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Funding Your Business

What The Start Up Loans Company can do for you

Got the seed of a brilliant new business idea? The Start Up Loans Company could be just what you need. Louise Ramsay reports What The Start Up Loans Company can do for you

The Start Up Loans Company was set up in 2012 to support new and recently launched UK businesses to secure financial and mentoring support.

A subsidiary of the British Business Bank, it delivers the government’s Start Up Loans programme, with an aim to lend to entrepreneurs who find it difficult to access business loans elsewhere.

A resounding success, SULCo has distributed loans to around 58,000 UK businesses. Better still, prior to being awarded loans, 46 per cent of entrepreneurs in the 18 to 24 age group were neither in work or training, meaning SULCo has turned thousands of young people’s lives around.

SULCo has achieved this not just by providing finance to start and grow, but also through its programme of support, which is delivered through a nationwide network of delivery partners. This helps to boost the initiative’s effectiveness by providing easily accessible mentoring that’s tuned in to local need.

What’s on offer

SULCo off ers a government backed personal loan to anyone who wants to start or develop a business in the UK.

As well as financial help, recipients are provided with 12 months of complimentary support and exclusive business offers. Loans are unsecured, so applicants don’t need to provide assets or guarantors to secure finance.

Individuals within a business or partnership can borrow from £500 to £25,000 each, up to a maximum of £100,000 per business. Interest is fixed at six per cent per annum and is paid back over a one to five-year period. There are no fees to apply or set the loan up.

If you’ve already received a loan from SULCo, you can apply for a second loan to expand your business, subject to certain criteria. SULCo also offers a Sharia compliant investment product.

Who is eligible

To qualify for a loan you need to be aged 18 or over and a UK resident with the right to work in the UK.

Your business must be new or set up within the last 24 months and it needs to be based in the UK. You need to be unable to secure funding from anywhere else - though you don’t need to prove this, as self-declaration is fine. You also need to be able to pass a credit check and satisfy SULCo that you will be able to pay the loan back.

Some business types and loan purposes are excluded under the scheme. For instance, you can’t apply for a loan to cover training fees or to set up a gambling or pornography enterprise.

How to apply

If your palms have started to sweat at this bit, relax. All you have to do to start is register with SULCo with information about yourself and your business. It will then team you up with a specialist business partner - or you can choose one - who will help you prepare your loan application.

Next, you’ll submit business documents, such as your business plan and cash flow forecast. Your SULCo business adviser will help you with this, but there is also a huge range of advice on the SULCo website, along with free templates to help you create your documents.

Making a successful loan application

Beyond being creditworthy and able to demonstrate that you can afford to pay the loan back, the most important criteria for success is your business idea.

You’ll need to be able to show there is a demand for your product or service and that you stand a good chance of achieving all the goals set out in your business plan.

Mentoring programme

Support is key to the SULCo package. Not only are all applicants offered guidance from a business expert during the application process, they are provided with a 12-month, one to one mentoring programme.

Mentoring is provided by industry and enterprise experts and offers an independent perspective for making decisions and a shoulder to lean on if you’re feeling uncertain about what to do. It’s also a useful way to discuss ideas or challenges, as well as find guidance on broader areas of business, such as marketing, management and financial matters. In addition, a mentor can help you access new networks and connections.

Research show that business owners who participate in mentoring show increased confidence, optimism and rates of business survival - helping to put you in the best possible position to build your business.

Helping hand

Everyone loves a cheese toasty - and no one knows that more than Mechelle Clark, founder of Melt Aberdeen, the city’s first grilled cheese sandwich shop.

Mechelle was awarded a £20,000 loan from SULCo in 2016 to set up her business after being made redundant twice from the oil and gas industry. Melt Aberdeen now has a turnover of almost £130,000.

Mechelle says: “I’ve always had a passion for cooking and saw there was a gap in the market in Aberdeen for upmarket toasties. There have been challenges along the way, such as the effect on the local economy when the oil and gas industry collapsed, but the financial backing I received from the SULCo has helped my business grow from strength to strength.

“The mentoring scheme they offer has also been incredibly helpful.”

When Lauren Taylor had her baby, she struggled to find an effective, natural cream to treat her little one’s dry skin. After a lot of trial and error, she discovered raw virgin coconut oil - and was so impressed she became passionate about its many skincare benefits and uses.

Helped with a £10,000 loan from SULCo, she and her husband Mark set about creating a range of premium organic coconut oil toiletries for children made from ingredients sourced from an ethically family-run farm in Thailand.

Lauren now sells her products in more than 800 Boots stores, has featured in Vogue magazine and scooped a raft of awards - and her annual turnover keeps on growing.

“Having a baby with dry skin is a problem for a lot of mums who are as keen as me to ditch the chemicals found in traditional baby skincare lotions,” she says. “As soon as we started dealing with Boots, it meant growing quickly, which created a range of challenges.

“The more product we sold, the bigger our cash flow issues became. Thankfully, the SULCo loan helped us to fulfil our orders.” Read more like this

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