A boon to start-ups: 33,000 new small business loans as government’s £900m scheme expands

  • Start-up loans of up to £25,000 now available for start-ups that have been in business for up to 3 years, instead of 2 years

  • new ‘second loans’ available for businesses that have been in business for up to 5 years
  • Loans to provide much-needed support to UK innovators and entrepreneurs.

An £884m loan scheme for start-ups will be greatly expanded, bringing much-needed funding to innovative UK start-ups, Business Secretary Jacob Rees announced today (Sunday 25 September). -Mogg.

The Startup Loan Program has provided over 95,000 loans to start-ups across the UK since its inception in June 2012, offering an average support of just over £9,000.

With 33,000 new loans available, the program’s eligibility will be expanded to support businesses that trade for up to 3 years, instead of 2 years. Companies can apply immediately under the new criteria.

Startup Loans provide a fixed 6% interest rate, as well as advice, support and financing for aspiring business owners across the UK, supporting those who may find it difficult to obtain loans from traditional lenders .

Alongside this, a new second loan will be available for businesses operating for up to 5 years, providing eligible businesses between 3 and 5 years old with much-needed government-backed financing to support their expansion at a crucial time.

Business Secretary Jacob Rees-Mogg said:

This government is relentlessly focused on driving growth to create better jobs, raise wages and fund our vital public services like the NHS.

Fostering entrepreneurship and the development of new businesses is critical to growing the economy and raising living standards.

From a hairdresser in Wales to a furniture business in Northern Ireland to a cake vendor in the Lake District, the expansion of the Startup Loan Program will support these small businesses through this challenging period and position them for growth. creating jobs and opportunities around the world. UK.

The scheme has supported businesses across the UK, with over £54 million provided to businesses in Scotland, £42 million in Wales and over £12 million in Northern Ireland.

The expansion of the start-up loan scheme follows the 2021/22 spending review, in which the government committed to providing 33,000 loans to the program over the next 3 years.

The extension brings further government support for businesses facing cost pressures and comes on top of measures announced by the Chancellor earlier this week, including the introduction of the Power Bill Relief Scheme to help them with energy costs, reform payroll work rules and simplification. of the alcohol tax system.

It also builds on the key measures the government has announced for small businesses in particular, including expanding the £4.5bn recovery loan program and delivering Help to Grow programmes, which provide free software and advice. to thousands of businesses across the UK.

michelle ovens CBEfounder, Small Business Britain said:

The expansion of financing opportunities for emerging and growing businesses will no doubt be welcomed by small businesses as a positive step in unlocking their potential. Access to finance is vital for entrepreneurs to grow, and with rising costs and challenges across the board, they need all the help they can get right now to realize their ambitions.

British Business Bank’s managing director of business lending, Richard Bearman, said:

We are delighted to be able to expand the reach of the Start Up Loans program to help businesses that need additional support during a time of continued economic instability.

This extension of the program will allow us to work with those companies that were perhaps just getting off the ground when the pandemic hit, or that are ready to grow now that they have recovered. We want to make sure these companies are not left behind.

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