Sole trader or limited company? The UK business count has shifted towards companies. According to government figures published on 5 November, there were 137,000 fewer sole traders at the start of 2026 than a year earlier. Over the same year, the number of companies rose by 58,000.
The headline from the same release was a fall of 104,000 in the total number of UK businesses. That headline needs care.
01What the 2026 business count shows
The Business Population Estimates count every private sector business in the UK, registered or not. At the start of 2026 there were about 5.6 million, down 1.8% on 2025.
The fall was all in businesses with no staff. Their number dropped by 157,000. Almost all of that drop was in small unregistered businesses, the kind that are not registered for VAT or PAYE.
Businesses with employees went the other way. Their number rose by 54,000, or 3.8%.
02Why the fall may not be real
Unregistered businesses are estimated from a survey, so the total carries a margin of error. The government puts it at plus or minus 109,000.
That is bigger than the fall itself. In the release's own words, "we cannot confidently state there has been a fall in the real business population."
The shift from sole traders to companies is the clearer story. Sole traders still make up 55% of all UK businesses, about 3.1 million. Companies make up 39%.
03Sole trader or limited company: what changes when you borrow
If you are starting out, your business structure changes who borrows the money.
A Start Up Loan is an unsecured personal loan. It is made to you, the founder, not to your business. That stays true whether you trade as a sole trader or through a limited company.
So a limited company cannot take out a Start Up Loan in its own name. Its founders can, and each founder can apply for up to £25,000. Our guide to getting a Start Up Loan for a limited company explains how the money then gets into the company.
If you trade as a sole trader, the loan and the business are both in your name. Our guide on whether a sole trader can get a business loan covers the other options too.
04Where to start
Choose your structure for how you want to trade, not for the loan. An accountant can tell you which suits your tax and your plans.
Then check whether you can apply for the Start Up Loans scheme. The scheme is open to UK businesses that are not yet trading or have traded for up to five years.
The application needs a business plan, a personal survival budget and a cash flow forecast. myplan, our free workbook, builds all three in around 30 minutes.
