Starting up
Can I use a Start Up Loan for stock or equipment? The 2026 guide
Yes, you can use a Start Up Loan for stock or equipment. Here is what the money can go on, what it cannot, and when asset finance is the better route for a big purchase.
Yes. You can use a Start Up Loan for stock or equipment. The loan can also pay for a premises and for marketing. The one condition is that you describe the spend in your business plan and cash flow forecast. This guide covers what the money can go on and what it cannot. It also covers when asset finance may be the better route for a big piece of kit.
Section 01
What can a Start Up Loan be used for?
A Start Up Loan can be spent on a wide range of things related to your business. Equipment and stock, a premises, and marketing and promotional costs are all typical examples.
So what is the catch?
There is one rule. You must describe how you intend to use the loan. That description goes in your business plan and cash flow forecast. You also need to explain how that spend will help you start or grow the business. A vague line for equipment will not do. A list of the kit, the cost of each item and the month you plan to buy it will. Our free myplan tool asks for exactly that, in plain questions, and puts each item into the forecast for you.
Here are the headline terms, so you know what you are working with.
One thing shapes every spending decision. A Start Up Loan is an unsecured personal loan, not a business loan. The money is lent to you, and you repay it personally even if the business changes course. So the kit you buy with it is yours to choose, and the repayments are yours to make.
Not sure how much to ask for? Our guide on how much you can borrow with a Start Up Loan covers the per-person and per-business limits.
Section 02
What can it not be used for?
A few activities cannot be funded with the loan. There are three: repaying debt, training qualification and education programmes, and investment opportunities that do not form part of an ongoing sustainable business. Some business types are excluded from the scheme too. Our eligibility check takes about a minute and involves no credit search, so it is a quick way to find out where you stand.
“Once the money lands I can spend it on anything”
Not quite. The loan is approved against the plan you submit. Say your plan lists a van, a coffee machine and three months of stock. That is what your adviser assesses the plan against, and what the money is expected to buy.
Plan the spend first. Then apply for the amount the plan needs.
Does the loan have to cover the whole purchase?
No. Plenty of founders use a Start Up Loan for part of a bigger plan. The loan might cover the stock and the fit-out while savings cover the deposit on a lease. What matters is that the cash flow forecast shows where every pound comes from and where it goes.
Section 03
Should you use asset finance for equipment instead?
Sometimes, yes. Asset finance means borrowing against a specific item, such as a van, a machine or a piece of catering kit. The lender owns the item, or holds it as security, until you have paid for it. You pay in monthly instalments over the working life of the kit.
In our experience, asset finance suits a business that is already trading and needs one expensive item. A Start Up Loan suits a founder who needs a mix of things, or who is not trading yet. Here are four questions that usually settle it.
How big is the purchase?
If one item would swallow most of your £25,000, asset finance can carry that item on its own. That leaves the personal loan free for stock, marketing and the first few months of running costs.
Does the item hold its value?
Vans, machinery and catering equipment can be resold, so lenders are often willing to finance them against the item itself. Stock, marketing and a website cannot be repossessed, so those need a loan that is not tied to an asset.
Are you trading yet?
Asset finance providers usually want to see some trading history and accounts. A Start Up Loan is designed for people who are not trading yet, or who have been trading for less than five years.
Can you use both?
Often, yes. A Start Up Loan for the stock and the launch costs, and asset finance for the one big machine, is a common shape. The two applications are separate, so build one cash flow forecast that shows both sets of repayments.
Already trading and outgrowing the scheme? Our guide on working capital for small manufacturers covers equipment and stock finance for an established business.
Section 04
How do you show the spend in your application?
Three tests decide an application: eligibility, whether you can afford the repayments, and whether the business is viable. Your bizbritain adviser carries out the full assessment against all three. The spend you are planning shows up in the third one.
What does a good spending plan look like?
It is specific. A cafe founder lists the espresso machine, the grinder, the fridge and the first order of beans, each with a price and a month. An online seller lists the first stock order, the packaging, the website costs and the advertising budget. A mobile hairdresser lists the kit bag, the products and the insurance. Each line then appears in the cash flow forecast in the month it is paid.
Our free myplan tool builds the business plan, personal survival budget and 12-month cash flow forecast in one place, by asking plain questions. The workbook itself takes around 30 minutes rather than days or weeks. That way the spending plan and the forecast agree with each other, and your adviser checks them with you before anything is submitted.
Section 05
Where bizbritain fits in
We are a Start Up Loans Business Support Partner. The plan, the numbers and the assessment all happen with us. Your adviser reviews the finished application and carries out the full assessment against the scheme's three tests: eligibility, affordability and viability. Every approval and every decline gets a second internal review. Approved applications go to our Start Up Loans finance partner, which runs its final checks, issues the loan agreement and provides the funds. bizbritain never lends the money.
Most of our applicants who submit a finished application are approved within one to two weeks. The fastest can be approved in as little as a week. Once approved, the loan can be drawn down within 24 hours, so the van or the stock order does not have to wait long. Timing depends on any further work the documents need, prompt replies to information requests and the finance partner's final checks. The part you control is the paperwork, and that is what myplan is for. It is free for every bizbritain applicant.
If you are weighing up a Start Up Loan against asset finance for a big purchase, that is exactly the conversation to have first. The answer is often both.
This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.
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