If you can't access a startup loan because your business is more than three years old, you can look into applying for a traditional business loan. This loan is a way to get external funds to run or grow your business.
Start up business loan deals
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No years of registered trading required
Nationwide Finance Business Loan
Loan Type
Unsecured term loan
Loan amount
£6,000 to £10,000,000
Loan term
12 months to 72 months
Nationwide Finance is a Direct Funder. They help over 50,000 businesses each year get finance. Same day decision and funds in 24 hours. Rated Excellent 5* on Trustpilot and Google. No.1 direct funder for new starts and established businesses.
No minimum trading history.
Barclays Business Loan
Loan Type
Term loan
Loan amount
£1,000 to £5,000,000
Loan term
12 months to 300 months
Subject to application, financial circumstances and borrowing history. T&Cs apply. 18+. Eligibility criteria applies. Maximum loan amount based on application. No arrangement fees on loans up to £25k. Other terms may be available.
No minimum trading history required
Tide Startup Business Loan
Loan Type
Unsecured term loan
Loan amount
£500 to £25,000
Loan term
12 months to 60 months
Minimum trading history – 24 months, minimum annual turnover - £200,000
Think Business Loans Business Loan
Loan Type
Unsecured term loan
Loan amount
£25,000 to £5,000,000
Loan term
3 months to 72 months
Think are authorised and regulated by the FCA. Their tech enabled experts will match your business across 100's of lenders and products to find the option that’s right for you. Their service is rated 'Excellent' on Trustpilot.
Think are a credit broker and not a lender. Minimum turnover is £200,000 with 2 years trading.
Is my business eligible for a startup business loan?
You could be eligible for a startup loan if your business has been trading for less than three years. You don’t need to apply right away – as long as you’re within the first 36 months, you can still qualify.
These loans provide a lump sum to help with cash flow, staff wages, rent, equipment, or other early-stage costs.
It’s always a good idea to research different loan options to ensure you choose the one that best fits your needs.
What is considered a startup?
A startup refers to a recently established business in the early stages of development - often driven by entrepreneurial founders. While many startups are self-funded initially, they frequently seek external investment to help propel their growth.
A business can remain in "startup mode" for up to three years, meaning the term applies not only to the first year, but also during the early phase of scaling and stabilising operations.
Number of new UK companies that started up in H1 2025[1]
426,000
What do I need to apply?
Specific requirements will vary for startup business loans - it will depend on the loan provider you choose and the terms they set.
In most cases, you need to be a UK resident and be aged 18 or over. Your business must also be less than three years old and be both based and registered in the UK.
If your business ticks these boxes, then you need to start thinking about the application process. Before you can apply for the loan, you’ll need to create a business plan.
Your business plan sets out your idea, market research, how you plan to make money and repay borrowing. It should sit alongside a cash flow forecast.
You’ll also need to demonstrate the position of your business and illustrate how you plan to use the loan to ensure your business is a success.
How is a startup loan different to a typical business loan?
A startup loan acts in a similar way to a business loan. You will need to complete an application, and the lender will determine whether your business is eligible for the loan and can repay it within a specified timeframe.
Some startup loans, including the government-backed Start Up Loan scheme, also offer support from business advisers.
Startup loans normally come with a greater risk for lenders, so you might have to pay a higher interest rate or have a personal guarantee.
You might also find that lenders look at your personal credit history, especially if the business is still in the early stages and doesn't yet have a credit history of its own. It may help to limit other debt before applying, as having lots of recent credit applications can be unfavourable to lenders.
Traditional business loans are typically used by businesses that have been trading for at least 24 months. You can normally borrow more with a traditional business loan compared to a startup loan.
How to choose a startup business loan
Follow these tips to decide which startup loan is right for your new business:
Work out how much you need
Create a business plan and think about how the loan will positively impact your business. Then search for lenders that are currently offering that amount of money.
Look at interest rates
Once you’ve decided on the loan amount, compare the interest rates as these will vary. The higher the rate the more you're likely to pay overall which could impact your decision.
Find the lowest APR
Compare as many startup loans as possible and try to find the lowest annual percentage rate (APR) for the amount you would like to borrow.
