Specialist
Business Loan For Sole Trader
Flexible Finance Solutions for Sole Traders
Flexible Finance Solutions for Sole Traders
Yes, you can get a business loan as a sole trader. It can sometimes be more difficult to find a lender willing to offer a loan to a sole trader than it would be for a limited company, this is due to lenders viewing a sole trading business as more high risk than a limited company business.
Our experts at Clifton Private Finance can help you find the best loans available for sole traders and will make sure to get you the best deal for your personal situation, contact us to find out more information and to get started in finding your business loan.
As a sole trader you may find it more difficult to acquire funding through the traditional routes, it is usually much easier for limited companies to acquire said funding as they are registered with the Companies House, but as a sole trader you may not be registered.
You can still get a business loan as a sole trader, and you will usually get the best terms on your loan if you are able to offer some form of valuable asset as security for your loan, such as a property or other valuable items, either personal assets or business assets.
You could still qualify for an unsecured business loan as a sole trader, which means you do not need to provide any assets as security for your loan, but you will usually not get the most desirable terms without any security.
● If you are applying for an unsecured sole trader loan, you can keep your assets safe and you won’t be risking your business assets.
● Unsecured sole trader loans also mean you can access your funds quite quickly.
● Secured sole trader loans may have a longer process, but you can get more favourable terms with a secured loan.
● Sole trader loans are specifically targeted at the needs of sole traders, unlike other traditional methods of acquiring funding.
● The cash flow injection from a sole trader loan can help you get your business back on track, or expand your business in new ways.
● There are a variety of loans available, including the option to use either a secured or unsecured loan.
What Are The Disadvantages of Sole Trader Business Loans?
● As a sole trader, lenders will often see investing in your business as a higher risk than a limited company. This means you may not be offered the most favourable terms.
● You will often be asked to secure your loan through a personal guarantee or secure the loan against business or personal assets, this means if you miss your repayment you could be risking your assets.
● The amount you are able to borrow will be limited as a sole trader. This is also due to sole trader businesses being viewed as higher risk than a limited company, so you may not be able to get all of the funding you need.
What Are The Types of Small Business and Sole Trader Loans?
There are a few different types of loans you may be looking at when searching for a small business loan as a sole trader.
These types of loans include:
● Secured loans. Using your personal or business assets to provide a guarantee for your loan repayment.
● Unsecured loans. No requirement of securing your loan against assets, but you may not be able to borrow as much or get as desirable terms as you would with a secured loan.
● Retained profits. If you are a sole trader with a positive net income, you can reinvest your profits back into your business.
● Hire purchase. If you are a sole trader looking to acquire equipment or assets for your business, you can use hire purchase to pay a percentage of the assets value then pay a rental fee until you have paid the full amount for ownership of the asset or equipment.
● Crowdfunding. Depending on the type of business you have, you may be able to use crowdfunding as a source of income for further investment or expansion.
Am I Eligible for a Sole Trader Loan If I Have Bad Credit?
Although you may not get the best terms offered, you could still qualify for a sole trader loan if you have bad credit. Fewer lenders will be willing to offer you a loan but there will still be some options available, you may need to provide a personal guarantee or use a guarantor for your loan depending on how bad your credit is.
We highly recommend taking steps to improve your credit before applying for a loan whenever possible. If you’d like to get more advice on improving your credit and you want to learn more about your loan options as a sole trader, get in touch with our specialists at Clifton Private Finance for all the help and information you need
Our business loan service provides:
Business loans for:
As a specialist property finance broker, Clifton Private Finance can provide a clear picture of the options available to you. We will assess your specific set of circumstances and arrange a finance solution tailored to your needs.
A business loan may be used for the purchase of a property you intend to rent out, light refurbishment; renovation of an unmortgageable property, building an extension and converting a property.
There have been recent changes, implemented by the Prudential Regulation Authority, that have greatly affected how lenders process applications for business loans for rental property, especially the buy to let market.
To secure a business loan from a traditional lender for a buy to let rental property you will need to provide evidence of your business, show that you can afford mortgage repayments in the event that the interest rate increases to 5.5%; have a rental coverage ratio of up to 145% for standard by to lets and up to 170% for houses in multiple occupation and ensure all your rental properties are profitable.
