Supporting Your New Venture with Government Business Loans

If you’re looking for advice and support to help get your new business up and running in the UK, you may wish to think about getting started with a government business loan. Here, we’ve provided a guide on the loan schemes available to you and some advice on what you’ll need to watch out for if you want your application to be a success.

Table of Contents

  1. Getting Started
  2. Small Business Loans
  3. National Loan Schemes
  4. Why Get a Loan?

Getting Started with Government-Backed Business Loans

Whenever you’re looking to set up a new business, you’ll need to ensure you have the finances for it. In some cases, this may mean turning to the government for support and taking advice from their experts and support from initiatives to find the funding you need.

To help you get started, you’ll have full use of the government’s business support tool. This gives you a report on finance types, startup or growth advice, and local and national helplines that are tailored to your particular business needs.

In the Time of COVID-19

Currently, the government is also running several schemes to help businesses affected by the Coronavirus pandemic. This includes the Coronavirus Business Interruption Loan Scheme, which helps to secure loans for viable businesses that need to respond to cash flow pressures.

To find out more, or to find help for businesses based outside of England, please see the government page.

The UK Government’s Small Business Loans and Support

In most cases, if you have a new business and you’re looking for a government-backed loan to take your company forward, you can apply for a Start-Up Loan. These differ from regular business loans in that they are unsecured personal loans, and may range in size from £500 to £25,000.

You’ll be entitled to free support and expert guidance throughout the process, which will include help with writing out your business plan. If you’re then successful with your application for a Start-Up Loan, you’ll be able to get up to 12 months of free mentoring.

To apply for a Start-Up Loan, you must meet the following criteria:

  • You live in the UK
  • You’re 18 or older
  • You have (or plan to start) a UK-based business that’s been fully trading for under 2 years (less than 24 months)

Start-Up Loans are government-backed and have a fixed interest rate of 6% per year. This can be paid back over a period of one to five years, with no application fee and no early repayment fee.

National and Regional Funds and Loan Schemes

Small businesses can apply for a range of loans across the country as well, depending on the region they’re based in. These schemes and funding services are all backed by the government and are designed to help newer or small-scale businesses access the financial support they need to run. Some of them are even free, and can offer everything from advice and support to the exact funds businesses need in their local area.

To see a complete list of the current schemes available, please see the UK Government’s page on finance and support for your business.

If You’re Planning to Export Goods

If you have a UK-based company but you’re looking to expand and tackle an overseas market, the Department for International Trade may be able to provide advice and support through the Exporting is Great campaign. Through their services and with one of their expert advisers to guide you, you’ll be able to access markets abroad and successfully navigate your way through a host of business practices conducted in other countries.

Why Get a Government Business Loan?

It is possible for other lenders, such as banks, to reject an application for a business loan, if the company asking doesn’t meet the criteria given. In most cases, new or small businesses will miss out on getting their application to go through because:

  • The company or the person applying has a poor credit score
  • The business is “too new”, and has no evidence of its ability to pay of debts
  • The person or company asking for the loan already has a number of debt and credit facilities, and lenders may be reluctant to add to this
  • The person or company applying cannot provide security in the form of assets or personal guarantees
  • The industry sector the company is in maybe high-risk, so lenders may be reluctant to provide finances to businesses within it
  • The company’s business plan may not be well thought out, or it may seem incompatible with how the firm intends to use the loan

In any of these cases, it’s easy to feel frustrated and become concerned that you will not be getting the financial support you need to get your business off the ground. That’s why government-backed lenders and support schemes are always available instead, offering you a chance to get your company up and running when you need.


Need a Premises for Your New Business?

If you’re starting a new business and you’re looking to save money, you might be able to put away cash for your firm simply by choosing the right property. Renting an office space is often the ideal solution, as you won’t be worried by fees on maintenance or setting up services such as phone lines.

By getting in touch with us and speaking to one of our experienced team members, you’ll be able to choose from our fantastic selection of office spaces across London. We’ll set you up in a space that suits all your needs, whether you need room to expand for employees and equipment alike, or even if you’d like to network and share facilities with other firms.

If you’re in the first stages of setting up your business and need a meeting room to host and impress your potential investors, we’ll even be able to provide you with the space that fits your requirements. Contact us and let’s discuss what your business needs today.