If you’re preparing to launch a new business or are still in your first two years of trading, you could be eligible for start-up loans of up to £100,000.

Start-up loans – Where do I apply?

This scheme comes from The Start Up Loans Company (TSULC) – the brainchild of the government-owned British Business Bank. The organisation was formed to provide finance and support to new businesses across the nation.

TSULC operate through specialist delivery partners located throughout the UK. These delivery partners are the experts in their local areas, meaning they can direct the money to the sectors where they believe the area needs the most.

Not all businesses are eligible for the loan – you can click here to check which sectors will not be able to receive funding.

The delivery partners also provide experienced business mentors to the companies they fund. They’ll be there to guide you right from the initial launch or through your expansion. They’ll advise you on how to make your business survive and flourish after receiving the loan.

To find your closest start-up loan delivery partner, please click here.

Start-up loans – My application

When putting your application together, you will need to convince the delivery partners that your company is a good investment.

If you’re looking for help to launch your company, your delivery partner will want to see some kind of proof that there is a demand for the product or service you wish to provide. Letters of intent to buy will show a desire exists but providing invoices shows that your business will be able to start turning money over once the funding is received.

Invoices will also come in handy if you’re applying for a loan for your young business. The delivery partners won’t need an exhaustive list of all your sales to date but just enough to get an idea of your cashflow and estimated turnover.

Before you apply, make sure you and your partners brush up your CVs. Before they give any kind of funding, TSULC will want to have an idea of who they’re giving it to. Take care to provide extra detail in areas that strengthen your credibility in the sector you’re operating in.

You’ll also need to show a strong business plan, including:

• A summary of your company or idea
• Descriptions of what it is you’re going to sell
• Who you’re going to sell it to (including any current sales, letters of intent to buy, and marketing methodologies)
• A realistic cashflow and profit and loss forecast
• All of your market research to show people are already spending money in your sector
• Competitor analysis and what sets your business apart
• Details of your suppliers
• Any legal and insurance requirements
• The current or planned location of your business
• Invoicing and payment methods

Start-up loans – How much am I eligible for?

The Start Up Loans Company will lend up to £25,000 for each partner your company up to a maximum of £100,000 where there are four or more partners.

But, we strongly recommended that you only ask for what you actually need in your application. Your cashflow forecasts and profit/loss margins will work as proof of how much you actually require. If your 2-year forecast only shows a one-time deficit of £10,000, but you’re asking for the £25,000 maximum, you’ll lose credibility.

If your business is already up and running and you need help with your cashflow forecasts, speak to the Burton Beavan team.

Start-up loans – When will I receive the funding?

Behind the scenes at TSULC, a lot of efforts goes on ensuring that the funding goes to the right places. The scheme loans out government money so all the necessary checks and reviews have to take place before decisions can be made.

Because of this, the application process can take up to three months. That means you may have to look into alternative solutions if your existing business needs an immediate cash injection to survive.

Start-up loans – What will my repayments look like?

The start-up loans scheme has been put in place to help new and young businesses grow so the interest rate is fixed at 6% for the life of the loan. That means you know exactly what you’ll be repaying each month and for how long, regardless of changing interest rates elsewhere.

Start-up loans – What else should I know?

The money you receive can only be used for business purposes but is treated as a personal loan. Should your business fail, you and your partners will be personally liable to repay the rest of the loan.

It also means that your own personal credit history will be checked during your application. If you have a poor credit history, it’s very unlikely you’ll be accepted no matter how good your business plan is.

Companies that have been trading for two or more years will not be able to access the funding under any circumstances.

Start-up loans – What should I do next?

If you’re interested in applying for funding for your new-start or early-stage business, speak with Burton Beavan on 01606 333 900 or email us at hello@burtonbeavan.co.uk.