A hand-up for start-ups: 33,000 new small business loans as Government scheme expands by £900m
- Start-up loans of up to £25,000 are now available for start-ups that have been in business for up to three years (previously two years).
- New “secondary loans” for companies that have been operating for up to five years
- Loans to provide much-needed support for UK innovators and entrepreneurs
An £884m loan scheme for new businesses is set to be greatly expanded, providing much-needed finance for the UK’s array of innovative start-ups, Business Secretary Jacob Rees-Mogg announced today (Sunday 25 September).
The start-up loan scheme has provided more than 95,000 loans to start-ups across the UK since its launch in June 2012, offering an average of just over £9,000 in support.
With 33,000 new credits available, the program’s eligibility will be expanded to help companies trade for up to three years instead of two. Companies can now apply under the new criteria.
Start-up loans offer a 6% fixed interest rate, as well as mentoring, support and funding for aspiring business owners across the UK and offer support to those who may find it difficult to obtain credit from traditional lenders.
Alongside this, a new second loan will be made available to companies operating up to five years, providing eligible companies between 3 and 5 years with much-needed government-backed financing to support their expansion at a crucial moment.
Business Secretary Jacob Rees-Mogg said:
“This government has a relentless focus on fueling growth to create better jobs, raise wages and fund our vital public services like the NHS.
“Fostering entrepreneurship and the growth of new businesses is crucial to growing the economy and raising living standards.
“From a hair salon in Wales to a furniture shop in Northern Ireland to a cake seller in the Lake District, the expansion of the start-up loan scheme will support these small businesses during this challenging time and enable them to thrive – and jobs and everywhere.” Opportunities to create the UK.”
The scheme has supported businesses across the UK, with more than £54m allocated to businesses in Scotland, £42m in Wales and over £12m in Northern Ireland.
The expansion of the start-up loan program follows the 2021/22 spending review, where the government committed to provide 33,000 loans to the program over the next three years.
The extension offers further government support for companies struggling with cost pressures and complements measures announced by the Chancellor earlier this week, including the introduction of the Energy Bills Relief Scheme to help them with energy bills, reform of labor rules for payroll accounting and the simplification of the alcohol tax system.
It also builds on important measures announced by the government, particularly for small businesses, including expanding the £4.5 billion Recovery Loan Scheme and making the Help to Grow schemes available to thousands of businesses across the country UK offer mentoring and free software.
Michelle Ovens CBE, Founder of Small Business Britain said:
“The expansion of funding opportunities for start-ups and growing businesses will certainly be welcomed by small businesses as a positive step in unlocking their potential. Access to finance is vital for entrepreneurs to thrive, and with rising costs and challenges across the board, they need all the help they can get now to achieve their ambitions.”
British Business Bank Managing Director of Start Up Loans Richard Bearman said:
“We are pleased to be able to expand the reach of the start-up loan program to support companies that need additional support during times of ongoing economic turmoil.
“This extension of the program will allow us to work with those businesses that may just be getting started when the pandemic hit, or ready to expand now that they are getting back on their feet. We want to make sure these companies are not left behind.”