For the self-employed
Sole Trader Loans
Sole trader loans are business loans for self-employed people who trade under their own name rather than through a limited company. Because there's no legal separation between you and the business, lenders assess your personal credit and income, and you're personally responsible for the debt.
Funding Plus compares lenders that work with sole traders, including regulated loans of £25,000 or less with extra consumer protections.
- Loans from £1,000 to £250,000
- Lenders that understand self-employed income
- Regulated protections on smaller loans
Reviewed by the Funding Plus team · Last updated October 2026
Step 1 of 3 · Sole Trader Loans
How much do you need?
Takes about a minute. No impact on your credit score.
Sole Trader Loans at a Glance
- Amounts
- £1k – £250k
- Terms
- 6 months – 5 years
- Decision
- 1 – 7 days
- Security
- Usually none
- Best for
- Self-employed people
Typical figures across the market. Your offers depend on your business, the lender and the security available.
How Sole Trader Loans Work
- 1Tell us about your tradeWhat you do, how long you've been self-employed and what you need.
- 2We find suitable lendersLenders that accept sole traders and self-assessment income.
- 3Compare offersSee monthly payments and total cost, including the APR on regulated loans.
- 4Get your fundsFunds are usually paid within days of acceptance.
How Much Do Sole Trader Loans Cost?
Sole trader loans are priced on your personal credit, income and time trading. Loans of £25,000 or less are regulated, so lenders must show you a representative APR and run affordability checks.
- Interest, usually fixed
- APR shown on regulated loans
- Arrangement fees on some loans
- Possible early repayment charges (limited on regulated loans)
Worked example
Borrowing £15,000 over 3 years
- Loan amount
- £15,000
- Interest rate
- 13% a year
- Monthly repayment
- £505.41
- Total interest
- £3,195
- Total repayable
- £18,195
Illustrative only, not a quote. Regulated loans show a representative APR, which may differ from the interest rate.
Who Can Get Sole Trader Loans?
- Registered as self-employed with HMRC
- Usually 6 to 12 months' trading
- Income shown in bank statements or tax returns
- A personal credit history the lender can accept
- A UK address and bank account
What You'll Need to Apply
- Latest self-assessment tax return (SA302) or tax year overview
- 3 to 6 months of bank statements
- ID and proof of address
Pros and Cons of Sole Trader Loans
Advantages
- Funding without forming a company
- Regulated protections on loans up to £25,000
- Simple applications
- Quick decisions for smaller amounts
Things to watch
- You're personally liable for the full debt
- Personal credit carries most weight
- Smaller amounts than limited companies can get
- Irregular income can limit what lenders offer
Funding Options for Sole Traders
Sole Trader Loans vs Other Options
| Option | Best for | Typical speed | Security |
|---|---|---|---|
| Sole trader loan | Self-employed borrowers | 1 – 7 days | Usually none |
| Vehicle finance | Vans and tools | 2 – 10 days | The vehicle |
| Start-up loan | Newly self-employed | 1 – 4 weeks | None |
| Limited company loan | If you incorporate | Days to weeks | Optional |
Who Uses Sole Trader Loans?
Sole trader loans are used by tradespeople, freelancers and small retailers.
Customer story
“[Real customer story for Sole Trader Loans: what they needed, how quickly it was arranged and what it let them do.]”
[Name], [Role], [Business name] · [Amount] sole trader loan
Sole Trader Loans FAQs
Can sole traders get business loans?
Yes. Many lenders on our panel lend to sole traders, often from 6 to 12 months' trading.
What does 'regulated' mean for my loan?
Loans of £25,000 or less to sole traders are covered by consumer credit rules. You get clear APR information, affordability checks and the right to complain to the Financial Ombudsman Service.
Will it affect my personal credit?
Yes. As a sole trader, business borrowing appears on your personal credit file.
What income do lenders look at?
Usually your net profit from self-assessment returns and the money coming into your bank account.
Should I become a limited company to borrow?
Not just to borrow. Incorporating has tax and legal effects, so speak to an accountant first.
Related Guides
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One quick enquiry, offers from UK lenders that fit, and a real person to talk you through them.