About this programme
The Development Bank of Wales is a Welsh Government-owned economic development bank that lends its own capital to Welsh businesses. Its micro loan product covers small amounts of debt finance, from £1,000 up to £100,000, aimed at businesses starting up or trading in Wales that need working capital, equipment, premises or stock finance and may not fit the security or track-record requirements of a mainstream bank loan.
Micro loans sit alongside the Bank's wider lending, which runs from £1,000 up to £10 million, and alongside dedicated strands for young entrepreneurs (18-30) and social enterprises (£1,000-£50,000, ring-fenced funding). Loans can require a personal guarantee, which may itself be secured against a personal asset or left unsecured — an unsecured guarantee carries more risk for the Bank and is priced accordingly.
There are two routes into a micro loan: a 'fast track' loan for businesses with at least two years of trading history, which asks for a lighter set of documents, and the regular micro loan route for newer or less-established businesses, which asks for a fuller financial picture. Both are fixed-rate, repaid in monthly instalments of capital and interest over one to ten years, with no arrangement fee and no early-repayment charge.
How it works
Loan size runs from £1,000 to £100,000. There is no arrangement fee on micro loans up to £100,000.
Interest rates are fixed for the life of the loan. Across the Bank's overall loan book, annual rates run from 6.25% to 13%, with a current average of 8.56%; the rate offered on an individual application is graded A-F based on the applicant's creditworthiness (via a credit reference agency check), the security available, and recent financial performance. The official page does not publish a rate band specific to micro loans, so treat the overall range as indicative, not a quote.
Repayment is over one to ten years in monthly instalments combining capital and interest. There are no early-repayment fees.
Businesses located in an Enterprise Zone may qualify for up to a 2% interest-rate reduction.
Loans can require a personal guarantee. An unsecured personal guarantee (not backed by a personal asset) versus a secured one (backed by a legal charge over an asset) is one of the factors that affects the interest rate charged — a secured guarantee lowers the Bank's risk and, in turn, the cost of borrowing.
Funds can be used for equipment purchase, premises rental or upgrade, staff hiring, marketing, stock purchase, working capital/cash flow support, and product or service development.
Who can apply
The business must be based in Wales, or willing to relocate to Wales.
Fast-track micro loans require at least two years of trading history. Businesses without that history apply through the regular micro loan route, which asks for more supporting detail (see Documents).
The Bank asks that the business have 'real commercial promise' — the application is assessed on the strength of the business plan and financials, not on a fixed minimum turnover or headcount.
A personal cash contribution toward the launch cost is usually expected for early-stage/startup lending.
How to apply
- Use the online eligibility checker on the Development Bank of Wales site to confirm the business qualifies before applying.
- Complete the online application. A member of the Bank's team will make contact to discuss the business and the loan requested.
- The Bank reviews the application, including the business plan and supporting financials, and makes a lending decision.
- If approved, funds can be arranged for transfer — the Bank states funds can be released within one working day of receiving all completed documents.
Documents you’ll typically need
- Fast-track loans (2+ years trading): a statement of assets and liabilities.
- Regular micro loans: business plan summary; up to two years of historic accounts (if available); a cashflow forecast (two years for loans over £25,000, one year for loans up to £25,000); current management information; the previous three months of bank statements; and a statement of assets and liabilities.
Frequently asked
How much can a Development Bank of Wales micro loan cover?
Micro loans run from £1,000 up to £100,000. Larger finance above £100,000 is available separately but is assessed with a fuller forecast rather than the micro loan documents.
Is there a fee to arrange the loan?
No. The Bank does not charge an arrangement fee on micro loans up to £100,000, and there is no fee for repaying the loan early.
What interest rate will I be charged?
Rates are fixed for the loan term and set individually by credit grade (A-F), based on creditworthiness, security offered and recent financial performance. Across the Bank's overall loan book, rates currently run from 6.25% to 13% with an average of 8.56%; the official micro loan page does not publish a rate band specific to micro loans, so ask for a quote against your own application.
Do I need to put up security or a personal guarantee?
It depends on the application. Loans can require a personal guarantee, which may be unsecured (not backed by a personal asset) or secured (backed by a legal charge over an asset) — a secured guarantee is lower-risk for the Bank and can lower the cost of borrowing.
What's the difference between a fast-track loan and a regular micro loan?
Fast-track loans are for businesses with two or more years of trading history and ask for a shorter document set (a statement of assets and liabilities). Businesses without that trading history apply through the regular micro loan route, which asks for a business plan, accounts, cashflow forecast, recent management information and bank statements.
What can the loan be used for?
Typical uses include buying equipment, premises rental or upgrade costs, hiring staff, marketing, stock purchase, working capital and cash flow support, and product or service development.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.