Start Up Loans: up to £25,000 at a fixed 7.5%, with a year of free mentoring

Bank lending to brand-new businesses is hard to get, which is why the government-backed Start Up Loan is often the first funding a founder looks at. The terms on GOV.UK were updated in October 2026.

What you can borrow

You can borrow between £500 and £25,000. The interest rate is fixed at 7.5% a year, and you repay over one to five years. There is no fee to apply and no charge for paying the loan off early.

To give a sense of scale: borrowing £10,000 over five years at a fixed 7.5% works out at roughly £200 a month, and about £2,000 in interest over the life of the loan. Your actual repayments will be set out in your loan offer.

Who can apply

GOV.UK says you can apply if:

• you live in the UK;
• you are 18 or over;
• you have, or plan to start, a UK-based business that has been fully trading for less than five years.

The loan is a personal loan, not a business loan, and it is unsecured. That means you are personally responsible for repaying it, and you will have to pass a credit check.

The help that comes with it

Applicants get free help to write a business plan, and successful applicants get up to 12 months of free mentoring. For a first-time founder, the mentoring can be worth as much as the money.

Before you apply

1. Write down exactly what the money is for and how the business will repay it.
2. Prepare a simple cash-flow forecast for the first year.
3. Check your personal credit file, because the decision depends on it.

Applications start on GOV.UK and continue on the Start Up Loans website.