Posted: March 2, 2020 By Kieran Darmody

Five Finance Options For Self-Employed And Sole Traders

Being self-employed or a sole trader boasts many benefits including more freedom, higher earning potential and getting to start something of your own from scratch.

Return to blog posts

Being self-employed or a sole trader boasts many benefits including more freedom, higher earning potential and getting to start something of your own from scratch. However, financially it can be tough, especially in the beginning. Luckily, there are now a lot more financing options and support networks out there to assist you in getting your business off the ground.

When it comes to getting financing, we’ve put together a list of options to help you get started:

Personal loan

Personal loans can be taken out for a multitude of reasons and one of them is helping to fund a business. As you’ll be taking out the loan as an individual, you’ll need to have a good credit score. You’ll also need to remember that it will be your name against the loan not your business name so there will be some personal liability involved. However, the plus side to this is that if you have any problems repaying the loan your business won’t automatically be affected. You can get a personal loan from a high street bank or look online for the best rates and deals.

Guarantor loan 

Guarantor loans are great for individuals who are still building up their credit score or who have just started out. It basically works in the same way as any other loan where you borrow money from a lender and then pay it back in monthly installments. However, you’ll need either a relative, friend or someone you trust to be your guarantor so that if you fall behind with your repayments they can cover it for you. You can typically borrow up to £10,000 and it can be a great way to build up your credit score when starting out.


When it comes to applying for a grant, it’s usually easier if you’ve only just started your business or are in the early stages. Even better if it’s for a specific purpose or getting your business launched off the ground. The great thing about grants is that you won’t need to pay it back although some government grants could require you to match the amount of funds they give to you. As well as this you’ll need to meet the eligibility criteria and have a strong business plan. And of course, as other people will be applying for the same grants, there’s no guarantee that you’ll get it. To find out more about applying for grants you can check out the site here or The Prince’s Trust for those under 30.


This fundraising strategy allows sole traders and anyone who is self-employed to raise money for a project or business scheme and works by generating finance from donors on the internet. In exchange for donations, the donors can get equity in your business or receive free products and services. The advantage of this is that you don’t need to pay anything back as the funds are given to you as donations, however, you will need to pay a percentage of your donations to the third party site that you’re set up on. Another advantage of crowdfunding is that if you put together an effective campaign, your cause could reach a lot of people and bring you lots more visibility. To find out more you can check out sites such as Kickstarter and Indiegogo.

Business Cash Advance

For those that are a little more established, a Business Cash Advance is a great option for those who have been trading for over four months. Designed to give you a quick injection of funds, you’ll need to be taking £2,500 in card takings each month. You can then borrow between £2,500 to £30,000 at one fixed cost with no APR or penalty fees. Once approved, you’ll pay back a pre-agreed percentage of your card takings which means that you only make repayments when your customers pay you. To see if you’re eligible you can visit the Liberis website for more information.

Trusted by
Backed by