Starting up
Can a sole trader get a business loan in 2026?
Many self-employed people assume business finance is only for limited companies. It is not. Here is what a lender actually looks at.
If you work for yourself, you may have been told that business finance is for limited companies. It is not. Being a sole trader does not shut you out of a business loan. What matters is your plan, your numbers and whether you can repay, not the legal wrapper around the business.
Section 01
Your business structure is not the test
A Start Up Loan is a government-backed personal loan for individuals starting or growing a business in the UK. You borrow it, not your business.
So there is no company for anyone to look at, and none is needed. That is why sole traders can apply. Partnerships can too. All owners or partners in a business can apply individually.
“I am not a limited company, so I cannot get a business loan”
Sole traders, partners and company directors are all people. A Start Up Loan is lent to a person, for a business purpose.
Your structure changes what your paperwork looks like. It does not decide whether you are allowed to apply.
The structure is not the barrier. The plan and the forecast are what get tested.
Section 02
What the loan is, in four numbers
A Start Up Loan is £500 to £25,000 for each founder. The term is one to five years. A business with more than one founder can raise up to £100,000 in total.
Each person applies separately, and each is responsible for their own loan.
That last point matters for sole traders. The loan is personal, so you are personally liable for repaying it. There is no company standing between you and the debt, because there is no company.
Section 03
What gets looked at instead
If the structure is not the test, what is? Four things, and you can prepare all of them.
What the business does and who pays for it
Your adviser wants to see the work, the customers and what the money is for. A sole trader with a book of regular clients is describing a real business.
A cash flow forecast that repays the loan
This is the document that does the most work. It shows, month by month, how the repayment gets made.
Your personal credit history
The formal application includes a personal credit check. It is a hard search, recorded on your credit file, and it may affect your score. You also have to afford the repayments. A thin file is not the same as a bad one.
Whether you can raise the money elsewhere
One of the eligibility criteria is that you are unable to secure finance from other sources. It is a real test, so be ready to say what you have already tried.
Notice what is missing from that list. Nobody asks for filed accounts. The loan is unsecured, so you do not put forward any assets or guarantors to support an application.
Section 04
How to show cash flow when there is no company
This is where sole traders get stuck. There are no company accounts and no company bank statements. That is normal, and it is not a problem.
Use what you do have:
- Bank statements that show money coming in from the work you already do.
- Copies of invoices you have raised, with a note of which ones were paid late.
- A month by month forecast for the next year.
- A short note on what the loan buys, and what changes once you have it.
Put your own drawings in that forecast. A sole trader takes money out of the business to live on. A forecast that leaves that out will not survive a first read.
You do not have to build the forecast from a blank page. Our free myplan tool asks plain questions about the business. It then builds the business plan, the personal survival budget and the 12-month cash flow forecast from your answers. The workbook itself takes around 30 minutes rather than days or weeks.
If your income moves around from month to month, show the range rather than an average. Seasonal work is common and assessors see it every day. What they cannot work with is a forecast that shows a flat line no real trade ever produces.
Section 05
Where a broker fits
bizbritain is a Start Up Loans Business Support Partner. We help you get the business plan and the cash flow forecast right. Your adviser then reviews the finished application and carries out the full assessment: eligibility, affordability and viability. Approved applications go to our Start Up Loans finance partner, which runs its final checks, issues the loan agreement and provides the funds.
Most applicants are approved within one to two weeks of submitting a finished application, if you reply promptly to your adviser. Once approved, the loan can be drawn down within 24 hours. Timing depends on any further work the documents need, prompt replies to information requests and the finance partner's final checks. The part you control is the paperwork, and that is what myplan is for.
If a Start Up Loan is not the right fit, there are other routes. A broker can look at the deal across a wider range of lenders. That helps when you have been trading for more than five years, or when you need more than a Start Up Loan offers. That is where growth finance fits.
If you want to know where you stand before you start, you can check your eligibility first. It takes about a minute and involves no credit search.
Start. Grow. Buy.
This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.
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