Start up business loans for new and early-stage businesses

Yes, but the options are narrower until the company has trading history. A new limited company usually starts with a government-backed Start Up Loan, asset finance secured on equipment, or a loan secured on property, with directors giving personal guarantees. Smart Funding Solutions, a whole-of-market commercial finance broker, searches lenders that accept newly incorporated companies and those that will once a few months' bank statements exist.

Realistic options for a newly formed company

• Start Up Loans: the government-backed scheme lends up to £25,000 at a fixed 7.5% a year over 1 to 5 years, with free mentoring for the first 12 months (Business.gov.uk: applying for a Start Up Loan). It is a personal loan for business use. See our review of Business Enterprise Fund, a Start Up Loans delivery partner.
• Asset finance: vehicles and equipment can be funded from day one because the asset secures the agreement. See asset finance and limited company car finance.
• Secured lending: a director's property can support a secured business loan or homeowner business loan.
• Invoice finance: once you invoice business customers on credit terms. See invoice finance.
• Unsecured loans and credit cards: usually after several months of bank statements. See business loans without accounts and business credit cards.

What lenders want from a new company

• A business plan and cash flow forecast.
• Directors' personal credit history, experience and own investment.
• A business bank account in the company's name. See limited company business loans.
• Usually a personal guarantee, which GOV.UK explains in its director information hub.

If you are still choosing a structure, read sole trader or limited company. The British Business Bank's Finance Finder lists wider options. To see which lenders accept a company of your age, use Instant Quotes (no credit check).

A good starting point is the government-backed Start Up Loans scheme, delivered by partners such as the not-for-profit Business Enterprise Fund, alongside asset finance and secured lending that can work from day one. Smart Funding Solutions, a whole-of-market commercial finance broker, compares start-up finance for new limited companies and sole traders across a panel of over 300 lenders.

Options for a new business

• Start Up Loans. A government-backed personal loan for business use, with mentoring. GOV.UK explains how to apply for a Start Up Loan.
• Asset finance. Vehicles and equipment can be funded early because the asset secures the agreement. See asset finance.
• Secured lending. Property can support a secured business loan.
• Flexible lending once you are trading. A revolving credit facility, merchant cash advance or invoice finance can follow once you have a few months of bank statements. See business loans without accounts.

Tailored advice for start-ups and limited companies

A broker that works with new businesses can tell you which lenders accept your trading age and structure before you apply. We work with start-ups, limited companies and sole traders, and fees depend on the lender, with nothing to pay upfront. Have a business plan, cash flow forecast and ID ready. Instant Quotes shows which lenders on our panel may suit a business of your age, with no credit check.

You borrow a lump sum and repay it with interest over an agreed term. Most start-up finance is either unsecured and backed by a personal guarantee from the founders, or secured against an asset such as property or the equipment being bought. Because the lender is taking more risk than with an established business, amounts are usually smaller and pricing higher. Options widen noticeably once the business has several months of bank statements to show.

1. Define the purpose: what exactly is the money for?
2. Match the term to the purpose: don't fund a five-year investment with a six-month loan, or a short gap with long-term debt.
3. Check affordability: forecast cash flow month by month, including repayments and a buffer for a slow start.
4. Compare total cost, including fees and any early repayment charges.
5. Understand security and guarantees before you sign.
6. Consider combining products, such as asset finance for equipment plus a smaller loan for launch costs.

Opening in hospitality? Our beginner's guide on how to get a loan to start a restaurant shows how a Start Up Loan, equipment finance and your own contribution fit together for a new restaurant.

Start-up finance is most likely to be approved for founders with a credible business plan, a realistic cash flow forecast, clean personal credit, relevant experience and some of their own money in the business. Lenders look at:

• Business plan: what you sell, who buys it, your costs and how the loan will be repaid.
• Cash flow forecast: realistic monthly projections for at least the first year.
• Personal credit history: for a new business, the founders' credit files carry significant weight.
• Experience: relevant industry or management experience gives lenders confidence.
• Your own investment: money you have put in yourself shows commitment.
• Security and guarantees: property, assets or personal guarantees reduce the lender's risk.

Your legal structure also affects which lenders you can approach and who is liable; our guide to sole trader vs limited company explains the trade-offs.

If your personal credit file has missed payments, defaults or a CCJ, read our page on business loans with bad credit to see how lenders weigh adverse history.

A start up business loan typically takes from one to six weeks, and the quality of your business plan and forecast usually decides which end of that range you land at. With no accounts to review, underwriters spend longer testing the founders' assumptions, so expect questions on pricing, costs and how you will live while sales build. Asset finance for equipment or vehicles is often the quickest route, as the lender mainly needs the supplier quote, a deposit and the founders' details. A government-backed Start Up Loan includes business plan support and checks, which take time. A secured loan against property needs a valuation and legal work and is usually the slowest. Having a complete plan, a lender-ready forecast, ID and bank statements ready before you apply saves the most time.