More new businesses are going to be able to take advantage of an £884 million loan scheme after the Business Secretary expanded its eligibility.
Start-ups that have been trading for up to three years will now be able to apply for loans of up to £25,000 and second loans will be available to businesses up to five years old.
Business Secretary Jacob Rees-Mogg said:
“This government is relentlessly focused on driving growth to create better jobs, boost wages and fund our vital public services like the NHS.
“Encouraging entrepreneurship and new businesses to thrive is critical to growing the economy and raising living standards.”
The Start Up Loans programme has provided more than 95,000 loans to start-ups across the UK since its inception in June 2012, offering an average of just over £9,000 in support.
With 33,000 new loans available, eligibility has widened to include businesses trading for up to three years (formerly two years). Businesses can apply immediately under the new criteria.
Start Up Loans provide a fixed interest rate of six per cent, as well as mentoring, support and funding to aspiring business owners across the UK, providing support to those who might find it difficult to secure loans from traditional lenders.
Alongside this, a new second loan will be available to businesses operating for up to five years, providing eligible businesses between three and five years old much-needed government-backed finance to support their expansion at a crucial juncture.
“From a hair salon in Wales, to a furniture business in Northern Ireland and a cake seller in the Lake District, expanding the Start Up Loans Scheme will support these small businesses through this challenging period and position them to grow – creating jobs and opportunities across the UK.”
The scheme has backed businesses across the United Kingdom, with more than £54 million provided to businesses in Scotland, £42 million in Wales and over £12 million in Northern Ireland.
The extension provides further government support for businesses grappling with cost pressures and adds to measures announced by the Chancellor in his mini-Budget, including the introduction of the Energy Bills Relief Scheme to help support them with the costs of energy, reforming off payroll working rules and simplification of the alcohol duty system.
It also builds on key measures the Government has announced for small businesses in particular, including extending the £4.5 billion Recovery Loan Scheme and delivering the Help to Grow schemes, which provide mentoring and free software to thousands of businesses across the UK.
Michelle Ovens CBE, founder, Small Business Britain said: “The expansion of funding opportunities for start-ups and growing businesses will certainly be welcomed by small firms as a positive move to unleash 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 realise their ambitions.”
Will you be applying for a Start Up Loan? Get in touch if you’d like to discuss it with us.