Business loan declined by Start Up Loans Company, what next?
The British Business Bank Start Up Loans Company has declined your application. Start Up Loans is a government-backed scheme for UK businesses that are starting up or have been fully trading for less than 5 years, offering personal loans of £500 to £25,000 at a fixed 7.5% a year to the people running the business rather than loans to the company (GOV.UK). A decline points either to an eligibility mismatch (for example, the business has traded too long for the scheme) or to affordability or credit issues for the individual applicant.
Why this triggers a decline
The Start Up Loans Company doesn't publish how often each decline reason occurs. Common reasons include: the business has been fully trading for 5 years or more (the limit was 36 months until 6 April 2026, when it rose to 60 months), the applicant's personal credit or affordability assessment fails, business plan documentation is incomplete or inconsistent, residency or right-to-work issues for the founder, prior Start Up Loan still in repayment with no headroom for a second loan, and sector exclusions (gambling, adult, money-services, regulated financial services).
Alternatives that work
- iwoca for limited companies and LLPs with some trading history
- Asset finance against specific equipment if any business assets exist
- Specialist MCA providers once card flow has built up (365 Business Finance, Liberis)
- Director-led personal lending routes if the underlying purpose is founder cash injection into the business
- Equity routes (SEIS, EIS) for pre-revenue technology and innovation businesses
Lenders that may consider this
- iwoca (UK limited companies and LLPs)
- Capify (short-term business loans once trading passes 12 months)
- Liberis (card-flow MCA for established retail and hospitality)
- Specialist asset finance lenders for equipment-backed deals
- SEIS and EIS investor networks for pre-revenue innovation businesses
What to do first
- Ask the Start Up Loans business support partner that handled your application (for example BizBritain) for the main reason for the decline.
- If the issue is trading age (5 years or more), look at commercial lenders instead.
- If the issue is founder personal credit, address the underlying credit issue (satisfy CCJs, build personal credit history) before reapplying.
- If the business plan was the issue, rework the financials and assumptions; the scheme rejects loose or inconsistent projections.
- If pre-revenue and the underlying need is equity rather than debt, pivot to SEIS or angel routes rather than reapplying for debt.
Not for
Businesses that have been fully trading for 5 years or more (they sit outside scheme eligibility), sole-trader applicants (the FundBiz enquiry form is for limited companies, LLPs and partnerships with four or more partners), or anyone needing more than £25,000 each (the scheme's limit per applicant). Those cases are better suited to commercial lenders.
Send an enquiry
Tell us what you need in 2 minutes. FundBiz is not a lender and does not run a credit check. We pass your enquiry to a business finance broker, who will contact you about your options. For limited companies, LLPs and partnerships with four or more partners.
Send an enquiry →Last updated: .