Frequently Asked Questions

A Start Up Loan is a loan to help you start your business. The loan is a personal loan given for business purposes. Your loan application will be considered according to the needs of your business.

No. A grant is a non-repayable fund provided by an individual or an organisation for a particular purpose. Grants are often awarded to non-profit entities, as well as businesses or individuals. The process for applying for a grant for a specific business will almost always include some level of compliance and reporting, which will then be assessed for eligibility by the grant maker. You can apply for a grant from the government, the European Union, local councils and charities. Generally will not need to pay a grant back, but there is a lot of competition and they are almost always awarded for a specific purpose or project.
The difference between a grant and a Start Up Loan is a Start Up Loan must be repaid.

Fill out the application form on the website, and on receipt of your application, you will be contacted within 4 working days. We will explain the next steps for you to progress with your application.

The Start Up Loans Company provides criteria to every Delivery Partner to ensure a consistent approach is followed. However Startup Direct will ultimately base the decision on the individual and the business plan.

The Start Up Loans Company lends on the basis of need. The average loan size is £6,000, but the final amount will be determined by your business plan.

It is currently set at a fixed rate of interest – 6.2% nominal. The interest received is recycled back into the programme to allow us to support more entrepreneurs.

No. A Start Up Loan is a personal loan, so a personal bank account is fine.

If you have not been contacted within 4 working days, please email apply@startupdirect.org and we will do our best to help you.

Yes, individuals can only receive one loan. This allows us to support the maximum number of people to start their own business. If you are starting a business with others who are eligible to apply for a Start Up Loan, you can all submit applications for the same business.

The application process is a minimum of 3 weeks. The length of the process depends on the size of the loan you require, the documents you provide, the support you access and the stage of your business startup. Businesses at only the ideas stage will require more support.

Anybody living in the UK at least 18 years of age, at the time of application can apply for a Start Up Loan. You may have already started your business, but you must not have been trading for longer than a period of 24 months. You must have the legal right to remain in the UK for the duration of your loan term and the right to be self-employed.

Yes – this is most likely.

Applicants for a Start Up Loan must not have been or currently be declared bankrupt and/or have any outstanding IVA’s.

If you have a Tier 4 Visa, then you are NOT eligible to apply for a Start Up Loan, as self-employment is excluded. If you are able to secure a Tier 1 Graduate Entrepreneur Visa, then you may be eligible to apply.

A mentor is an individual with business experience who will provide support and guidance to help make your business a success. They are usually assigned to support you after your loan has been approved, by your allocated Delivery Partner. Find out more information about the Start Up Loans mentoring programme.

Once you have a loan, you will be offered on-going business support from Startup Direct as well as access to useful products and services provided by our Corporate Partners.

The ability to provide guidance, along with the desire to support the next generation of entrepreneurs. A good mentor will not tell you how to run your business; instead they will assist you in learning how to make plans and strategies that will enable you to make the right decisions for your business.

At minimum, you will receive two hours of support in the first three months after receiving your loan. After the first three months, your mentor will still offer one hour per month of support. Some mentors can provide additional forms of support. You will be provided with these details during your application for a loan.

Yes. If an individual goes into default they can seek support from Startup Direct or from their mentor. However, it is not the mentor’s responsibility to ensure that an individual keeps up with repayments on a Start Up Loan, and irrespective of the circumstances of your mentoring relationship, individuals are still responsible for paying back a Start Up Loan according to their agreed repayment plan.

If you would like to become a mentor, please fill out the application form in the Mentoring section.

You are required to pay back the loan within 1-5 years. The exact term will be agreed as part of your application process.

A Start Up Loan is a personal loan and therefore still remains payable in the event a business ceases trading. In general all loan providers follow standard market practice when loan repayments are missed and take a fair and reasonable approach. When a loan recipient fails to make a payment, contact is attempted to try and determine the reasons for the payment being missed. This is then followed up by an email and or letter stating that a repayment(s) has been missed and what they should do to remedy the situation. If a loan recipient is having difficulty in meeting their loan obligations they should inform their loan provider as soon as possible. The loan provider will then try and work with the loan recipient to come to a reasonable and fair outcome to ensure they continue to meet their loan obligations. If a loan recipient fails to respond to attempts to contact them with respect to their missed loan repayments, a loan provider may then look to recover the outstanding payments through various means such as, but not limited to, issuing a CCJ or they may be referred to an approved Debt Collection Agent.
Loan Provider: If you are unsure who your loan provider is, the company and details are provided on the loan agreement that you signed prior to drawdown of the funds.

