Evaluation of Start Up Loans

Launched in 2012, the British Business Bank’s Start Up Loans programme provides personal loans to individuals for the purpose of starting up a new business or developing an existing early stage business. In addition to the finance, the programme offers pre-application support and post-loan mentoring advice.

In 2023, SQW was commissioned by the British Business Bank to refresh the evidence on the programme. This evaluation was delivered in partnership with Professor Mark Hart, Qa Research and The Data City.

The evaluation focused on loans drawn down by two cohorts, comprising individuals who received their first loan in either the 2018/19 or 2021/22 financial year. The overarching aim for this evaluation was to provide a robust assessment of the Start Up Loans programme, comprising a process, impact and economic evaluation.

We used a mixed methods approach for the evaluation, including: analysis of monitoring data; surveys of, and case studies with, beneficiaries covering the two cohorts; interviews with stakeholders and delivery partners; a counterfactual impact assessment using econometric analysis of secondary firm-level data; and value for money modelling.

The evaluation concluded that the programme has made good progress against its stated objectives and the intended outputs, outcomes and impacts. Across the two cohorts of interest, the evaluation found evidence of the following:

  • At the time of the beneficiary survey, the proportion of self-employed individuals was nearly three times higher than at the time of applying for a loan.
  • Across the two cohorts surveyed, 1.03 net additional employee jobs were created for every loan provided (this excludes the employment of the loan recipients themselves).
  • Businesses established by Start Up Loans beneficiaries had higher survival rates and had experienced stronger growth since incorporation (in terms of assets and employment) than comparator businesses.
  • The majority of loan recipients assessed their personal and business confidence at the time of the survey to be higher than when they first applied for a loan.
  • The value for money estimates were positive, demonstrating a high return on investment for the programme.

The evaluation report is available on the British Business Bank website here.

For further information regarding SQW’s work on the study, please contact Joe Duggett via JDuggett@sqw.co.uk. ​​​​​