal guarantee can leave you as an individual liable for your business loan if the business defaults.
Failure to meet your repayments may have a negative effect on your business or personal credit score.

Types of start up business finance

There are other forms of financing available to new businesses that don’t take the form of government start up loans. These alternative options for borrowing can be more expensive and have additional risks attached such as assets used as security or personal guarantees.

It is therefore extremely important that you properly understand the risks attached before using them to fund your start up, and that you are confident in your ability to make repayments.

How to apply for a start up loan

To apply for a business loan, you’ll usually need to supply a business plan and financial projections, along with some personal details. This will help providers look at your affordability levels and the strength of your business plan.
The business plan must include how you’re planning to spend the money you borrow, and how you’ll make the repayments.
You may also need to provide business bank statements and your balance sheet to show assets and liabilities, so having that documentation ready will help prevent delays.
Then you will need to follow the specific application process of the loan or finance you are looking to secure, including going through the relevant eligibility checks.

Start Up Loans FAQs

What is a start up business loan?

Start up business loans are a form of lending designed to help you fund your new business. They come in all shapes and sizes, from government-backed start up loans that are structured as personal loans to business loans from traditional lenders. It is important to do your research and make sure you are comfortable with the terms of lending before applying for a start up business loan.

What is the difference between a start up business loan and a grant?

A small business grant is funding for business use that doesn’t have to be paid back. A grant is usually awarded by an individual or organisation for a specific purpose or project, such as training, expansion or research.

Start up loans must be repaid in full, plus interest and fees, over an agreed term.