What is a Microloan?

A microloan is a small business loan typically under £50,000 designed for startups, early-stage businesses and micro-enterprises that may not qualify for mainstream bank lending. Microloans are offered by specialist lenders, community development finance institutions (CDFIs) and government-backed programmes, and frequently include mentoring and business support alongside the finance. Seven Hills Capital Group will identify the right source of small business funding for your specific situation and stage of trading.

You apply for a small loan — typically between £500 and £50,000

The lender assesses your business plan, cash flow projections and personal credit

Funds are released upon approval

Repayments are made monthly over a fixed term — typically 1 to 5 years

Some microloan programmes include business mentoring and ongoing support

Pros

• Available to businesses that cannot access mainstream bank or SME lending
• Business support and mentoring often included alongside the finance
• Smaller loan amounts mean lower and more manageable repayment commitments
• Government-backed options available at competitive fixed interest rates

Things To Consider

• Maximum loan amounts are limited — typically £50,000 or less
• Application process can be more documentation-heavy than some alternative lenders
• Interest rates can be higher than mainstream bank business loans
• Not suitable for larger business financing requirements

How Seven Hills Capital Group Could Help Your Business

Every business situation is different. The illustrative examples on our case studies page are based on common scenarios we see from UK business owners and landlords - showing how the right finance product, found through a whole-of-market broker, can make a real difference.

What is the maximum amount I can borrow with a microloan?

Microloans in the UK are typically available up to £50,000. The government-backed Start Up Loans scheme offers up to £25,000 per director. Some specialist CDFI lenders offer small business loans up to £50,000 — we will identify the right source for your required amount.

Can I get a microloan with no trading history?

Yes. Microloans are specifically designed for startups and early-stage businesses with limited or no trading history. Government-backed schemes like the Start Up Loans programme are available to businesses in their first five years of trading.

Do microloans require security or assets?

Most microloan programmes are unsecured — no asset collateral is required. Some may require a personal guarantee from the business owner. This makes microloans accessible to businesses that have no assets to offer as security to mainstream lenders.

How quickly can I get a microloan approved?

This varies by lender and scheme. Some specialist alternative lenders can approve small business loans within days. Government-backed programmes typically take 2–4 weeks due to the business plan assessment process. We will identify the fastest appropriate route for your situation.

* Representative APR 9.9% (variable). All finance is subject to status and lender criteria.

What is the difference between a microloan and a startup loan?

The terms are often used interchangeably. In the UK, a startup loan specifically refers to the government-backed Start Up Loans scheme. Microloans are a broader category available from CDFIs, specialist lenders and alternative finance providers — Seven Hills Capital Group will identify which route is most appropriate.