Products available to new companies
Start Up Loans, administered by the British Business Bank, are specifically designed for businesses under 36 months old. They offer unsecured loans of up to £25,000 per director (up to £100,000 per business for multiple directors) with a fixed interest rate of 6% per annum over 1 to 5 years. They are available to businesses at pre-revenue stage.
Asset finance is available to new companies because the asset being funded acts as security. If you need to purchase equipment, vehicles, or machinery, asset finance lenders will often approve a new company where they would not approve an unsecured loan. Revenue-based finance and merchant cash advances can be accessed after 3 to 6 months of consistent card or bank revenue.
- Start Up Loans: up to £25,000 per director at 6% fixed, no prior trading required
- Asset finance: available based on asset security, not trading history
- Invoice finance: available after 3 to 6 months of B2B invoicing
- Revenue-based finance and MCAs: available after 3 to 6 months of consistent revenue
- Personal loans or director loans: directors with strong personal credit can provide capital
- Government grants: non-repayable funding through Innovate UK, local enterprise partnerships
What new companies can do to improve their position
Building a business bank account with consistent, well-managed cash flow from day one creates the financial track record that lenders look for. Keeping your personal credit profile strong is equally important, as many lenders use director personal credit as a proxy for financial responsibility in the absence of company credit history.
Working with an accountant from the outset and maintaining clean bookkeeping records makes it significantly easier to provide lenders with reliable financial information quickly when you are ready to borrow.
Frequently Asked Questions
Can I get a business loan before my company has made any sales?
For most commercial lenders, no. However, Start Up Loans are available to pre-revenue businesses with a viable business plan. Personal loans from directors, family, or friends are also an option. Some grant funding is available for innovation-focused businesses regardless of revenue stage.
How long do I need to trade before I can access mainstream business finance?
Most mainstream lenders require 12 months of trading and at least one set of management accounts. Some specialist lenders accept 6 months. The Growth Guarantee Scheme has no specified minimum trading period, though individual accredited lenders typically require 12 months.
What is the difference between a startup loan and a business loan?
A Start Up Loan is a specific government-backed product for businesses under 36 months old, with a fixed 6% rate and no early repayment charges. A conventional business loan from a commercial lender typically offers larger amounts but requires more established trading history and usually charges higher rates for new companies.