Top Unsecured Business Loans for Sole Traders 2026: Compare the Best UK Lenders
.png)
Top 10 Unsecured Business Loans for Sole Traders Compared
| Rank | Lender | Best for | Published loan range | Loan rate |
|---|---|---|---|---|
| 1 | CubeFunder | Low-turnover sole traders needing fast unsecured funding | £5,000 to £100,000 | interest 2.5% to 4% monthly |
| 2 | Iwoca | Newly self-employed sole traders seeking flexible unsecured finance | £0 to £1,000,000 | interest 1.6% to 5.6% monthly |
| 3 | SWIG Finance | Start-up sole traders needing low-cost unsecured term loans | £500 to £250,000 | interest 6% to 6.18% annually |
| 4 | Capify (includes Rapital) | Established sole traders with strong turnover needing larger loans | £10,000 to £1,000,000 | factor 1.1% to 1.35% monthly |
| 5 | Swishfund | Sole traders with 12+ months trading seeking unsecured term finance | £10,000 to £450,000 | interest 1.1% to 3% monthly |
| 6 | Bizcap | Sole traders needing rapid unsecured funding with minimal paperwork | £5,000 to £750,000 | factor 1.1% to 1.4% monthly |
| 7 | Funding Circle | Sole traders wanting longer-term unsecured loans with annual rates | £10,000 to £750,000 | interest 18% to 24% annually |
| 8 | Tide Bank | Sole traders preferring bank-issued unsecured lending with digital ease | £500 to £20,000,000 | interest 5% to 11.5% annually |
| 9 | Befund | Sole traders based in the North of England seeking unsecured funding | £500 to £250,000 | interest 8.5% to 15.5% annually |
| 10 | Barclays | Sole traders wanting high-street bank unsecured loans up to £25m | £1,000 to £25,000,000 | interest 8.5% to 14.9% annually |
An unsecured business loan provides funding without requiring you to pledge property, equipment, or personal assets as collateral. For sole traders, this is particularly valuable because your personal and business finances are legally intertwined; putting up security can mean risking your home or savings. Lenders approve these loans based on your trading history, turnover, and personal creditworthiness instead. A £25,000 unsecured loan can fund stock purchases, equipment upgrades, or working capital without exposing your personal assets to repossession risk.
Comparing unsecured business loans goes well beyond the headline interest rate. Sole traders should look at whether the lender uses monthly factor rates or annual percentage rates, as this dramatically changes the total cost of borrowing. Funding speed matters too; some lenders release funds within hours, others take days. Trading history requirements vary from no minimum up to 12 months, while turnover thresholds range from zero to £50,000 or more. Personal credit score expectations also differ between high-street banks and alternative lenders.
Important note:
Funding Agent
Published loan rangeFrom £10,000 to up to £1,000,000
Rate typeInterest from 6.8% annually
Why it is included:It is included because many business owners need to compare several finance routes before choosing where to apply.
Funding Agent can help businesses compare suitable options across a lender panel, especially when eligibility depends on turnover, sector, trading history, credit strength and available documents.
Best use case: When the borrower wants to avoid applying to one lender at a time.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Why it stands out
- Useful when a business wants to compare lender fit rather than guess which lender to apply to first.
- Can help position the application around the funding purpose, trading profile and available documents.
- Works well as a conversion route for readers who are unsure whether a direct lender will approve a larger unsecured facility.
Need to know
- Funding Agent is a broker, not a lender.
- The lender, not Funding Agent, sets the final rate, term, fees and approval decision.
- The best match may be unsecured, secured, revolving credit, invoice finance or another product depending on the case.
Expert take
Funding Agent is a useful honourable mention for business owners who want to compare lender options before submitting a full application. A larger unsecured loan is not always approved by the first lender a business finds, so understanding lender fit early can reduce wasted time and avoid unnecessary declines.
CubeFunder
Published loan range£5,000 to £100,000
Rate typeinterest 2.5% to 4% monthly
Overview: CubeFunder writes term loans from £5,000 to £100,000, giving sole traders access to fixed-sum funding with structured monthly repayments. Approvals can land within 24 hours for straightforward applications. The trade-off is that security such as property or assets is usually needed, and lenders will expect evidence of consistent trading history.
