Sole trader business loans
Business Loans for Sole Traders
Explore finance for cash flow, equipment, stock or growth in your sole trader business. Tell us what you need, and the Wize Finance team will review your enquiry and discuss the funding options that may suit you.
As a sole trader, you and your business are the same in law. That shapes how business borrowing works, whose name it’s in and who is responsible for repaying it.
It’s written for UK sole traders and self-employed people who are already trading. Wize Finance can help you see which types of business finance may suit your business before you approach a lender.
Use your trading name: no Companies House number is needed. Share the amount and purpose, and the team reviews your enquiry and discusses your options.
How business borrowing works for a sole trader
A sole trader and their business are the same legal person. There’s no separate company, so when the business borrows, the borrowing is in your name.
That has a few consequences worth understanding before you apply:
- The finance is in your name. The agreement is between you and the lender, even when the money is used for the business.
- You’re personally responsible for repaying it. Business debts are your debts, so your own finances are part of the picture if the business can’t repay.
- A personal guarantee works differently. Guarantees are how directors of limited companies take on personal responsibility for company borrowing. For a sole trader, the borrowing is already personal.
- Security may be asked for. Depending on the lender, the product and the amount, a lender may ask for security, such as an asset being bought with the finance.
Some lending to sole traders and small partnerships can be regulated consumer credit, which comes with different rules and protections.
What lenders may look at
Each lender sets its own criteria. These are examples of what a lender may consider when a sole trader applies, looked at together rather than one by one.
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Trading history. How long the business has been trading and how steady it has been.
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Income and turnover. Usually shown through your Self Assessment tax returns or accounts.
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Bank statements. How money moves through the account you use for the business.
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Credit history. Your personal credit history and any business credit record.
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Affordability. Whether the business can comfortably cover the repayments alongside your other commitments.
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Existing borrowing. What you already owe, including any personal borrowing.
Keeping business money in its own bank account can make it easier to show how the business is doing. Our guide to Business Loan Eligibility goes into more detail on each check.
What sole traders use business finance for
What the money is for often points to the type of finance that may fit, so it’s worth being clear about it before you enquire.
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Cash flow. Covering gaps between paying for work and being paid for it.
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Equipment and vehicles. Tools, machinery, a van or a car used for the business.
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Stock. Buying stock or materials ahead of busy periods or larger jobs.
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Growth. Taking on more work, moving premises or marketing the business.
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Refinancing. Bringing existing business borrowing together or onto different terms.
Tell us what you need.
Types of finance a sole trader may look at
Whether each of these is available depends on the provider, the product and what your business can show.
A set amount repaid over an agreed term. The hub explains the main types and how they work.
Borrowing without security over specified assets. As a sole trader, you’re still personally responsible for repaying it.
For businesses that take card payments, repaid as a share of future card takings.
For tools, machinery or equipment, where the item itself is part of the lender’s decision.
For a car or van used in the business, from hire purchase to leasing.
If you invoice other businesses, for releasing cash tied up in unpaid invoices.
Government-backed schemes, such as the Growth Guarantee Scheme, change from time to time. Government Business Loans explains the current schemes and who they’re for.
Not trading yet, or not a sole trader?
This page is for sole traders and self-employed people who are already trading.
Not trading yet? Commercial lenders usually look for trading evidence, so the routes before you start can be different. Startup Business Loans walks through them.
A partnership, LLP or limited company? These are different structures, and borrowing works differently for each. Business Loans covers the options for every type of UK business.
How to enquire as a sole trader
The enquiry starts with a short form. As a sole trader, you don’t need a Companies House number: just give your business or trading name.
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How much funding you’re looking for
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Your business type: choose Sole Trader
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Your business or trading name
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Your email address and phone number
After you submit your details, the Wize Finance team reviews your enquiry and contacts you to discuss your funding needs and next steps. Where appropriate, your details can then be shared with a suitable funding provider.
Sole trader business loan questions
Can a sole trader get a business loan?
Yes, it can be possible. Many types of business finance can be available to sole traders, subject to each lender’s and product’s criteria. A lender may look at how your business is trading, your income, your credit history and whether the repayments are affordable.
Is a sole trader business loan a personal loan?
Not exactly, but it is in your name. A sole trader business isn’t a separate legal entity, so business borrowing is taken out by you and you’re responsible for repaying it. It’s still business finance, assessed on how your business trades and used for business purposes. Some lending to sole traders can be regulated consumer credit, which has its own rules.
Can I get a business loan if I’m self-employed?
If you work for yourself as a sole trader, business finance may be available, depending on the lender and the product. Lenders usually want to see how the business is trading and how it would afford the repayments, for example through your tax returns, accounts and bank statements.
What documents might a lender ask for?
Lenders commonly ask for recent business bank statements, your Self Assessment tax returns or accounts, proof of identity and address, and details of any existing borrowing. The exact list depends on the lender and the type of finance.
Will I be personally liable for the debt?
Yes. As a sole trader, you and the business are the same legal person, so business debts are your debts. That’s why a personal guarantee, which is how company directors take on personal responsibility, doesn’t usually apply in the same way. A lender may still ask for security, depending on the product and the amount.
Can a new sole trader get finance?
It can be harder, because there’s less trading history to look at, but it depends on the lender and what the finance is for. Finance linked to something specific, such as a vehicle or equipment, may be worth exploring. If you haven’t started trading yet, see Startup Business Loans.
Sole trader, and ready to explore your options?
You don’t need to know which lender — or even which type of finance — is right before you enquire. Tell us what you’re trying to achieve, and Wize Finance will review your circumstances, discuss the options with you and, where appropriate, connect you with a suitable funding provider.