What is the government-backed Start Up Loan?
The government-backed Start Up Loan is a scheme which aims to help small businesses with a cash injection, in the form of a loan of £500 to £25,000.
To apply, you’ll need to live in the UK, be over 18, and have started (or be about to start) a UK business that has been trading for less than 36 months.
This loan differs slightly from a business loan: it is an unsecured personal loan, meaning the applicant, rather than the business, will have a credit check during the application process.
If successful, you can repay the loan over a period of time, ranging from 12 months to five years. The Start Up Loan charges a fixed interest rate of 6% per year, and there’s no application or set-up fee. This can make it easier to work out the affordability of the loan for your business.
Average amount borrowed with Start Up Loan[2]
£7,200
Pros and cons
Pros
You’ll have money to start your business or continue to grow it
Keep control of the business as you haven’t given away equity
Build a positive credit history if you pay back the loan on time
Startup loans tend to be unsecured meaning you won't usually need to put forward collateral or assets as security
Cons
Interest rates can be higher making it harder to pay back the loan
Startup loan fees can be an extra burden on businesses
Eligibility can be strict so some businesses might not find a suitable loan
Things to look out for
Fees
If you apply for the government-backed Start Up Loan there are no fees involved, but other startup loans could come with some fees attached.
For example, there might be an early redemption fee if you wish to repay the loan before the end of the agreed term, or an application fee which can be a percentage of the loan amount. You might find lenders with no fees, so always look into the terms and conditions of the loan to understand the full story and be sure to check and compare fees when deciding on a loan to apply for.
Eligibility
The eligibility criteria can be strict. Ensuring you have good credit history could help, if you don't then you may not be eligible or you may need to provide a guarantor.
Five myths about startup loans
There are plenty of myths surrounding startup business loans, so let's debunk and separate fact from fiction.
Banks won't lend to startups
It’s a common belief that banks avoid lending to startups, but that’s not entirely true. While new businesses can find it harder to get approved, a strong business plan and clear repayment strategy can boost your chances. Plus, there are plenty of alternative lenders that focus on helping startups secure funding.
Business loans are too expensive
Loan costs vary depending on the lender, interest rate, and repayment terms. Startups may face higher rates due to limited credit history, but shopping around and building your credit score can help. Borrow only what you need and repay it as quickly as possible to keep costs down.
Applying for a loan is really complicated
Applying for a business loan isn’t much harder than applying for a personal one. Lenders simply want to see that you can repay them. A clear business plan with solid research, projections, and repayment strategy will make the process much smoother.
Business loans are only an option if you have a perfect credit score
A strong credit score helps, but it’s not the only way to secure a business loan. Collateral, guarantors, or building your credit with tools like a business credit card can all improve your chances – just make sure you understand the risks involved.
Grants are better than loans
Grants don’t need to be repaid, but they’re often highly competitive and time-consuming to apply for. Some are limited to specific uses too, like research and development (R&D). A startup loan can be a faster, more flexible option if you want to keep your plans moving.
Alternative funding options for startups
Business loans
If you can't access a startup loan because your business is more than three years old, you can look into applying for a traditional business loan. This loan is a way to get external funds to run or grow your business.
Crowdfunding
Pitch your business idea online and offer perks, rewards or equity to investors if your target's met. Crowdfunding can be a good alternative to startup business loans, but remember getting the amount you need can be a slow process and if you don't reach your funding target you may not get anything.
Business grants
Business grants don’t have to be paid back making them a very competitive form of business finance. Small business grants are available from your local council and could provide the funds to help your business idea.
Alternative funding options for startups
Business loans
Crowdfunding
Pitch your business idea online and offer perks, rewards or equity to investors if your target's met. Crowdfunding can be a good alternative to startup business loans, but remember getting the amount you need can be a slow process and if you don't reach your funding target you may not get anything.
Business grants
Business grants don’t have to be paid back making them a very competitive form of business finance. Small business grants are available from your local council and could provide the funds to help your business idea.
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References
1. NatWest and Beauhurst’s New Startup Index Ten UK regions see surge in startup activity in early 2025
2. British Business Bank Start Up Loans statistics