Established in 2012, Start Up Loans (SUL) is a government-backed subsidiary of the British Business Bank. Working with a national network of delivery partners, its goal is to ensure new businesses have access to affordable funding and mentoring. SUL loans are available to individuals to start a new business or expand an existing enterprise.
In addition to getting the business loan, successful applicants will have access to a year of free business mentoring.
How does SUL work?
With an SUL loan, up to four partners can each apply for a maximum of £25,000, so potentially £100,000 is available per business. Loans are unsecured, meaning no assets are needed as collateral.
Key features of an SUL loan
|Loan type||Fixed rate unsecured loan|
|Loan amounts||£500 to £25,000|
|Loan terms||1 year to 5 years|
|Loan rate type||Fixed|
|Personal guarantee||A personal guarantee may be required|
|Multiple loans allowed at the same time|
|Option to top up a loan|
|Early repayment fee|
Up to four partners in a business can choose to borrow between £500 and £25,000, meaning a maximum borrowing potential of £100,000 per business. Interest rates are currently fixed at 6%, meaning repayments will remain the same over the term of the loan.
Am I eligible for Start Up Loan funding?
It’s important to be certain that the repayment terms are realistic and achievable before applying for an SUL loan. You will also need to meet the following criteria:
|Maximum trading requirement||2 years|
|Business types||Limited Company,Sole Trader,Partnership|
|Additional eligibility info||Your business must have been trading for less than 24 months to apply. Start Up Loans are not available to fund debt repayment, training/qualifications/education programmes or investment opportunities that don't form part of an on-going sustainable business.|
The director that applies will need to be aged 18 or above, resident in the UK with the right to work in the UK, and will need to pass credit checks.
In addition to these criteria, your business type and loan purpose, ie how you intend to spend the funding, will need to comply with eligibility criteria set by the scheme. Detailed information on excluded business types, and excluded loan purposes can be found on the SUL website.
How can I apply?
If you’ve decided that an SUL loan is the right choice for your business, you can start your application online. You will need to provide a business plan, cash flow forecast and personal survival budget.
- Prepare. You will need to provide a business plan and a cash flow statement for your application. Help and advice resources, as well as support on live chat, can be accessed on the SUL website.
- Register. Complete the online registration form and choose a delivery partner to support you with your application.
- Apply. Provide information about the business, how much you want to borrow and how you intend to use the loan.
- Agree. Once approved, you will need to sign a Loan Agreement. After this is returned to SUL you will receive your loan and have access to twelve months of free business mentoring.
Help and advice is provided throughout the application process.
Start Up Loans customer reviews
Start Up Loans has received fairly negative reviews from its customers, according to customer review site TrustPilot.
It currently has a TrustPilot rating of 2.4 out of 5, based on 158 reviews (updated May 2022). Many of its reviewing customers (63% to be exact) have complained about the poor communication they had received and some quite a few stated that they had been rejected, even if they had a clean credit report. This can sometimes be the case, not all loan applications are accepted, even if you meet the eligibility criteria but, it is quite unique to see this many complaints regarding this.
On the other side of the coin, 33% of Start Up Loans customers rated the subsidiary of British Business Bank as “Excellent” or 5 out of 5 stars.
It seems to be, those customers who had detailed business plans and relevant documents were more likely to receive a loan. In particular, one customer commented: “I have found this entire process to be faultless. I was doubtful given some of the reviews as my credit score is not the best.”
Alternative sources of funding
It’s a good idea to explore all of your options when looking into raising funding for your small business. There are a range of different routes to consider.
- Get funding from investors. If they see potential in your business or idea they may offer to purchase a portion of your company in exchange for financing.
- Crowdfunding. Get the word out using social media, crowdfunding sites or by investing in marketing. Family, friends, fans and even strangers who share your passion may want to contribute funds.
- Apply to a government scheme. Various government schemes exist that offer support to new and small businesses. Learn more about government support for businesses.
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