Self-employed people can borrow for a business, but the best route depends on whether you are a sole trader, partnership or limited company. Lenders check personal and business income, tax records, trading history and affordability. This 2026 guide compares five practical options and separates genuine sole-trader routes from products that now accept limited companies only.
- Start Up Loans are the clearest early-stage route - sole traders can apply for £500 to £25,000 at a fixed 7.5% rate when eligible
- Liberis is revenue-based finance, not a normal loan - repayments flex with card or digital sales and the offer uses one fixed fee
- Capify accepts sole traders - unsecured funding starts at £5,000, but daily or weekly repayments and a personal guarantee can apply
- High-street banks suit established borrowers - HSBC and Barclays may consider self-employed applicants, but account history and affordability drive the decision
- Funding Circle no longer accepts new sole traders - from 23 February 2026 it focuses on limited companies and LLPs, despite older self-employed pages
Can Self-Employed People Get Business Loans?
Yes, but a sole trader is personally liable for business debts. A lender may assess your personal credit history, self-assessment records, bank statements and business cash flow together. A limited company is a separate legal entity, although many lenders still ask directors for a personal guarantee.
Prepare your latest tax calculations, tax-year overviews, bank statements, management accounts and a clear repayment plan. Lenders want to see what the money will fund and how the business will repay it. Do not assume that a product marketed as a business loan accepts every self-employed structure.
Best Self-Employed Business Loans in the UK
These five routes cover early-stage borrowing, revenue-based finance, specialist lending and high-street applications. They are not interchangeable. Check the legal entity, trading history, repayment method and total cost before applying.
| Option | Best for | Current position | Main watch-out |
|---|---|---|---|
| Start Up Loans | Newer sole traders and small businesses | £500 to £25,000; fixed 7.5%; up to five years trading | Personal loan for business purposes; credit and business plan checks |
| Liberis | Businesses with card or digital-payment sales | Revenue-based funding from about £1,000; working-capital products up to £500,000 | Repayment is a share of future sales; not a traditional APR loan |
| Capify | Established sole traders needing fast funding | Unsecured funding from £5,000; one year trading and about £10,000 monthly turnover | Daily or weekly repayments, fees and a personal guarantee |
| HSBC | Existing bank customers with established records | Small Business Loan and Kinetic options, subject to bank assessment | Credit, affordability and account relationship can affect the offer |
| Barclays | Businesses that already bank with Barclays | Business lending is assessed against the profile and purpose | No single public self-employed rate or amount applies to every applicant |
Start Up Loans EDITOR’S PICK
Start Up Loans are government-backed personal loans for business purposes. The official self-employed loans guide says eligible applicants can borrow £500 to £25,000 at a fixed 7.5% rate, with a term of one to five years and business support.
From April 2026, the first-loan trading window extends to businesses trading for up to 60 months. Sole traders and partnerships can apply as individuals, subject to the credit check, affordability assessment and business plan. This is usually the first route to investigate if you are too new for a conventional bank loan.
Liberis Revenue-Based Finance
Liberis buys an agreed share of future business revenue in exchange for a cash advance. Our July 2026 check records working-capital funding from about £1,000 to £500,000, minimum trading of four months and a need to process card or digital payments through an approved provider.
There is one fixed fee rather than periodic interest. Repayments are taken as an agreed percentage of daily card or payment revenue, so the amount paid each day can fall when sales fall. That flexibility can help seasonal businesses, but the total cost may be higher than a bank loan and you may need to keep the same payment processor.
Read the current Liberis funding explanation carefully. It describes revenue-based finance as a purchase of future receivables, not a regulated consumer loan. Ask for the fixed fee, expected repayment period, minimum repayment rules and any personal guarantee before accepting.
Capify
Capify considers limited companies, partnerships and sole traders. Our July 2026 check records unsecured funding from £5,000 to £1 million, at least one year trading and about £10,000 monthly turnover. Sole-trader borrowing has its own minimum and may require a personal guarantee from the owner.