Best next step: Term loans from £5,000 to £100,000 with fast decisions.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Fixed monthly repayments for predictable budgeting
- Decisions within 24 hours on clean applications
- Broad range covers modest to larger needs
Need to know
- Security such as property typically required
- Strong trading history needed to qualify
- Personal guarantee may be requested
Expert take
A term lender that funds established businesses with tangible security behind them. Sole traders who can pledge assets and show steady trading get a faster process than traditional bank lending, with fixed repayments that make budgeting straightforward.
Source:https://www.cubefunder.com/
Iwoca
Published loan range£0 to £1,000,000
Rate typeinterest 1.6% to 5.6% monthly
Overview: Iwoca turns applications around within 24 hours, making it a practical choice for sole traders who cannot afford a drawn-out approval process. Loan amounts stretch up to £1,000,000, with flexible terms that adapt to seasonal or fluctuating income. The catch is that security and strong trading evidence are standard requirements for most facilities.
Best next step: Flexible loans up to £1,000,000 with 24-hour decisions.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Fast 24-hour turnaround on applications
- Flexible terms for seasonal income patterns
- High upper limit for growing businesses
Need to know
- Security and strong trading history needed
- Personal guarantee is standard practice
- Monthly interest rates apply to facilities
Expert take
A fast-moving lender with deep experience in the alternative finance market. For sole traders, the appeal is the combination of speed and flexibility, and those with solid trading records and assets typically find the underwriting process smooth.
Source:https://www.iwoca.co.uk/
SWIG Finance
Published loan range£500 to £250,000
Rate typeinterest 6% to 6.18% annually
Overview: SWIG Finance lends to businesses that may struggle with mainstream lenders, offering term loans from £500 to £250,000 with annual interest rates rather than monthly charges. Sole traders with thinner credit files or shorter trading histories often find the criteria more accommodating. Funding decisions can arrive within 24 hours, though a personal guarantee is standard.
Best next step: Loans from £500 to £250,000 with annual interest rates.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Annual interest rates simplify long-term cost planning
- More accommodating criteria than mainstream lenders
- Decisions within 24 hours for eligible applicants
Need to know
- Personal guarantee is standard requirement
- Maximum loan capped at £250,000
- Strong affordability checks still apply
Expert take
A lender with a broader appetite than most, willing to look past thinner credit files. Sole traders who have been turned away elsewhere often find the door open here, and the annual rate structure keeps long-term costs transparent.
Capify (includes Rapital)
Published loan range£10,000 to £1,000,000
Rate typefactor 1.1% to 1.35% monthly
Overview: Capify uses a factor rate structure starting at 1.1% monthly, which sole traders may find simpler to model than compound interest. Loans range from £10,000 to £1,000,000 with a 24-hour decision window for clean applications. Security is typically required, and you should be prepared to show solid trading history to meet underwriting standards.
Best next step: Factor-rate loans from £10,000 to £1,000,000 with quick decisions.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Simple factor rate structure from 1.1% monthly
- 24-hour decisions on clean applications
- High upper limit suits larger funding needs
Need to know
- Security is typically required for facilities
- Solid trading history expected by underwriters
- Factor rates work differently from APR
Expert take
A lender that keeps pricing simple with factor rates rather than compound interest. Sole traders comfortable with this structure will find a wide lending range and quick turnaround, making it worth understanding how factor rates compare to APR.
Source:https://capify.co.uk/
Swishfund
Published loan range£10,000 to £450,000
Rate typeinterest 1.1% to 3% monthly
Overview: Swishfund structures term loans with monthly interest rates from 1.1% to 3%, giving sole traders a predictable repayment schedule across facilities from £10,000 to £450,000. Approvals can complete in 24 hours where paperwork is in order. The lender generally asks for security and strong trading evidence, so newer or asset-light businesses may find the bar higher.
