Loans for UK startups

Need funding but don’t want dilution? Use this page to find the safest type of startup loan or facility for your situation.

UK startups use loans and facilities for three common reasons: to extend runway between rounds, to fund growth once revenue is predictable, or to finance assets and cashflow without giving away shares. “Loans” covers several products, from public startup loans and regional programmes to venture debt, revenue-based finance, working capital solutions, asset finance, and revolving credit facilities. Use the decision table below to jump straight to the right category.

Most founders land here when they want runway without raising again.

Simple trade-off: investors buy upside, lenders expect repayment. If repayments would be stressful or uncertain, equity may be safer.

Find the right option

Which loan type fits your situation?

Use this table to jump straight to the right category.

Your situation	Best option
I am pre-revenue (or just starting), UK-based	Startup loans
I have predictable revenue (often SaaS) and want to grow without dilution	Revenue-based financing
I have raised a seed round and want to extend runway before the next raise	Venture debt
I am waiting to get paid on invoices or contracts	Working capital
I need to buy equipment, hardware, or infrastructure	Asset finance
I am scaling and want a repeatable funding line	Credit facilities

Loan categories

Each category page explains eligibility, common terms, and typical UK providers.

Startup loans

Public programmes, regional loans, early-stage support

Early-stagePublic fundingUK regions

Best for: Pre-revenue or early revenue, UK-based founders looking for practical capital

Typical use: First repayable funding, bridging small gaps, regional expansion

Explore Startup loans

Venture debt

Debt raised alongside or after a equity funding round

Post-roundRunwaySometimes warrants

Best for: Seed to Series B companies extending runway without dilution

Typical use: Runway extension between rounds, funding growth without selling more shares

Explore Venture debt

Revenue-based financing

Repayments flex with revenue (often SaaS-friendly)

SaaSMRR/ARRFlexible repayments

Best for: Businesses with predictable revenue, especially SaaS and subscription models

Typical use: Growth spend, hiring, marketing, bridging to profitability

Explore Revenue-based financing

Working capital

Invoice finance, contract-backed finance, cashflow smoothing

InvoicesContractsCashflow

Best for: B2B businesses with invoices, contracts, or long payment terms

Typical use: Smooth cashflow gaps, fund delivery, reduce late-payment stress

Explore Working capital

Asset finance

Finance secured against equipment or infrastructure

HardwareComputeEquipment

Best for: Hardware, deeptech, compute, equipment-heavy operations

Typical use: Equipment purchases, infrastructure deployment, capex-heavy scaling

Explore Asset finance

Credit facilities

Revolving facilities and larger structured debt for businesses

ScalingFacilitiesFlexible drawdown

Best for: Scaling companies needing a repeatable funding line

Typical use: Flexible drawdowns, growth facilities, broader financing structures

Explore Credit facilities

Real examples from Startupmag

These are real funding stories showing how founders use loans and facilities in practice.

Nscale financed GPU infrastructure using a debt facility

Example: asset finance (infrastructure-backed) or venture debt depending on structure.

Read the story|See Asset finance

Freeklime used an NPIF loan to fund expansion without dilution

Example: public / regional loan programmes for early-stage UK businesses.

Read the story|See Startup loans

HR Guru used Mercia debt finance to extend runway after raising

Example: venture debt used to bridge time between rounds.

Read the story|See Venture debt

Laka secured an HSBC Innovation Banking facility to support scale

Example: revolving credit facility for scaling businesses.

Read the story|See Credit facilities

When loans are a bad idea

You cannot predict repayments. If your next 6 to 12 months are uncertain, debt can amplify stress.
Your revenue is not reliable. Many products here assume predictable cashflow, contracts, or assets.
You are raising your first capital. Equity is often safer early on unless you qualify for a public programme.

FAQs

Is a loan the same thing as venture debt?

Venture debt is a type of loan designed for venture-backed companies, typically raised alongside or after an equity round. It often has different terms and expectations than a standard business loan.

Can pre-revenue startups get loans in the UK?

Sometimes. Pre-revenue startups are more likely to qualify through public or regional programmes rather than commercial lenders. Eligibility depends on the programme, the region, and the business profile.

When should a startup avoid loans?

Avoid loans if you cannot predict repayments, your runway is highly uncertain, or your revenue is not reliable. Debt can be useful, but only when repayment risk is genuinely manageable.

Do loans always require personal guarantees?

Not always. Some startup-focused facilities are secured against revenue, assets, or contracts, while others may require guarantees. It varies by provider and product type.

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