Self-employed Loans

Self-employed loans are well-liked financial instruments that help independent contractors. More and more people in recent years have started working for themselves as a sole trader after realising the benefits of following their business goals. With over 4.3 million self-employed people now residing in the UK, easy access to financing is still essential for this industry.

Funding can be difficult to come by since some lenders view borrowers who are self-employed as being too “risky” However, self-employed loans are specifically designed for this industry and assist freelancers to access low-cost financing. Self-employed loans can help improve your business in several ways, depending on how you decide to utilise your funds. From improving cash flow to debt consolidation, we can help assist you in many different ways.

What are loans for self-employed?

Self-employed borrowers use self-employed loans as a kind of business financing. Whatever would assist your venture to prosper can be paid for using the borrowed money. What’s best? You retain control over how the funds are used. Business loans and business credit for the self-employed have several advantages, regardless of whether you work as a freelancer, sole trader, or own a limited company.

How do loans for the self-employed work?

Loans for self-employed people can be divided into two categories: unsecured business loans and secured business loans, with the former being the riskier option. Self-employed finance can be a short-term or long-term funding solution for your business, with some lenders offering 10-year loans, depending on your needs. Term loans are the most popular routes to funding, fixed loan amounts over an agreed period of time.

The self-employed loans offered by our lenders range in amount from £1,000 to £500,000. They operate similarly to other loan types in that you must repay the money plus interest over a predetermined period of time.

You will be expected to pay back the loan until it is fully repaid after obtaining a self-employed business loan. Self-employed loan lenders will request either collateral or a personal guarantee from your company before agreeing to lend.

Unsecured loans – These are the preferred choice for independent contractors. Despite the fact that they are not secured by assets, they frequently call for security in the form of a personal guarantee. You must use personal finances to make up the difference if you can’t pay back the borrowed business money.

Secured loans – One or more of your assets are used as collateral for these loans. They act as a kind of security for the lender since, should you stop making payments, they will seize possession of the asset and have the right to sell it to recoup their losses.

Want to find out more or apply?

Request a call back

How does it work?

Fill in our form​

A member of the team will be in touch to collect some basic information. This helps us understand the type of funding that would best suit your business.

We find the best funding for you

We use the information you provided to source the best funding options for you and your business using our panel of over 250 lenders.

We present your options

We’ll then present you will all of the funding options available to you and give you time to decide which one you would like to proceed with.

What can self-employed loans be used for?

Your self-employed business loan can be used for any purpose that would benefit your enterprise. It’s crucial to remember that you shouldn’t use a self-employed loan for purely petty items. A personal loan would be more suitable in this situation.

There are countless possibilities for how you might use your loan, from renting an office to selling your goods or services:

Another popular funding option is to spread the cost of any tax returns, over an agreed period. We can assist you with funding your annual self-assessment tax return owed to HMRC. All we need is proof of income, a good credit rating and your self-employed business bank statement from the last 3 months.

What are the benefits of self-employed loans?

Your business may receive a cash infusion from a self-employed loan that can be used as you see fit. Self-employed loans give up a whole universe of expansion prospects for small enterprises while also providing several advantages for contractors and business owners. These loans’ primary benefits are

Flexible terms for payment: Choose between loans that have short or lengthy repayment terms and are secured or unsecured.

Ideal for smaller businesses: Self-employed small business loans are the best type of financing for independent contractors, microbusinesses, and small businesses.

Spend the money as you wish: Your self-employed business loan may be used for a range of expenses, including stock replacement and rent.

Get money fast: Unlike traditional funding sources, lenders who provide loans to self-employed borrowers can set up same-day financing.

Are there any disadvantages of self-employed finance?

Each loan has advantages and disadvantages, so it’s crucial to do your homework and compare loan providers to ensure you choose the one that best suits your company’s needs. Self-employed loans provide a number of advantages, but they also have some disadvantages.

Can be costly: Interest rates on unsecured loans for self-employment are frequently higher, which may raise the total amount that must be repaid.

High-risk funding: You must be certain you can make payments if you get a secured loan. This is due to the possibility of losing your home if you use the property as collateral for a loan.

