What’s the difference between sole trader loans and limited company loans?

A business loan for a sole trader is issued to the individual, making them personally liable for repayments. Limited company loans, on the other hand, are issued to the company itself, which is treated as a separate legal entity.

Why do sole traders take out business loans?

Sole traders and self-employed professionals often use loans for working capital, managing cash flow, purchasing equipment, or covering startup expenses.

Steps to apply for a business loan as a sole trader

Check your credit report, clear existing debts, compare offers through a broker like Prospera Funding, gather documents such as bank statements or tax returns, and apply.

What are the requirements for a sole trader business loan?

Lenders typically require UK residency, proof of income or 6+ months of trading history, and may request tax returns or collateral. Some accept applicants with limited credit history.

How to boost your chances of getting approved

Maintain good credit, pay bills on time, minimise debts, prepare necessary documents, and apply through brokers who understand sole trader finance.

Are business loans harder to get if you’re a sole trader?

Not necessarily. While lenders may assess sole traders more closely, many still offer flexible options—especially with support from brokers like Prospera Funding.

Which costs should sole traders compare when picking a lender?

Beyond interest rates, review APR, total repayable, admin fees, early repayment penalties, and hidden charges like legal or exit fees.

Business Loans For UK Sole Traders

While managing taxes might be more straightforward as a sole trader, securing seed funding, business loans, or government grants can sometimes be more challenging when you’re self-employed. Irregular income and full personal liability often make it harder for sole traders to access the finance they need. That’s where sole trader business loans come in, providing tailored funding solutions to support your growth and ease cash flow pressures.

What is a sole trader loan, and how can it be used?

A sole trader loan is a type of business finance designed specifically for individuals who operate as sole traders in the UK. Unlike limited companies, sole traders are personally liable for their business finances, which means lenders assess both the business and personal credit profiles during the application process. Sole trader loans can be secured (backed by an asset like a vehicle or property) or unsecured (based on creditworthiness without collateral).

Apply for a business loan

Man applying for a sole trader loan at Prospera Funding.

Why choose Prospera Funding for a sole trader loan?

Full access to UK lenders

Access tailored business finance from £5,000 to £25M, with rates from 4.5%. Prospera Funding connects UK SMEs with both traditional and alternative lenders for flexible, fast business finance solutions.

Protecting your credit

We prioritise protecting your credit score by leveraging our lender network and industry expertise to assess your funding options without formal applications or credit checks.

Fast decisions

Our lenders offer faster funding than traditional bank loans, ideal for businesses needing quick access to working capital, cash flow, or growth. Decisions and funds in as little as 24 hours.

Transparent costs

You know your business best, and whether business finance makes sense to achieve your goals. At Prospera Funding, we simply present the best funding options, fully explain the costs, and let you decide. No risk, no commitment, and no broker fees.

Industry specialists

Our business finance specialists have expert knowledge and proven experience across multiple industries, ensuring tailored funding solutions aligned with your business goals.

Flexible options

Our lenders provide flexible loan terms, repayment options, and requirements, helping businesses find funding that aligns with their goals

Aftercare support

With expert finance specialists and a vast lender network, we deliver tailored business funding solutions and ongoing support, ensuring your company always has access to the most cost-effective finance options on the market.

Industry compliant

We work with FCA-regulated lenders and ensure full compliance with all industry rules and regulations.

Sole Trader Loan Calculator, Estimate Monthly Repayments

Rate from 4.5%, loans between £5,000 to £25,000,000.

360 overview of the whole UK lending market, all types of legal businesses considered.

Fast decisions, funding from as quickly as 24 hours.

No cost, risk or commitment...and no credit searches.

How to apply for a business loan as a sole trader or self-employed professional

We make business funding fast, simple, and tailored to you. Our advanced platform intelligently matches your business with the most relevant finance solutions from a wide panel of UK lenders. Whether you’re expanding, managing cash flow, or investing in growth, we’re here to help you access the funding you need, without the hassle.

Start your journey here

Women thinking about the process of applying for a sale trader loan at Prospera Funding.

Get funded in 3 easy steps

1. Tell us about your business loan requirements

Let us know how much you’re looking to borrow, what it’s for, and a few key details about your business. No lengthy forms, just straightforward questions.