Start Up Loans: What Are Your Options in 2025?
Starting a new business in 2025? You’re not alone. The UK continues to see a boom in entrepreneurship — but turning a great idea into a profitable venture often requires funding.
Whether you’re launching a tech startup, opening a café, or starting a service-based business, the question is the same:
What are your funding options as a startup?
In this guide, The Funding Group breaks down the different types of start up loans available in 2025, how to qualify, and which options are right for your stage of business.
🚀 What Is a Start Up Loan?
A start up loan is designed specifically for new businesses, typically those:
Trading for less than 2 years, or
Not yet started trading
Unlike traditional business loans that require a long trading history or strong financials, start up loans are more focused on your idea, your plan, and your potential.
In 2025, funding options for startups are more diverse than ever — ranging from government-backed loans to private lenders, grants, and even angel investment.
🏦 1. Government Start Up Loan Scheme
The UK Government’s Start Up Loan Scheme remains one of the most accessible options for new entrepreneurs in 2025.
Key features:
Borrow £500 to £25,000 per founder
Fixed interest rate: 6% p.a.
1–5 year repayment terms
No fees or early repayment charges
Includes free business support & mentoring
It’s a personal loan for business purposes, so it’s unsecured and based on your personal credit profile — not your business trading history.
Eligibility (2025):
UK resident, aged 18+
Starting or running a business less than 36 months old
A viable business idea and plan
💡 Tip: You can apply for multiple Start Up Loans if you have business partners (up to £100,000 per business from 4 directors).
🏢 2. Unsecured Business Loans (From Private Lenders)
Some alternative lenders now offer unsecured loans to startups with limited or no trading history — especially if you:
Have strong personal credit
Can provide a solid business plan
Have projected cash flow or pre-orders
These loans may have:
Loan sizes from £5,000–£50,000+
Shorter terms (6–24 months)
Slightly higher interest rates than standard loans
They can be a great short-term option if you’re launching and need capital for:
Equipment or stock
Premises set-up
Initial marketing campaigns
✅ The Funding Group works with specialist startup lenders who assess based on potential, not past revenue.
💳 3. Business Credit Cards
While not a loan in the traditional sense, business credit cards are often used by startups to manage early-stage expenses and improve cash flow.
Benefits:
Access up to £25,000+ revolving credit
Only pay interest on what you use
May come with 0% interest offers for 3–12 months
Can help build business credit
Best used for:
Managing recurring costs (subscriptions, supplies)
Short-term purchases
Emergency or backup liquidity
💡 Tip: Choose cards that don’t require company financials — many startup-friendly cards assess the founder’s creditworthiness instead.
💸 4. Personal Loans for Business Use
If your startup is not yet trading or has been declined by business lenders, a personal loan may be a viable fallback.
Pros:
Borrow £1,000–£25,000
No need for a business bank account or trading history
Often fast to apply and get approved
Cons:
You’re personally liable for the debt
Can affect your personal credit score
This route is best if:
You need to fund small-scale testing or MVP development
You plan to replace the loan with business finance once trading begins
💡 Always be clear that the loan is for business use when applying — some lenders treat this differently in underwriting.
🤝 5. Angel Investors
If your business has high growth potential, you may consider raising money from angel investors — individuals who invest their own money in startups in exchange for equity.
What angels look for:
Scalable idea or unique value proposition
Strong founder or team
Early traction, market validation or MVP
Clear exit strategy
Raising investment can give you more than just cash — it may also bring:
Valuable industry expertise
Connections and mentoring
Follow-on funding in future rounds
✅ The Funding Group can connect startups with angel investors via our funding network — ask us for an intro.
📈 6. Venture Capital (VC)
If your startup is a tech, SaaS or disruptive business with a large target market, venture capital may be an option — but it’s competitive.
Venture capital firms typically invest:
£250,000+ in seed or early-stage businesses
In exchange for equity and board input
With expectation of high growth and exit within 5–7 years
For most small startups, this is not the first funding step, but if you’re already gaining traction, VC can help scale aggressively.
🎯 7. Business Grants and Competitions
In 2025, there are a growing number of startup grants and pitch competitions in the UK, especially for:
Tech innovation
Sustainability and green projects
Female founders
Regional development (e.g. Northern Powerhouse or Levelling Up funds)
Grants are non-repayable and highly competitive — but well worth exploring. They often require:
A detailed proposal
Proof of impact or innovation
A business model with measurable outcomes
✅ We can advise you on current grant opportunities and help you apply.
🧠 How to Choose the Right Funding Option
Your ideal funding option depends on:
Stage of your business (idea, launch, growth)
Amount you need
Your credit profile
Willingness to offer equity or personal guarantees
🤝 How The Funding Group Helps Startups Succeed
At The Funding Group, we specialise in helping UK startups find and secure the right funding — from day one.
Here’s how we can help:
✅ Match you with lenders that fund pre-revenue businesses
✅ Prepare a strong application and business plan
✅ Introduce you to angel investors or alternative routes
✅ Compare loans without affecting your credit score
✅ Guide you through Start Up Loan Scheme applications
We know the challenges startups face — and how to navigate the funding maze.
📞 Ready to Launch with the Right Funding?
Starting a business in 2025 doesn’t have to be financially overwhelming.
Whether you’re seeking your first £5,000 or preparing to scale past £100,000, The Funding Group will help you access the smartest funding for your goals.
👉 Start your startup loan journey today with expert support.
