StartUp loans

StartUp Loans – Fuelling World-Changing Ideas to Form Life-Changing Businesses

Hardworking entrepreneurs have been shaping the ways of the world for centuries. From ever-so-dangerous steam engines to cars that drive themselves, we have come a long way. But the life of enterprise isn’t all about success stories and never-ending accolades.

The spirit of entrepreneurship has been soaring – especially in the last decade – across the world. 2016 saw the highest-ever number of businesses being registered in the UK, a large percentage of them being personal endeavours. This, however, doesn’t always mean that every startup will end up with success. Startups require consistent investment of capital – capital that most entrepreneurs can’t arrange for on their own. Also, not every startup can possibly secure multiple rounds of heavy investments. Therefore, startup loans come as a small but sure source of financing for all entrepreneurs.

What is a StartUp Loan?

A startup loan is a small, short-term loan granted to qualifying startups and entrepreneurs. The loan amount is presently capped at £25,000.

Start up loans are distributed by licensed, registered lenders who are a part of the StartUp Loans Programme launched by the government. As per an official press release from the Department of Business, Energy & Industrial Strategy in August, 2016, funds worth over £250 million were distributed to start ups across the UK.

Features & Benefits of StartUp Loans

The notable features of startup loans available under this programme are:

It’s a Personal Loan!

The most important thing entrepreneurs should know before applying for a startup loan is that it’s not a typical business loan. Although each startup loan aims to aid the growth of newly-founded businesses, it is granted to the entrepreneur in their personal capacity. So, the borrower will be personally responsible to ensure that the loan is repaid.

An Unsecured Loan

StartUp loans are not secured with attached collateral. Therefore, it becomes imperative for the borrower to possess a healthy credit score in order to get approved.

Repayment Schedule

StartUp loans are short-term loans. The loan term is presently capped at a maximum of 5 years.

Fixed Interest Rate

Startup loans are not free-market finance products. So, each participating lender is required to charge the interest on each startup loan at a fixed rate. Presently, this rate sits at 6% pa.

Business Assistance

The most valuable advantage of startup loans is also the least tangible. As a part of the programme, your business will receive business, finance and technology assistance from experienced mentors.

StartUp Loans – Check Your Eligibility

Entrepreneurs need to pass certain eligibility criteria to qualify for a government-backed startup loan. Below are the some of the main eligibility requirements:

• ✓ You are 18 years of age, or older.
• ✓ You are presently a UK resident.
• ✓ The startup is based in the UK.
• ✓ You possess the right to legally work in the UK.
• ✓ Your credit score is healthy.
• × You don’t have any outstanding CCJs or debt collection notices against your name.
• × Your business hasn’t been trading for over 2 years.
• × You’re unable to get loans from other sources.