Start Up Loans Evaluation

What we were asked to do

The Start Up Loans programme was launched in 2012 to help individuals wanting to set up businesses. It provides pre-loan support, a loan of up to £25,000 at a low 6% fixed interest rate per annum and up to 12 months of mentoring. Available for new and recently-established businesses across the UK, the programme surpassed £500m of lending in summer 2019 with over 60,000 loans issued. In 2014 the British Business Bank commissioned SQW to undertake a longitudinal evaluation to assess the performance of the programme and its value for money.

What we did

The evaluation set up a tracking study to compare the outcomes of Start Up Loans beneficiaries with a comparison group of individuals looking to start or having recently started businesses. The tracking study involved surveys, which were used to collect data on aspects such as business milestones and characteristics, business performance, and personal development. Over the course of the study, which was finished in 2019, two cohorts of beneficiaries of the programme were tracked (loan recipients in 2014 and in 2016). Econometric analysis was used to assess the outcomes of the programme. We also developed a value for money model as part of the study, which enabled the British Business Bank to understand the economic return of its investment in the programme.

Qualitative research was undertaken with delivery partners, mentors and beneficiaries. In the final phase of the evaluation, and in response to a changing policy emphasis on place, case studies were undertaken on how programme delivery was being align with local contexts.


The final report concluded that value for money was positive and had improved over time. The economic benefits were assessed to be up to six times the economic costs. Value for money was higher for the later 2016 cohort than the 2014 cohort. This reflected a number of factors including the higher size of loans, the characteristics of the beneficiaries and their businesses, and operational improvements. Complementing the encouraging value for money, the study's econometric analysis found that the programme had had a positive effect on the start-up rate of individuals and the propensity for businesses to increase their sales.

The take-up of mentoring has varied. It was clear from the evidence that not all individuals wanted mentoring, and there were differing motivations and circumstances when mentoring was seen as useful. That said, a key recommendation was to ensure that a consistent offer of mentoring was made to beneficiaries.



With three reports across the evaluation period, the study has helped the British Business Bank as the programme has evolved. Three key points are noteworthy:

  • The evaluation provided early evidence that informed a 2015 Spending Review submission, assisting the Bank in receiving government commitments to continue the programme for a further term as part of the 2015 Autumn Statement. The business case was then strengthened when further evidence from the evaluation was available. This informed a government decision for a one-year rollover in autumn 2018, giving the Bank and delivery partners certainty over the programme's future.
  • The evaluation played a role in helping the Bank to focus on key issues that have informed programme improvement, and so the increase in value for money found by the evaluation itself in the Year 3 report. These issues included default rates, the varying spread and performance of delivery partners, and ensuring consistency in the programme offer.
  • Finally, the Year 3 report highlighted choices on delivery and targeting, with evidence on how the characteristics of beneficiaries had shifted towards higher value loans. The evidence has given the Bank confidence in the larger loans, but also helped to recognise that there is scope for breadth and balance in targeting to ensure loans are available to a wide range of people through different types of delivery partner.

As well as dissemination of findings to the British Business Bank's Board and delivery partners, SQW delivered a joint presentation with the Bank at the UK Evaluation Society Conference in June 2019. This helped to disseminate findings, and also how the evaluation had adapted to changing needs over the study period.