The NEA scheme and the Start Up Loans Programme are mutually exclusive packages of support offered by government to help people set themselves up in their own business.
The NEA scheme is a programme under the Department for Work and Pensions (DWP) to provide individuals on certain benefits in England, Wales and Scotland with support in preparing to start their own business. At the end of the programme, individuals will receive an NEA weekly allowance and the opportunity to apply for a Start Up Loan. While the Start Up Loans Company manages the delivery of loans referred through the NEA scheme, DWP oversees the mentoring and support function.
Individuals interested in joining the NEA scheme must go through DWP by applying to their local Jobcentre Plus. Further information on how to apply for the NEA scheme can be found on the DWP website or through your local Jobcentre Plus office.
Please note that if you approach Start Up Loans directly without first going onto the NEA scheme, you will not be eligible for the NEA weekly allowance.

No. Loans referred through the NEA scheme are Start Up Loans, and you cannot have two Start Up Loans running concurrently.
If you take a loan through the NEA scheme, you may later be able to apply for a second Start Up Loan through the Start Up Loans Programme when your business is ready for more funding. In this instance you must: i) demonstrate the business case for more funding; ii) seek further pre-application support through the Start Up Loans Programme; iii) not have been in arrears for 3 consecutive months; and iv) not have been trading for more than 12 months. The loan granted through the NEA scheme will need to be paid off prior to or at the point of drawing down the second Start Up Loan. Therefore, the loan granted under the Start Up Loans Programme will likely be issued in two tranches: one to pay off the existing loan and one with the remaining funds.
Where possible, you must go back to the Delivery Partner who granted your first loan through NEA. This is the organisation listed on your loan documentation. Please see a list below:
•   Street UK (CDFA)
•   One London Ltd t/a GLE oneLondon (GLE)
•   The Enterprise Fund Ltd. (BFS)
•   Five Lamps (Five Lamps)
•   Capitalise Business Support Limited (LDBG)

It is the same as under the Start Up Loans Programme. The Start Up Loans Company lends on the basis of need. The average loan size is £6,000, but the final amount will be determined by your business plan. The viability of an applicant’s business plan and cashflow, and their ability to repay the loan will be taken into account when making lending decisions.

You must bring your account current, and not have been in arrears for 3 consecutive months prior to your application. To note, Start Up Loans are only given to businesses that have been trading less than 12 months. If your business has been trading for a while, please check that you will still be eligible after this time.

Yes, you can. You cannot be on Jobseeker’s Allowance, but are able to receive the NEA Allowance.

Yes, you may apply through the NEA scheme at the Jobcentre Plus. However, please be aware that the loans through the NEA scheme are also Start Up Loans and will be held to the same level of scrutiny as they would be under the Start Up Loans Programme.

Loans through the NEA scheme are also Start Up Loans. Where possible, you must go back to the Delivery Partner you applied with through NEA. Please see a full list below:
•   Street UK (CDFA)
•   One London Ltd t/a GLE oneLondon (GLE)
•   The Enterprise Fund Ltd. (BFS)
•   Five Lamps (Five Lamps)
•   Capitalise Business Support Limited (LDBG)

The Start Up Loans Company has appointed over 55 Delivery Partners covering all regions across England, Wales and Northern Ireland to deliver the programme. Startup Direct is one of these. Delivery Partners are a range of organisations with experience in supporting businesses. Their role is to market Start Up Loans to their network, to provide pre-loan support, make the loan decision and to provide on going support and mentoring to loan recipients. All Delivery Partners are closely monitored by the Start Up Loans Company to ensure a consistent approach is taken across the board. All Delivery Partners offer the same loan terms, the method of pre- and post-loan support varies between partners. You can see a list of all Start Up Loans Company Delivery Partners here.

Once you have a Delivery Partner you cannot transfer your application to another partner.

We are working with Islamic finance experts to create a Sharia compliant offer. Those wishing to apply for a Sharia compliant loan can do so here.