What types of loans are available for growing businesses?

Now that banks are offering simple lending processes, securing funding has become a smooth process. Banks can not only match your loan requirements to your business plans, but they will allow you to select the monthly repayment terms, choose a repayment option, and borrow between £1,000 and £25,000. You’ll find all the options on any bank’s website, with details of all their financial options including a business overdraft and business credit cards, too.

Alternatively, there are government-funded schemes available to SMEs which come with a multitude of benefits, like the Start-Up Loans service. Not only does it offer funding in the form of loans, but it also offers mentoring for entrepreneurs. The scheme assigns a partner to each company who will help develop and initiate a structured business plan. You’ll receive a low-cost, unsecured loan, backed by a range of business support products if your plan is approved.

You can use our interactive map to find funding in your local area.

There are some key types of loan available through government funding:

1. Soft loan

This particular type of loan includes a generous repayment plan; interest rate are usually lower, and the repayment terms can be extended for a longer period. Organisations across the country offer soft loans of up to £25,000 for six per cent interest to businesses, social enterprises, and charities. The government’s Start-Up Loans is the perfect place to explore the range of opportunities available. Through this scheme, loans must be repaid within five years, and at a fixed rate of interest. Capital repayment holidays are also available, with monthly interest options.

2. The Prince’s Trust

The Prince’s Trust offer Start Up funding to help cover start up costs before you launch your business. And if it’s less than 3 years since you became a Prince’s Trust–supported business, you can also apply for Start Up funding to continue your business growth.

Apply for up to £30,000 in a combination of:

  • Start Up Grant of up to £5,000
  • Start Up Loan of between £500 and £25,000

3. Innovate Loans

Innovate loans are a financial product offered by Innovate UK. They are for UK businesses that want to scale up and grow through innovation, developing new or improved products, processes or services. The loans are for late-stage research and development projects only. A late-stage R&D project is one which builds on a new idea but has not yet reached the point of commercialisation.

You can use a loan to finance a late-stage research and development project categorised as experimental development.

Experimental development includes:

  • producing plans, arrangements and designs for your products, processes or services
  • developing commercially-usable prototypes and pilots
  • experimental production and testing of products, processes and services

To be apply for an innovation loan you will need to successfully apply into one of the Innovate UK loan competitions. You could borrow between £100,00 and £1 million to cover up to 100% of your eligible project.

4. East of England Regional Growth Loan Schemes

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The East of England Regional Growth Loan Schemes, supported by the Department for Business, Energy and Industrial Strategy, are available to established businesses based within the East of England. The schemes help support eligible businesses that can show strong growth potential and have a medium to long-term funding requirement to deliver that growth.