Best next step: Term loans from £10,000 to £450,000 with structured repayments.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Predictable monthly repayment schedule
- Competitive monthly rates from 1.1%
- 24-hour turnaround for straightforward cases
Need to know
- Security generally required for approval
- Newer businesses may struggle to qualify
- Personal guarantee is standard
Expert take
A term loan provider that suits sole traders wanting repayment certainty. The monthly rate structure is transparent, and for businesses with established trading and assets, the 24-hour turnaround makes it a practical funding route.
Source:https://www.swishfund.co.uk/
Bizcap
Published loan range£5,000 to £750,000
Rate typefactor 1.1% to 1.4% monthly
Overview: Bizcap stands out for speed, funding eligible sole traders in as little as three hours. The revolving credit facility lets you draw, repay and reuse funds, which suits businesses with uneven cash flow. Amounts go from £5,000 to £750,000 with a monthly factor rate. Security is typically part of the package, and limits can be adjusted over time.
Best next step: Revolving credit from £5,000 to £750,000 funded in hours.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Funding possible in as little as three hours
- Draw and repay flexibly as cash flow shifts
- Broad range up to £750,000
Need to know
- Security typically forms part of the package
- Limits can be reviewed or adjusted over time
- Costs may rise with heavier usage
Expert take
A speed-first lender that suits sole traders facing urgent cash-flow gaps. The revolving structure adds flexibility, and the three-hour funding window sets it apart for businesses that cannot wait days for a decision.
Source:https://www.bizcap.co.uk/
Funding Circle
Published loan range£10,000 to £750,000
Rate typeinterest 18% to 24% annually
Overview: Funding Circle is one of the UK's best-known peer-to-peer lending platforms, offering term loans and revolving credit from £10,000 to £750,000. Sole traders benefit from an established underwriting process and annual interest rates that make long-term cost comparison easier. Funding takes around 48 hours, slower than some alternatives, and security is usually required.
Best next step: Peer-to-peer loans from £10,000 to £750,000 with annual rates.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Established peer-to-peer platform with strong track record
- Annual interest rates make cost comparison easier
- Broad range suits varied funding needs
Need to know
- Security is usually required for facilities
- 48-hour funding is slower than some rivals
- Personal guarantee typically applies
Expert take
A peer-to-peer lender with institutional credibility and transparent annual pricing. Sole traders benefit from a well-established process, and the annual rate structure simplifies comparing costs against other funding options.
Tide Bank
Published loan range£500 to £20,000,000
Rate typeinterest 5% to 11.5% annually
Overview: Tide Bank brings mainstream banking accessibility to sole traders, with term loans from as little as £500 and annual rates starting at 5%. The bank's start-up-friendly stance means newer businesses may find a warmer reception than with traditional high-street lenders. Decisions can land within 24 hours, though security is standard and underwriting remains thorough.
Best next step: Bank lending from £500 with start-up-friendly criteria.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Annual rates from 5% keep costs competitive
- Start-up-friendly stance helps newer businesses
- Low minimum of £500 suits modest needs
Need to know
- Security is standard for most facilities
- Bank underwriting can be thorough and slow
- Limited company focus may affect sole traders
Expert take
A digital-first bank that has carved out space for start-ups and smaller businesses. Sole traders benefit from low entry points and competitive rates, and the start-up-friendly stance can open doors that traditional banks keep shut.
Befund
Published loan range£500 to £250,000
Rate typeinterest 8.5% to 15.5% annually
Overview: Befund offers term loans from £500 to £250,000 with annual interest rates between 8.5% and 15.5%, positioning itself as an option for sole traders who fall outside conventional lending criteria. The start-up-friendly approach can help businesses with limited trading history access funding. Expect a one-week turnaround and a personal guarantee as standard.
Best next step: Start-up-friendly loans from £500 to £250,000.
More info
Company stats
Eligibility
Loan range
Rates and debtor rules
Benefits
- Open to businesses with limited trading history
- Annual interest rates for transparent costing
- Small minimum loan suits modest requirements
Need to know
- One-week turnaround is slower than alternatives
- Personal guarantee is standard
- Maximum capped at £250,000
Expert take
A lender that prioritises access over speed, opening the door for sole traders with thinner files. The one-week timeline and annual rate structure make it suited to planned rather than urgent funding, with a personal guarantee as the main ask.
