What is a start up loan?

Start up loans in the UK are used to help start or grow a business that has been trading less than two years. It's available to companies in the UK that need help to start or grow, providing them with financial but also practical support in the form of 12 months free mentoring.

How does a start up loan work in the UK?

A Start Up Loan works by allowing each owner or partner in the business, aged 18 or over to apply individually for a loan up to £25,000 and to a maximum total of £100,000 per business.

The interest rate is currently fixed at 6% and repayments are between 1 to 5 years.

Have you thought about Invoice Finance as a cash flow loan solution for your business?

Invoice finance allows you to release cash quickly from your unpaid invoices.

As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available such as factoring (mainly invoice factoring and debt factoring) and invoice discounting to businesses depending on the situation and the level of control they require in collecting unpaid invoices.

We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our confidential invoice discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.

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What are the advantages and disadvantages of a start up loan?

Advantages of a start up loan:

  • Access to cash to help build the business without using personal money
  • The unsecured nature of the loan allows retention of ownership and control of the business
  • Repaying the loan provides an opportunity to build up a history of good credit, useful for possible future finance
  • The loan offers reasonable interest rates and flexible repayment terms with the security of backing by the government
  • All profits from growth belong to the business owners
  • Access to mentors and free courses are designed to help guide you towards a running a successful business
  • No application fee or early repayment fee

Disadvantages of a start up loan:

  • It can be difficult to qualify for a start up loan as it will depend on the specific requirements of individual lenders
  • You may be inexperienced in how to successfully utilise the loan – though a mentor may help
  • The repayments could put pressure on your monthly cash flow and potentially risk your personal credit rating if you fail to meet monthly payment

Get in touch

Contact our friendly UK advisors on our freephone

0808 250 0859

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday

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The benefits of invoice finance companies such as Novuna Business cash flow

  • Boost your cash flow without having to wait up to 120 days for your customers to pay you

  • Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled

  • Access funds within 24 hours from initial appointment with our revolutionary digital onboarding process

  • Benefit from our in-house credit control processes, allowing you to focus on running your business, instead of chasing clients for payment

  • Six month trial period followed by a rolling contract

Want to understand more Cash Flow Finance terms?

Our Cash Flow Resource Hub has been set up to help SME's with cash flow finance advice, tips and resources to help with their cash flow position.

We explore ways you can begin improving your cash flow situation and start getting your business on track to positive cash flow.

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If your customers are consumers, please contact our consumer finance division.

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