Traditional lenders’ criteria have become stricter and as a result applications generally take longer than before, it is not uncommon for applications to take up to several months.
The increased difficulty of securing a business loan for a rental property and the lengthy application process may make applying to a traditional lender an unattractive prospect.
Applying to a private lender for a business loan could be a good alternative for your rental property. Typically, private lenders are more flexible and they often do not take as long as traditional lenders to process an application.
Private lenders’ business loan deals are usually not available on the high street, and the majority of them are not featured on comparison websites. Therefore, it is advisable to contact a specialist broker to access a loan from a private lender.
As a specialist broker, we can identify the loans available to you and identify the financial solution that is best suited to your set of circumstances.
I approached Clifton Private Finance to help me get a mortgage as an Expat working in the Far East. I would normally 'cut out the middle man' on something like this and try to get myself a deal directly with the banks, but I am now sold on the broker concept and wouldn't hesitate to use Clifton Private Finance again. There were a number of complicating factors such as being an expat, the stamp duty holiday, the sheer amount I wanted to borrow and the fact I wanted it all wrapped up before the Stamp Duty holiday ended. It is clear to me now that the relationship that brokers have managed to foster with their banks means they can simply pull levers and make stuff happen that us ordinary folk cannot. Put simply, they are worth every penny, will take most of the stress out of the lending process, and seem to have access to deals that you just won't find on the internet. Thank you George and Jan for all your hard work!
James M
Luther was excellent. Very clear in his advice and explanations of products and was able to move things on very quickly when we ran into difficulties with the estate agents. Without a doubt I would recommend Luther to all friends, family and colleagues. Luther was a joy to deal with and took a lot of the stress out of a troublesome transaction, from my end. I would view Luther as real asset to Clifton Private Finance Ltd.
William W
The team at Clifton Private Finance has been outstanding, not only in helping me to obtain a mortgage on a slightly unusual home, but also in continuing to provide support and liaise with the lender and solicitors through to completion. Thank you for making the process of buying my first home much easier.
Chantelle S
Sam O'Neill, and the new lender he identified for me, worked tirelessly together using my time constraints, to make sure my mortgage application was completed on time. They are a brilliant company to work with, fast, efficient, open and transparent from the very beginning, and turned a seemingly impossible situation into a viable one. Sam was brilliant throughout the whole process and I would highly recommend him, and his colleague Helen, to anyone without hesitation, I cannot speak highly enough about them.
Myr B
I was incredibly lucky to find Clifton Private Finance after a search on line as their service has been more than exemplary. My point of contact was Sam 0’Neill and he was happy to help at every stage during the application of the bridging loan, making a stressful process much easier to deal with. He was always available by phone or email and gave prompt answers to queries I had as well as always getting back to me when he said he would. That to me is excellent customer service and I cannot thank him personally or the company enough for the support they have given me.
C Jefferey
Adam cannot thank you enough for all your support throughout this arrangement. You have gone more than the extra mile to support us. Without you we would not have got our dream retirement home. You have been most professional and personable. Liz and I would be more than happy if you wanted to use us a reference with respect to any future clients.
Nigel & Liz K - Bristol
You have certainly shown me that you do everything for your clients, including tolerating their excessive emails and questions for updates. I have been kept in the loop, from yourself, about why the delays were occurring (Nationwide, post etc) which I would like to highlight that I really appreciated. I certainly will be able to recommend you to others as and when the need arises.
Mr Morris
I recently contacted Clifton Private Finance after a Google search for bridging finance providers and was immediately struck by their efficiency and support. Forms were emailed over almost immediately and the necessary finance was arranged within a few days. None of the other companies I contacted came close to their professionalism, and the quote that I eventually received was impressive. Thank you Adam, your help has enabled us to reserve the house that we wanted and I certainly recommend you to others.
Mr M. R. - Oxford
Absolutely brilliant. The service was first class, got everything sorted efficiently and were always friendly. Any fees were negligible compared to the service offered. Robert was particularly outstanding.
Charles N
My advisor, Robert, was very helpful in finding the mortgage to suit me. He kept me up to date throughout the process and dealt with any issues when they arose.
Rowena C
