Start-up loan options
New businesses often have little trading history, so options include government-backed Start Up Loans, personal loans and some specialist lenders.
In the UK, the government-backed Start Up Loans scheme lends from £500 to £25,000 per person, repaid over 1 to 5 years at a fixed rate, with free mentoring. Start Up Loans are personal loans, so you're personally responsible for repaying them. Check the current fixed rate on the British Business Bank website.
Worked example
Borrowing £10,000 at 6% over 5 years costs £193.33 a month, £11,599.68 in total. Enter the rate from your own offer.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Before you borrow
Build the repayments into your business plan and cash flow forecast, and make sure you could still repay if the business takes longer than planned to make money.
Inputs for the start up loan calculator
Amount to borrow
How much you need to start the business.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many years you'll repay over.
CALCULATOR QUESTIONS
Start-up loan calculator questions
How much can I borrow with a Start Up Loan?
From £500 to £25,000 per person, repaid over 1 to 5 years.
Who repays a Start Up Loan?
You do. It's a personal loan used for business purposes, so you're personally liable.
What interest rate will I pay?
Start Up Loans have a fixed rate set by the scheme; check the current rate on the British Business Bank website. Other lenders set their own rates.
Does this include fees?
No. Add any fees from your offer when comparing the total cost.