Start up business loans for new limited companies
A start up business loan is money borrowed to start a business, or to fund one that has only just begun trading. A new UK limited company has two main routes. The first is the government-backed Start Up Loan: £500 to £25,000 at a fixed 7.5% a year, lent to you personally, not to the company (GOV.UK). The second is a loan to the company from one of the few lenders that take young businesses. This page is for limited companies, LLPs and partnerships with four or more partners. It is not for sole traders.
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Founder & Managing Director, Muswell Rose, FundBiz
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind FundBiz. His background runs through commercial finance, mortgages and fintech, including as managing director of an invoice finance business. He oversees FundBiz's guides and lender reviews.
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At a glance
- What it is
- Borrowing to start or grow a new business
- Route 1
- Government Start Up Loan, a personal loan to the founder
- Route 2
- A loan to the company from a lender that takes young businesses
- Main hurdle
- No trading record, so the director's own credit counts
- Who this page is for
- Ltd companies, LLPs and partnerships of four or more partners
Sole traders: this page is not for you
FundBiz only covers limited companies, LLPs and partnerships with four or more partners. If you are a sole trader, we cannot help. The government Start Up Loan is open to sole traders, so you can go to the scheme directly through GOV.UK.
The government Start Up Loan
Start Up Loans is a government-backed scheme. GOV.UK says, as checked on 26 October 2026:
- You can borrow £500 to £25,000 to start or grow your business.
- It is an unsecured personal loan, not a business loan, and you need to pass a credit check.
- The interest rate is fixed at 7.5% a year.
- You repay over 1 to 5 years. There is no application fee and no early repayment fee.
- You get free help with your business plan, and successful applicants get up to 12 months of free mentoring.
- You must live in the UK, be 18 or over, and have (or plan to start) a UK business that has been fully trading for less than 5 years.
Source: GOV.UK, Apply for a Start Up Loan for your business, checked 26 October 2026.
Because the loan is personal, you owe it even if the company stops trading. You can then lend the money on to your company. For how the scheme works in more detail, see our Start Up Loans scheme guide.
Example, our own arithmetic: £10,000.00 at a fixed 7.5% a year over 60 months is about £200.38 a month, or £12,022.77 in total. Try your own figures in the business loan calculator.
Loans to a young limited company
A few lenders lend to the company itself from early on. This is what each one publishes on its own site. We have not applied, and a lender can still say no to a company that meets every point.
| Lender | Trading time it asks for | Other rules on its page |
|---|---|---|
| iwoca | No minimum stated. It says it still lends to newer businesses | Loans are capped at £10,000 if you have traded for under a year |
| Bizcap | At least 4 months | Monthly revenue of at least £12,000. It charges an establishment fee, agreed upfront |
| Fleximize Flexiloan Lite | At least 6 months | Monthly turnover of at least £5,000. Terms of 3 to 12 months |
| 365 Business Finance | At least 6 months | Card sales of at least £10,000 a month. This is a merchant cash advance, not a loan: you repay a share of card sales |
| Fleximize Flexiloan | 12 months or more (Fleximize) | Fleximize's main business loan |
Sources: iwoca business loans, Bizcap, Fleximize business loans, 365 Business Finance FAQs, each checked 26 October 2026.
For these lenders ranked, with how we rank them, see business loans with no trading history.
What opens up as you trade
Only where a lender publishes the rule itself:
- Before you start trading: the government Start Up Loan.
- In your first year: iwoca says it lends to newer businesses, up to £10,000 until you have traded for a year.
- After 4 months: Bizcap, if monthly revenue is at least £12,000.
- After 6 months: Fleximize Flexiloan Lite, and 365 Business Finance if you take card payments.
- After 12 months: iwoca's £10,000 cap for businesses under a year old no longer applies, and Fleximize's main Flexiloan opens up (iwoca, Fleximize).
- After 24 months: we did not find a lender in our checks that publishes a rule at two years. Many lenders look at filed accounts, so ask each lender what it needs.
Why the director's credit matters so much
A new company has no accounts and little bank history, so a lender looks at the director instead. So missed payments on your own credit file can count against the company. Expect to be asked for a personal guarantee on an unsecured loan: a promise to repay yourself if the company can't. Our page on unsecured business loans explains how that works.
Other ways to fund a new company
- Lend your own money to the company through a director's loan account.
- Asset finance for a vehicle or equipment, where the asset is the security. Ask each provider for its own minimum trading time. See asset finance.
- A credit card for small, regular spending you clear each month. See credit cards for startups.
- Grants for a set purpose. See our grants finder.
Will you be asked for a personal guarantee?
On unsecured borrowing the answer is usually yes. With no asset pledged, a director’s guarantee is normally how the lender keeps the decision-maker aligned with repaying.
A personal guarantee is a written promise by a director or shareholder to repay the facility personally if the company can't. It sits outside the protection of limited liability, which is precisely why it is worth understanding before you apply rather than at signing.
What changes the answer
- What stands behind the debt. Asset finance is secured on the asset being funded and invoice finance is advanced against the debtor book, so guarantees there are more often limited or waived.
- Trading history and filed accounts. A longer record of filed accounts and consistent turnover gives a lender more to underwrite without reaching for a guarantee.
- Facility size relative to the business. The larger the exposure against the company’s own numbers, the more likely a guarantee is asked for.
- Lender policy. This varies genuinely between lenders on identical cases, which is the practical argument for comparing rather than accepting the first offer.
What to check before you sign one
- Whether the amount is capped or unlimited, and whether it covers interest, fees and costs as well as the principal.
- If there's more than one director, whether liability is joint and several, meaning any one of you can be pursued for the whole amount.
- When the guarantee is released, and whether it survives repayment, refinancing or your leaving the business.
- How it interacts with any existing debenture or charge already granted to another lender.
A guarantee is a personal legal commitment. Take independent legal advice before signing one. FundBiz is not a lender and does not give advice: this is information only.
Frequently asked questions
What is a start up business loan?
It is money borrowed to start a business, or to fund one that has only just begun trading. For a new UK limited company there are two main routes: the government-backed Start Up Loan, which is a personal loan to the founder, and a commercial loan to the company itself from a lender that takes young businesses.
How much is a government Start Up Loan?
GOV.UK says a Start Up Loan is £500 to £25,000, at a fixed interest rate of 7.5% a year, repaid over 1 to 5 years, with no application fee and no early repayment fee. It is an unsecured personal loan, so you owe it yourself, not the company. Figures checked on GOV.UK on 26 October 2026.
Can a limited company with no trading history borrow?
Yes, but the choice is small. The Start Up Loan is open before you start trading. iwoca says it still lends to newer businesses but caps loans at £10,000 until you have traded for a year. Most other lenders we checked publish a minimum of 4 to 12 months of trading.
Do start up loans need a personal guarantee?
A Start Up Loan is a personal loan, so you are already personally liable for it. For a commercial loan to a new company, expect the lender to ask a director for a personal guarantee, because the company has no track record. Ask each lender before you go ahead.
Can sole traders use FundBiz for a start up loan?
No. FundBiz is for UK limited companies, LLPs and partnerships with four or more partners. Sole traders are out of scope. The government Start Up Loan itself is open to sole traders, so a sole trader can go to the scheme directly through GOV.UK.
Related pages
If you were turned down by the scheme, see declined by Start Up Loans Company. To work out a monthly repayment, use the business loan calculator. To compare young-company lenders, see business loans with no trading history.
Check your options
Check your options →FundBiz is not a lender and does not run a credit check. Limited companies, LLPs and partnerships with four or more partners only.