Start Ups Loan FAQs

Start Up Loans FAQs

What is a Start Up Loan?

A Start Up Loan is a loan to help you start your business.  The loan is a personal loan given for business purposes. Your loan application will be considered according to the needs of your business.

How much can I borrow?

Loans start from £500 and go up to £25,000. Please note that we lend on the basis of need – so your business plan and cash flow forecast should demonstrate to you how much you need to borrow.

What is the interest rate?

It is currently set at a fixed rate of interest – 6% nominal.

What is the repayment period for a Start Up Loan?

You are required to pay back the loan within 1-5 years.  The exact term will be agreed with by CWRT as part of your application process.

Who is eligible for a Start Up Loan?

Anybody living in the West Midlands at least 18 years of age, at the time of application can apply for a Start Up Loan. You may have already started your business, but you must not have been trading for longer than a period of 24 months. You must have the legal right to remain in England, Northern Ireland or Wales for the duration of your loan term and the right to be self-employed.

I am an international student living in England aged between can I apply?

If you have a Tier 4 Visa, then you are NOT eligible to apply for a Start Up Loan, as self-employment is excluded. If you are able to secure a Tier 1 Graduate Entrepreneur Visa, then you may be eligible to apply.

Can I apply for a Start Up Loan if I have been declared bankrupt?

Applicants for a Start Up Loan must not have been or currently be declared bankrupt and/or have any outstanding IVA’s.

What is the difference between a loan from the New Enterprise Allowance (NEA) and a Start Up Loan?

The NEA scheme is separate to the Start Up Loans Programme, and the associated loans have different terms. The NEA referred loan is part of a package of support aimed at helping people on benefits in England, Wales and Scotland to start their own business. You can only apply for an NEA referred loan if you have been on the NEA scheme and had your business plan approved.  The loan terms for those entering the scheme on or after 1st October 2013 have changed: the loan is now capped at £2,500, has a 6% nominal interest rate and is paid back over three years.

Can I receive a Start Up Loan if I have an NEA referred loan?

The NEA scheme and the Start Up Loans programme are mutually exclusive packages of support offered by government to help people set themselves up in their own business. The individual elements of those packages are not interchangeable.

Individuals cannot have an NEA referred loan and a Start Up Loan concurrently. If you take an NEA referred loan, you may later be able to apply for a Start Up Loan when your business is ready for more funding. In this instance you must: demonstrate the business case  for further funding; go through the full Start Up Loans programme; not currently be in arrears; not have been trading for more than 12 months; and use the Start Up Loan to immediately pay off your NEA referred loan.

Is this a grant?

No. A grant is a non-repayable fund provided by an individual or an organisation for a particular purpose. Grants are often awarded to non-profit entities, as well as businesses or individuals. The process for applying for a grant for a specific business will almost always include some level of compliance and reporting, which will then be assessed for eligibility by the grant maker. You can apply for a grant from the government, the European Union, local councils and charities. Generally will not need to pay a grant back, but there is a lot of competition and they are almost always awarded for a specific purpose or project.

The difference between a grant and a Start Up Loan is a Start Up Loan must be repaid.

What is a grant?

A grant is a non-repayable fund provided by an organisation, for a particular purpose. Grants are often awarded to non-profit entities, as well as businesses or individuals. The process for applying for a grant for a specific business will almost always include some level of compliance and reporting, which will then be assessed for eligibility by the grant maker. You can apply for a grant from the government, the European Union, local councils and charities. You won’t need to pay a grant back, but there’s a lot of competition and they are almost always awarded for a specific purpose or project.

What is the difference between a grant and a Start Up Loan?

A grant is a fund that does not require repayment, whereas a Start Up Loan must be paid back with 6% annual interest.

Can I only have one Start Up Loan?

Yes, individuals can only receive one loan from CWRT.  This allows us to support the maximum number of people to start their own business.  If you are starting a business with others who are eligible to apply for a Start Up Loan, you can all submit applications for the same business.

What is the application process?

The process is simple – apply online and we will assess whether you are eligible for the Start Up Loans Programme. If you are, then we will see what level of business support you need in order to help you put together your business plan, forecasts and other supporting documents. Your mentor will then help you with your requirements – once this has been completed – you are then referred to our Start Up Loans Officers who will arrange to have a loan meeting with you to go through your application and then hopefully from there, we will be able to provide you with a Start Up Loan.

Please note that CWRT does have other funding, so if you are not eligible for a Start Up Loan, then we may still be able to help.

Do I need a business bank account to receive this loan?

No. A Start Up Loan is a personal loan, so a personal bank account is fine.

What happens once I have the loan?

Once you have a loan, you will be offered on-going business support from CWRT, as well as access to useful products and services provided by The Start Up Loans Company’s Corporate Partners.

What is a mentor?

A mentor is an individual with business experience who will provide support and guidance to help make your business a success.

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