British Business Bank Start Up Loans: How UK Founders Can Borrow Up to £25,000 at 7.5% in June 2026

The British Business Bank has handed out £1.1 billion in personal loans to 118,000 new UK founders since 2012, and most people running a small business have still never heard of the scheme. Start Up Loans is open every working day of the year. As of April 2026 the fixed rate sits at 7.5%, well below what a brand new limited company will be quoted by a high street bank.

What it is

Start Up Loans is a government-backed personal loan programme delivered by the Start Up Loans Company, a subsidiary of the British Business Bank. The money is meant for people starting or running a young UK business, and the contract is signed in your name rather than the company’s. The loan is unsecured, so no charge sits over your house or your van. Every successful applicant also gets 12 months of free one-to-one mentoring with an experienced business adviser.

Who qualifies

You must be at least 18, a UK resident with the right to work, and your business has to operate and pay UK tax. The biggest change in 2026 sits here: from 6 April, the trading window for a first loan stretched from 36 to 60 months, so businesses up to five years old can now apply. The application runs against your personal credit file, because legally this is a personal loan. If the business fails, the lender will still come after you for the balance. Gambling, lending and most regulated financial services sit on the excluded list.

How much is available

Each director or co-founder can borrow between £500 and £25,000 in their own name. A business with multiple founders can stack applications up to a combined £100,000. The fixed rate is 7.5% per year on new applications from 6 April 2026 onwards. Anyone who locked in a loan before that date keeps the old 6% rate. Terms run from one to five years. There is no arrangement fee, no security required, and no penalty for paying the loan off early.

What you need to apply

You will be asked to submit:

• A written business plan covering what you sell, who buys it and how you reach them
• A 12 month cash flow forecast, month by month, showing money coming in and going out
• A personal survival budget setting out your household income and outgoings, so the assessor can see how you would cover the loan if business slows
• Proof of UK residency and right to work
• Consent for a full personal credit check

The deadline

There is no fixed application window. Start Up Loans is a rolling, open scheme, funded for several years after the July 2025 Spending Review pledged more than £1 billion of additional lending. Applications are assessed continuously, and most decisions take six to eight weeks from a complete submission. If approved, the money usually lands in your account within two weeks of signing. The British Business Bank expects roughly 69,000 loans across the current Spending Review period, with the average loan size rising from £12,000 to £15,000.

Our take

This is one of the most accessible pieces of government-backed finance in the UK. Businesses backed by Start Up Loans have a 69% five-year survival rate, against a UK average near 43%, mostly because mentoring and a real cash flow forecast are mandatory before any money moves. The catch is that your personal credit is on the line. If the business folds, you still owe the lender. The best fit is a founder with a credible revenue model, at least a pilot customer, and a credit file in reasonable shape. It is less useful for anyone needing more than £100,000 in one round, because stacking four personal applications takes longer than one commercial facility.

How to apply

Apply directly at startuploans.co.uk. You can either submit through the central British Business Bank portal or work with a regional delivery partner such as Virgin StartUp, First Enterprise or Let’s Do Business Finance. They all use the same assessment criteria. Questions go to the partner handling your application, not the British Business Bank itself.