Source:https://www.befund.org/
Barclays
Published loan range£1,000 to £25,000,000
Rate typeinterest 8.5% to 14.9% annually
Overview: Barclays lends from £1,000 to £25,000,000 with annual interest rates, giving sole traders the backing of a major high-street bank. The Green Barclayloan supports environmentally focused investment, adding a specialist angle for businesses pursuing sustainable projects. Decisions can come within 24 hours, but bank underwriting is thorough and security is typically required.
Best next step: High-street bank loans from £1,000 with green finance options.
More info
Company stats
Loan range
Rates and debtor rules
Benefits
- Major bank backing with established reputation
- Green loan option for sustainable investments
- Decisions possible within 24 hours
Need to know
- Security typically required for facilities
- Bank underwriting is thorough and detailed
- Sole trader eligibility may vary by product
Expert take
A high-street heavyweight with the broadest lending range on this list. Sole traders pursuing environmentally focused projects will find the green loan angle useful, and the bank's reputation can add credibility to larger funding applications.
Unsecured Business Loan Calculator
What turnover sole traders need for unsecured business loans
Sole traders can access unsecured business loans across a wide turnover range. At the lower end, SWIG Finance publishes no minimum turnover requirement, and CubeFunder accepts applicants from £4,000 in annual revenue. Iwoca sets its floor at £5,000. These options keep the door open for smaller sole traders and early-stage businesses.
Mid-range lenders lift the threshold. Funding Circle looks for at least £30,000 in turnover. Capify and Swishfund both set their minimum at £50,000, which may exclude younger sole trader operations. At the higher end, Bizcap requires £144,000 in annual revenue.
The key takeaway for sole traders is that turnover requirements vary sharply between lenders. If you trade part-time or seasonally, focus on lenders that set lower minimums. Lenders will also look at the consistency of your income, not only the headline figure.
Trading history requirements for sole trader unsecured business lending
Sole traders often worry that a short trading history will block them from getting an unsecured business loan. Several lenders on this list are built for that concern. SWIG Finance and Tide Bank both consider applicants with no minimum trading history. Iwoca requires just one month of trading, and CubeFunder asks for three months. Bizcap starts at four months.
Other lenders expect more established operations. Capify wants six months of trading history. Swishfund and Funding Circle both require a full year, which may rule out newer sole traders.
If you have been trading for less than a year, target lenders with shorter minimum periods. Even lenders with relaxed history rules will want to see bank statements or trading records covering the months you have been operating. The quality of those records matters as much as the length of time you have been trading.
Personal guarantees and credit checks for sole trader unsecured loans
Nearly every lender offering unsecured business loans to sole traders requires a personal guarantee. This is standard across the market. CubeFunder, Iwoca, SWIG Finance, Capify, Swishfund, Bizcap, Funding Circle, Tide Bank, and Befund all list personal guarantees as a requirement.
For sole traders, this carries extra weight. Unlike limited company directors, sole traders are already personally liable for business debts. A personal guarantee reinforces that position and means your personal assets could be at risk if the loan defaults.
Your personal credit score will also come under scrutiny. Lenders use it to assess how reliably you manage debt. A clean credit history improves your chances and may help you access lower rates. If your credit file has issues, some lenders on this list may still consider your application, but the cost of borrowing is likely to rise.
How sole traders can strengthen an unsecured business loan application
Sole traders without collateral can still take practical steps to improve their chances of approval for an unsecured business loan. Start by preparing clear, up-to-date financial records. Most lenders will ask for bank statements, tax returns, or SA302 forms. Having these ready speeds up the process and shows you are organised.
Next, check your personal credit report before applying. Correct any errors and pay down outstanding debts where possible. A stronger credit score can open up better rates across lenders like SWIG Finance, which publishes rates from 6% per year, compared with monthly-rate lenders such as CubeFunder at 2.5% to 4% and Iwoca at 1.6% to 5.6%.
Finally, borrow only what you need and can comfortably repay from business income. Lenders assess affordability, not only eligibility. A realistic loan amount relative to your turnover signals good judgement and increases the likelihood of approval.
