Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.

Getting Started

Securing a start-up loan

The Start Up Loans programme provides both the money and mentoring to get your business off the launch pad

Securing a start-up loan

You’ve done your research, defined your audience and written your business plan, but now you need financial backing to bring your start-up to life. No matter what you’re trying to launch, whether it’s a cold brew coffee company or a creative agency, without adequate funding in place there’s a risk your venture will remain nothing more than a pipedream.

Take PJ Farr, a former soldier in the Princess of Wales Royal Regiment serving in The Falklands Islands. The eureka moment for his award-winning broadband business came when he took a selfie with a penguin and sent it to his father-in-law. In doing so, PJ realised that he had a stronger wi-fi connection on the remote island than he did back at home in Guilford.

His solution was to found UK Connect, a broadband supplier for the construction industry. Today, six years later, the company has a multi-million-pound turnover and works with some of the biggest names in the housebuilding industry, including Barratt Homes and Taylor Wimpey. None of this would have been possible however, without an £18,000 loan PJ received from the Start Up Loans programme, a UK government-backed scheme that provides financial support and mentoring to new and early stage UK businesses. PJ secured the loan with help from X-Forces, an entreprise which enables veterans to join the world of business.

A financial lifeline

Since it was founded in 2012, the Start Up Loans programme has helped many aspiring entrepreneurs such as PJ to succeed. At the last count, the scheme has awarded more than 65,000 loans, totalling £510 million across the UK1.

The Start Up Loans programme, part of the British Business Bank, provides fixed-interest loans and mentoring support to aspiring business owners across the UK who might be struggling to access other forms of finance, explains Managing Director Richard Bearman.

Individuals can apply for business loans of up to £25,000 (with a maximum of £100,000 available per business) at a 6% fixed interest rate per annum. As the loan is unsecured, there’s no need to have assets or a guarantor in place to support an application. What’s more, the programme is inclusive. Of those who have received a loan since 2012, almost two-fifths (39.3%) were women, one in five (22%) came from Black, Asian and Minority Ethnic communities (BAME), and more than a third (36.5%) were unemployed when they applied for the loan, reflecting the diversity of the UK’s start-up community2.

Mentoring makes a difference

In the early stages of launching a business, having a mentor to act as a sounding board that you can bounce ideas off is invaluable. That’s why the Start Up Loans programme works with a national network of Delivery Partners who help applicants to not only polish their business plans, but most importantly, provide practical support to ensure entrepreneurs realise their full potential.

From the off, all prospective business founders are guided through the application process by a Delivery Partner. They also have a wealth of useful resources and templates at their disposal to help them create the business plan, cash flow forecast and personal survival budget that need to be submitted with each application. Those who manage to successfully secure a loan are then assigned a mentor and offered 12-months of free, practical support as well as access to exclusive business offers.

While it goes without saying that a cash injection is crucial to getting any new venture up and running, having a guiding hand to help navigate the inevitable bumps along the road can make the difference between survival and failure in those early years. As PJ puts it: “The support [from the Start Up Loans programme and X-Forces] was invaluable, and I wouldn’t be where I am today without them.”

1 August 2019, data taken from

2 Figures drawn from data on the delivery of loans up to 15 May 2019, when the programme passed the £500m mark, The Evaluation of Start Up Loans: Year 3 Report is available on the British Business Bank website.

Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.