A start up loan is a cash lump sum you can borrow from a lender to help fund a new business, or a business that has only been running for a short time.

You can use the money from a start up loan to pay for most business expenses, such as:

  • Stock

  • Equipment

  • Workplace rent

  • Wages

Use this comparison to check the loan amounts each lender can offer, and consider the rates charged when choosing, as the higher the rate you get the more you pay in interest.

How to get a start up loan for your business

You can find a range of business start up loans and grants online, but you need a business plan and cash flow forecast before applying.

You can use a grant or loan to start a business and pay for costs like office furniture, security equipment and marketing.

How do start up loans work?

You borrow money from a business lender, and agree to repay it with interest over a fixed term.

You could borrow several thousand pounds with a start up loan.

If you started your business within the last 2 years, you may still be eligible for a start up business loan.

How do grants work?

You apply for a small business grant from your local council, e.g. up to 1,000, without needing to repay the money or pay any interest.

Your council is not obligated to accept your application, so if it is rejected you could consider a start up business loan as an alternative.

How to choose a business start up loan

To find the best start up loan for your business:

  • Look for lenders that offer the loan amount you need

  • Compare rates to get an idea of how much interest you could pay

  • Apply for the loan with the lowest Annual Percentage Rate (APR)

Make sure you compare as many start up business loans as possible to find the lowest APR for the amount you need to borrow.

Start up business loan FAQs

Q

Can I get a start up business loan for a home business?

A

Yes, lenders can accept applications for home based businesses. You should still check with each lender to check your business is eligible to apply.

Q

Can I use a start up loan to pay for wages?

A

Yes, but only if you include wages as part of your loan application.

Q

Do I need a business account to apply for a start up loan?

A

Some lenders require you to have a business account with them to qualify for a business loan, but some are more flexible so ask before you apply.

Q

Can I repay a start up loan early?

A

Yes, but you may get an interest penalty based on your remaining loan balance. Check with your lender if you can afford to repay your loan early.

About our start up business loans comparison

Q

Who do we include in this comparison?

A

We include loans available for businesses that have been trading up to 2 years, from lenders and through brokers on our panel. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.