Interest Rate & Eligibility Changes from 1st April 26
Can the interest rate on my Start Up Loan change?
No. The interest rate applicable to a Start Up Loan is fixed for the lifetime of the loan. This means that if the rate of interest for new Start Up Loans changes during the lifetime of your Start Up Loan, you will see no change in the interest rate you are charged. The rate of interest applicable to your loan will be clearly stated in the loan documentation, along with confirmation that the interest rate is fixed for the loan duration.
I already have a Start Up Loan which I took at 6% with the option of drawing more later. Will I be charged the higher rate on the additional borrowing?
Tranched Loans are taken at a single rate of interest. If tranche A was drawn at an interest rate of 6%, then tranche B will also be available at an interest rate of 6%. (Subject to normal tranche B drawdown timeframes and conditions).
Similarly, if tranche A was drawn at an interest rate of 7.5%, then tranche B will also be offered at an interest rate of 7.5%.
Second loans are treated as new applications and the interest rate at the point of application will apply. This means that a primary loan and a second loan can be made at different interest rates.
I am a partner in a small business, why am I being charged an interest rate of 7.5% when another partner of the business was only charged 6%?
The interest rate applied to a Start Up Loan is determined by the date of a successful application (which requires a credit check to be passed). As of 1st April 2026, the fixed interest rate on a Start Up Loan is 7.5%. If your business partner successfully applied for a Start Up Loan before 1st April 2026, they will have received a 6% interest rate charge.
I previously applied for a Start Up Loan but was declined. My circumstances have since changed. If I apply again what would be the interest rate?
An application which has been declined, must wait a period of at least six months before re-applying.
If you apply for a Start Up Loan (and pass the required credit check) before 31st March 2026, you will have 90 days in which to complete the application. If your application is successful, then an interest rate of 6% will apply. If you apply for a Start Up Loan from 1st April 2026 onwards, and your application is successful, then an interest rate of 7.5% will apply.
Please refer to the affordability tools on the SUL website to help determine if a Start Up Loan would be affordable for your circumstances.
I started my application while the interest rate was 6%, if I complete the application which rate of interest will I be charged?
If you apply for a Start Up Loan (and pass the required credit check) before 31st March 2026, you will have 90 days in which to complete the application. If your application is successful, then an interest rate of 6% will apply. If a second credit check is required after 31st March 2026, you will be applying for a loan with an interest rate of 7.5%
Why can I get a personal loan from my bank at a lower interest rate?
Start Up Loans are designed to provide finance and support to small businesses at the early and startup phases. The loan is provided on a personal, unsecured basis, meaning no assets are required as security for the loan.
Start Up Loans also offers free business support through the application process, along with post loan support and resources to further aid your business.
Startups and early-stage businesses often struggle to obtain adequate funding and support from traditional banks and lenders at competitive rates.
We are confident that the current interest rate/pending interest rate and associated terms, provide market leading value, when compared to other lending products in the market.
Why has the interest rate increased?
The interest rate on a Start Up Loan (SUL) was established as 6% at the inception of the scheme in 2012. Since then, the interest rate has remained static despite considerable economic and market change. After review, a new interest rate of 7.5% will be/has been applied as of 1st April 2026. In determining an appropriate interest rate, the British Business Bank compared the Start Up Loan offering with comparable lending products, which typically charge interest rates closer to 20% (as at time of review, mid 2024).
The change in the interest rate to 7.5% addresses some of the disparity with the wider lending market, whilst still maintaining a market leading solution in providing finance and support to small businesses.
Start Up Loans continues to offer enhanced Business Support throughout the application, along with post loan support at no extra cost to the borrower.
What is changing about Start Up Loans eligibility?
From 1st April 2026, the eligibility criteria for a first Start Up Loan will be expanded. Businesses will be able to apply if they have been trading for up to 60 months (five years). This is an increase from the current 36-month limit.
Why is the trading limit being extended to 60 months?
The trading limit is being extended to 60 months to ensure the programme continues to support a broader range of early-stage businesses. This change recognises that some businesses may require finance and guidance later in their development and provides greater flexibility for those seeking support.