UK Startup Funding in 2026: Start Up Loans, Innovate UK Competitions and Grants You Can Check Today
Start Up Loans offer £500 to £25,000 at a fixed 7.5% for businesses trading less than 60 months. Innovate UK Smart Grants remain paused, so founders need to look for specific live competitions instead.
By Entrepreneur Group · Published · Updated
Editor's note: updated on 27 October 2026 with the current Start Up Loans terms and live Innovate UK competitions.
The two most useful public funding routes for most new UK businesses are a Start Up Loan and a targeted Innovate UK competition. A Start Up Loan lets you borrow £500 to £25,000 at a fixed 7.5% a year, repaid over one to five years, if your business is less than 60 months old, according to the British Business Bank. Innovate UK's general Smart Grants remain paused, so innovation funding now comes through specific competitions with fixed deadlines.
There is no single national "startup grant". Most support is a loan, a competition for a defined type of project, or local help.
Start Up Loans
A Start Up Loan is a government-backed personal loan for business purposes, not a loan to the company.
- Amount: £500 to £25,000 per person. Partners can each apply, up to £100,000 per business.
- Rate: fixed at 7.5% a year for applications from 6 April 2026, up from 6%. Start Up Loans says existing loans keep their original rate.
- Trading limit: from 6 April 2026 businesses trading for up to 60 months can apply, up from 36 months.
- Who can apply: people aged 18 or over, living in the UK with the right to work here, with a UK-based business.
- Support: successful applicants get 12 months of free mentoring.
You will need a business plan and cash flow forecast, and there is a personal credit check. Because it is a personal loan, you are personally responsible for repaying it even if the business fails.
Innovate UK competitions
Innovate UK Smart Grants, the old open programme for any innovative idea, are paused while Innovate UK develops more tailored support, according to its funding guidance. Do not assume a general round is open.
Instead, Innovate UK runs competitions for particular sectors and challenges. Examples listed by Innovate UK Business Connect in autumn 2026 include:
- BridgeAI Deployment Catalyst for AI in assurance and compliance: up to £5 million in total, closing 8 December 2026;
- Knowledge Transfer Partnerships (2026 to 2027, round 4): up to £12.5 million, closing 27 January 2027;
- Growth Cohorts: low carbon concrete: up to £11.5 million, closing 2 December 2026.
These are total funding pots, not individual awards. Check the competition brief for project size, match funding and eligibility.
Hiring support
The Youth Jobs Grant pays employers in Great Britain £3,000 for each 18 to 24-year-old hired who has been on Universal Credit and out of work for six months. The grant listing shows it open until 31 October 2028.
A sensible application process
This section is editorial guidance, not financial advice.
- Start with your need. Decide what the money is for and how much you need before choosing a scheme.
- Check it is live. Use the official page for the scheme, and note the closing date and eligibility rules.
- Read the scope. Competitions are scored against their brief. A strong business that does not match the scope will not win.
- Show your evidence. Back up costs, milestones and expected results with quotes, data and customer feedback.
- Check local support. Growth hubs, councils and devolved governments run their own schemes.
Frequently asked questions
What is the Start Up Loan interest rate in 2026?
New Start Up Loans have a fixed interest rate of 7.5% a year for applications from 6 April 2026. Loans approved earlier keep their original 6% rate.
Are Innovate UK Smart Grants open in 2026?
No. Innovate UK Smart Grants are paused while new support is developed. Innovate UK funds innovation through specific competitions, listed on the Innovation Funding Service.
Can an existing business get a Start Up Loan?
Yes, if it has been trading for less than 60 months and meets the other criteria. The limit rose from 36 months on 6 April 2026.
Sources
- Start Up Loans: Interest rate and eligibility changes from 6 April 2026 (reviewed 27 October 2026)
- British Business Bank: Start Up Loans guidance (reviewed 27 October 2026)
- Innovate UK: Smart Grants funding guidance (reviewed 27 October 2026)
- Innovate UK Business Connect: New funding and support packages for innovative SMEs (reviewed 27 October 2026)
- Find a grant (GOV.UK): Youth Jobs Grant (reviewed 27 October 2026)