Small Business Start Up Loans: Update

At the end of last month, Business Secretary Jacob Rees-Mogg announced that the Government would be expanding its £900 million Start Up Loans initiative to provide financial support to more young businesses – something that really is an essential move during the current economic crisis.

The new rules mean that eligible businesses that have been trading for up to 3 years can now apply for a start up loan (previously this was capped at 2 years), and businesses that have been trading for up to 5 years can apply for a second start up loan. The Government’s aim is to provide 33,000 new loans over the next 3 years.

The Start Up Loans’ Managing Director Richard Bearman commented:

“We are delighted to be able to extend the reach of the Start Up Loans programme to help support businesses who need extra support during a time of continued economic unrest.

“This extension of the programme will enable us to work with those businesses that had perhaps just got going when the pandemic hit, or are ready to scale up now that they are back on their feet. We want to ensure that these businesses do not get left behind.”

What is the British Business Bank Start Up Loans Programme?

Set up in 2012, the British Business Bank Start Up Loans programme is a financial initiative to help support new businesses in their early years, when getting a loan from a traditional lender is often tricky. It enables eligible businesses to apply for a loan of up to £25,000, which has a fixed interest rate of 6%, as well as receiving extra support such as mentoring.

Which Businesses are Eligible?

As a general rule of thumb, to apply for a start up loan you need to be a UK resident who has a UK-based business that has been trading for less than 36 months. There are, however, certain business types that are excluded from the programme, and you’ll need to prove that you can repay the loan. You can find the full eligibility information on the British Business Bank website.

How Can You Apply For A Start Up Loan?

Begin your application on the Government website. Here it will take you to a registration page where you’ll need to check your eligibility and then register. You’ll then be asked to fill out an application form to be considered for the loan. You can find out more about the application process via the British Business Bank’s information guide.

Advice for Anyone Looking To Start a Business in 2023

If you’re eager to set up a new business next year, there are many resources you can – and should – take advantage of. Here are a few of our recommendations:

• Utilise any applicable start up workshops, programmes or courses! A great place to start is the Enterprise Nation website. Here you’ll find a whole host of valuable information, such as details of upcoming start up events, relevant e-learning courses and start up offers.
• Pick your location wisely. This can play a vital role in the growth rate of your business so make sure you thoroughly research where you’d like your business to be based. According to predictions from Virgin Money, Cambridge is set to be the best UK city for start up companies next year, closely followed by Edinburgh, York, Oxford and Portsmouth. This is based on Virgin Money’s research which looked at factors such as internet speed, innovation and the rate of employment. You can find more information about the research via Business Weekly’s article.
• Speak to an accountant! At Warr & Co, we have a dedicated start up team who are highly experienced in working with start up businesses. You’re never just a number with us; we’ll work with you to truly understand your business and your goals, and we can create a bespoke accountancy plan tailored to your needs. You can find out more about us and our start up services via our website. Be sure to take advantage of our start up accountancy consultation offer too – it’s free and comes with no obligation.