Funding a startup is a chicken-and-egg problem: lenders like trading history, and you do not have any yet. Here are the routes that genuinely work for new UK businesses.
Government Start Up Loans
The British Business Bank’s Start Up Loans scheme offers government-backed personal loans (typically £500–£25,000) to new founders, at a fixed rate, with free mentoring and no need for business trading history. It is often the best first stop.
Other early-stage options
- Unsecured loans from lenders that accept 6–12 months trading.
- Asset finance to fund equipment without a big upfront outlay.
- Merchant cash advance once you are taking card payments.
- Grants — non-repayable funding for eligible sectors and regions.
What lenders want from a startup
A credible business plan, realistic forecasts, the founder’s personal credit history, and often a personal guarantee. The cleaner your personal finances, the more options you will have.
Build toward better terms
Treat early borrowing as a way to establish a track record. Six to twelve months of on-time repayments and steady takings opens the door to larger, cheaper facilities later.
Ready to compare your options?
Get a free, no-obligation quote in about two minutes — soft search only, no impact on your credit score.
Get your free quoteThis article is general information, not financial advice. Eligibility, rates and terms vary by lender and your circumstances. The Loans Hub is a finance broker, not a lender.
