Director information hub: Loans and funding
Think carefully before you borrow money for your company.
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Thinking of borrowing?
Loans
Loans can be used to start or grow company. As a company, you can apply for a start-up loan from the government.
Directors can also take loans from their companies as well as lend money to that company.
Before you borrow money, you should think carefully about what the money is for and if you will be able to pay it back.
Even if your company is forced into liquidation, you may have to repay any director’s loans you took, to pay back creditors.
Check how tax is paid on director’s loans.
Funding
There is a range of government-backed funding and financing options for small and medium-sized enterprises (SMEs).
More about loans
Start-up loans:
- loan from the government of between £500 and £25,000
- the loan is unsecured so involves a credit check
- applicants must be over 18 and an ‘eligible’ business type
- must be a new company or in the first 36 months of trading
- interest is charged
Director’s loans
- money taken from a company by a director (or family member) as a loan
- money a director lends to the company
- you have to keep a record of all loans taken from the company
- you may have to pay tax on the loan if it isn’t repaid within set timescales
Detailed guidance on director loans.
Funding and finance
The Department for Business and Trade has a list of more the 100 funding and financing programmes and schemes.