Yes. A Start Up Loan is a personal loan in your name, so you still have to repay it, plus interest, even if your business stops trading.
Why
The loan is made to you personally, not to your business, and it isn't secured against anything. That means there's no business asset to hand back instead, and closing the business doesn't cancel what you owe. See Is a Start Up Loan a personal loan? Do I need security or a guarantor?.
If your business is struggling
- Contact our finance partner early, before you miss a payment. Their details are in your loan agreement. See What if I can't make a repayment?.
- Get free, independent debt advice from National Debtline, Business Debtline, Citizens Advice, StepChange or MoneyHelper.
- Talk to your mentor about the business itself. Mentors can't give debt advice, but they can help you think through your options.
What happens if payments stop
Missed payments affect your personal credit record. If they continue, the debt can be passed to a collection agency, or legal action can be taken, which may lead to a County Court Judgment. See What if I can't make a repayment?.
Before you borrow
Borrow an amount your personal budget could repay even if the business took longer to work than planned. A back-up plan helps here. See What is a back-up plan and why do I need one?
Last reviewed: 8 October 2026