Capify repayments are normally daily or weekly rather than monthly. Our July 2026 check records processing fees, an origination fee and a monthly service fee, but the exact total depends on the offer. The primary Capify site has reduced its published maximum from older third-party figures, so ignore guides that still quote £3 million as the standard ceiling.
Use Capify when speed and broader credit criteria matter more than the lowest possible cost. Compare the total repayable amount, repayment frequency, personal guarantee and early-settlement terms with a Start Up Loan or bank quote.
HSBC and Barclays Bank Lending
High-street banks can be competitive for established self-employed borrowers with clean records, predictable profits and an existing account relationship. HSBC lists small-business and flexible-loan products for working capital, stock and asset purchases. Barclays offers business borrowing based on the business profile and purpose.
Bank applications usually require more formal evidence than revenue-based finance. Prepare tax-year overviews, tax calculations, bank statements, accounts, forecasts and details of existing commitments. A bank may offer a lower rate, but the application can take longer and the amount may be limited by affordability.
Do not assume the representative rate applies to you. Ask for the annual percentage rate, arrangement fees, early-repayment terms, security and whether a personal guarantee is required. Existing customers should still compare at least one alternative.
Funding Circle Is No Longer a Sole-Trader Option
Older versions of this guide listed Funding Circle as a self-employed lender. Its current support notice says that from 23 February 2026 it no longer accepts new applications from sole traders and partnerships and now focuses on limited companies and LLPs. Its older self-employed landing page remains visible, so check the eligibility notice before relying on search results.
Funding Circle may still be relevant if you have incorporated and have at least 12 months trading. It is not a current answer for a sole trader who needs a new loan. This distinction prevents an avoidable application and hard credit search.
What Documents Do Self-Employed Borrowers Need?
Most applications need proof of identity, proof of address, recent bank statements and evidence of declared income. Sole traders should have tax-year overviews and self-assessment calculations available. A lender may also request management accounts, contracts, invoices, forecasts and details of personal debts.
Keep business and personal transactions separate where possible. A dedicated business account makes turnover easier to evidence. Explain unusual income drops, large one-off expenses or a recent change from sole trader to limited company before the lender asks.
Eligibility and Affordability
Trading history is only one part of the decision. Lenders also assess profit, cash flow, credit history, outstanding borrowing, industry risk and the purpose of the loan. A new sole trader may be better suited to Start Up Loans, while an established card-based business may fit Liberis.
Borrow only an amount that your realistic cash flow can repay. Daily or weekly products can create pressure even when the headline advance looks affordable. Build a repayment forecast using a slower sales month, tax payments and personal drawings before accepting an offer.
How to Improve Your Application
File tax returns on time, reconcile your bank statements and explain any recent income change. Reduce unused overdrafts and settle missed payments where possible. Write a short funding plan that links the amount borrowed to stock, equipment, marketing, payroll or a specific contract.
Use soft-search eligibility checks where available. Ask whether the lender will run a hard credit search, whether a personal guarantee is required and whether the product is a loan, an advance or a purchase of future revenue.
Compare the Total Cost
Compare the total repayable amount, not just the interest rate. Include arrangement or origination fees, service fees, VAT, early-settlement costs, personal-guarantee exposure and the effect of daily or weekly repayments on cash flow. A fixed-rate loan can be easier to budget, while revenue-based finance can flex with sales.
Ask for the repayment schedule in pounds, not only a percentage or factor rate. Check how a missed payment affects your credit file and whether the lender can change the collection percentage. Keep a copy of the offer and the assumptions used to calculate affordability.
Use our business loans hub and business loan costs guide to compare structures. If you are within five years of starting, read the Start Up Loan guide before applying elsewhere.
Self-employed lending is personal as well as business finance. Check the legal entity, evidence required, repayment method and total cost before applying. If you are unsure whether a product is a loan or revenue-based advance, ask the provider to explain the contract in plain English.
