Startup Business Loans

A guide to helping you understand and compare startup business loans online


Startup Business Loans UK

Startup businesses are very much encouraged in the UK at the moment and many options are becoming available to help fund them.

"In total, the number of business ventures started in Britain increased by 5.2% to 645,774 in 2018, according to Companies House data collated by the Centre for Entrepreneurs (CFE) think tank. It marked an annual record and a return to growth following a decline in the previous year."

(Source: The Times & Centre for Entrepreneurs)

If like others, you are looking to take the plunge, why not consider a Startup Business Loan? It’s an easy way to finance your business until you gain momentum and you can generate your own cash-flow.

What are Startup Business Loans?

Startup Business Loans are essentially what they say they are, a borrowed cash lump-sum that helps fund new businesses, or companies that have been trading for less than two years. These types of loans are usually used to fund: initial stock supplies, equipment, the first few months’ rent, or even the employees’ wages – a gentle push until the business generates its own cash-flow.

Who provides Startup Business Loans?

Although many people in the UK turn to traditional high street banks such as Natwest for their Startup Business Loan, they then tend to actually enter into their loan agreements online. This simply isn’t just down to the amount of a choice, all at the touch of a button, but it is mostly associated with the rise in alternative funding.

Compared with the traditional banks, alternative funding providers tend to be smaller and more flexible, meaning that they can make decisions quickly, without the red tape that banks have to contend with. They also have the ability to lend off their own balance sheet which offers customers more choice with regard to their loan term and lower interest rates.

Here at Business Comparison we like to take all the hard-work out of finding a Startup Business Loan and compare packages from high street banks, challenger banks, independent and small specialist lenders to find a deal suited to you.

Simply enter your details into our Finance Finder tool and we will provide you with the best Startup Business Loans in the market from our carefully selected panel of lenders.

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How do Startup Business Loans work?

With a Startup Business Loan, you have the ability to spread the cost of investment, breaking it down into more manageable payments. Unsecured Loans are an option when it comes to startup finance, but people tend to avoid using them as they require a Personal Guarantor.

With that in mind, most people opt for Secured Loans. This type of loan is designed for companies that own assets like commercial property, vehicles and machinery. The lender will then secure the loan against the high-value items just in case any loan repayments fail to be met, and if so, they then have the legal right to sell the assets and release the money from the sale to repay the loan.

Upon loan acceptance the business will borrow a fixed amount of money, at a certain interest rate, over a set period of time. Usually Startup Business Loans tend to be Short-term meaning that the repayments will be made over anything from 12 months to 5 years.

Things to consider before taking out a Secured Startup Business Loan

Secured Loans are often cheaper than taking out an Unsecured Loan. Before starting the application process it is always useful to have an understanding as to what assets are available for lenders to secure their funding against – potentially a higher value of assets means more money that a lender is prepared to advance.

Another positive to taking out a Secure Business Loan is that the business partners will not need to disclose their own assets and no personal guarantee is needed. Furthermore, less emphasis is placed on the trading history and credit rating of the business (although this will still be investigated) as the lender is focussed on the secured assets.

So let’s move on to the other things that the lender will want to know about your business. Understandably as a startup you may not be able to provide a long trading history but it is always good to highlight how long you’ve been in business for, your turnover so far and what your predicted annual turnover will be. Then thinking about the product that you want, consider what you require the funds for and how long you would like to spread the repayments.

The best Startup Business Loans in the UK

Here at Business Comparison we offer a huge variety of market-leading Startup Business Loans and many exclusive deals. We compare the top loan products in the UK from high street banks, challenger banks, online lenders and alternative finance houses, then provide you with the best loans to suit your needs!

We specialise in sourcing Startup Business Loans ranging from £1,000 to £20,000,000 with many different finance packages. What’s more all of our Secured Loans have flexible repayment options giving you ultimate control as to how long you’d like the term to last for.

Apply for a Startup Business Loan

To help us understand your requirements and to find the best Startup Business Loan for you, please fill out our Finance Finder, it only takes a few minutes and it is the first step towards that much needed cash-injection for your business. Compare business startup loans online and save yourself time.

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Startup Business Loan Checklist

Once we have helped you find the perfect Startup Business Loan, there are a number of pieces of information that a Loan Company will need to know about you and your business, so we have developed a checklist to make sure you have everything to hand.

  • What security do you have available? The overall worth of your assets will dictate the maximum amount you can borrow, but bear in mind that you can’t usually borrow more than 20-40% of your proposed annual turnover.

  • Your business plan and financial forecasts - Most lenders will want to see that you’ve got a clear plan of how you’re going to use the loan, including backup projections should the worst happen.

  • The loan amount, the term that you wish to repay this over and if there is any flexibility to be included.

  • Bank statements and filed accounts - Having these to hand will make the process as quick as possible.

  • Relevant details of the business and of the business partners.

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The Startup Business Loan application process

  1. Application - You’ll be asked how much you will want to borrow, what you’re going to use it for, and how long you need it. Next, they’ll inquire about your turnover and profit, trading history, payment history and your business sector. They may also need copies of your bank statements and filed accounts, alongside information about your assets.

  2. Agreement in principle - If everything goes to plan, the lender will offer you an “agreement in principle,” setting out how much they are prepared to offer and what the terms are, then the ball is back in your court if you wish to go ahead with the loan application.

  3. If you decide to proceed –The lender will look at your credit history, bank statements, and other details to make sure that your application is viable in practice as well as principle.

  4. Read the terms and conditions and accept – It’s now time to look over the offer agreement terms and provide any further information to the lender should they require it. More importantly you can opt to accept the loan!

  5. Accessing the funds – Once you’ve accepted, the funds will be sent to your business account within a few days in most cases, otherwise known as “drawdown.”

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If you need some free advice our business experts would be happy to help

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