Possibility of affecting your credit score: Your credit record can suffer even if you only forget about one payment.

Can someone with bad credit acquire a self-employed loan?

It could be more difficult for you to acquire self-employed financing if your credit is bad. Consider whether taking on extra debt is the best course of action for your company when dealing with negative credit. You should at the very least make sure that any prior obligations have been paid in full and that you have taken steps to raise your credit score.

However, it doesn’t necessarily follow that you won’t be qualified for a self-employed loan if you’ve had credit problems in the past. At Smart funding Solutions, we work to make sure that every business owner has an equal opportunity to find capital.

The short answer is that self-employed loans are still available to people with bad credit. However, it’s possible that higher interest rates will apply to you in order to offset the lender’s increased risk.

What costs can I claim for being self-employed?

One benefit of working for yourself is that you can deduct some operating expenses from your taxable income. Simply check that they are on HMRC’s list of permitted costs. Typical expenses for independent contractors that can be claimed include:

Should I compare self-employed loan providers?

Finding the best loan source for your independent business can be challenging when navigating the online world of business financing. At Smart Funding Solutions, we assist companies in locating the ideal loan source for their need. We evaluate your company and pair you with lenders we believe will be a good fit.

You are under no requirement to accept any quotation issued by a lender we match you with, and all quotes we provide are totally free.

Do I qualify for a self-employed loan?

The easiest approach to see if your company qualifies for self-employed funding is to complete a brief online application and await a response from us. If you’re unsure, check your eligibility below:

Apply Today

Contact options:

Enquiry Form

Why choose Smart Funding Solutions to arrange self-employed finance?

We can help with loans for self-employed regardless of their credit history. From business loans for bad credit, debt consolidation loans to guarantor loans. We can help package your loan application as the requirement is never the same with so many types of loans.

Since we are a credit broker, you can utilise our indicative terms portal free of charge which won’t affect your credit rating to see what might be achievable. As we’ve already indicated, we can help you save a lot of time and effort by introducing you to the top UK lenders for the requirements of your self-employed enterprise.

Fill out our online application form right away if you’re prepared to begin your adventure into self-employment financing.

Smart Funding Solutions are authorised and regulated by the financial conduct authority, FRN: 972740.

Frequently Asked Questions

keep it blank

Self Employed Loans are financial products specifically designed to meet the needs of self-employed individuals in the UK. These loans can provide necessary capital to support business operations, expansion, cash flow management, and other business-related expenses.

Anyone operating as a freelancer, contractor, sole trader, or business owner in the UK can apply for Self Employed Loans. These loans cater to the unique financial situations of self-employed individuals.

Funds from a Self Employed Loan can be utilised to manage cash flow, cover operating costs, purchase equipment, invest in marketing, finance expansion plans, and cover any other business-related expenses.

Numerous loan types suit self-employed individuals, including business line of credit, invoice financing, term loans, asset finance, and merchant cash advances. The most beneficial option depends on one’s specific business requirements.

Ensure your financial records and business plan are up to date, have a clear idea of how much funding you require and how you intend to repay the loan.

Select a suitable lender, complete the application form and provide the necessary documents such as financial statements, verification of self-employment, and a business plan. The lender will review your application and inform you of the next steps.

keep it blank

Interest rates are usually based on factors including the amount borrowed, the term of the loan, your credit score, and the financial health of your business.

While some Self Employed Loans may require collateral, others like unsecured loans or credit lines do not. The need for collateral depends on the specific loan type and the lender’s policies.

Although it could be more challenging, obtaining a Self Employed Loan with a low credit score is not impossible. Some lenders may focus more on business performance, income stability, and future potential.

Yes, schemes such as the Start Up Loans programme and the Recovery Loan Scheme could be relevant. Always refer to official government sources for the most recent and accurate information.

The timeline for fund disbursement can vary from lender to lender. While traditional banks may take several weeks, online lenders could disburse funds in just a few days.

This often depends on the terms and conditions of your specific loan agreement. It’s always advisable to discuss this aspect with your lender before agreeing to a loan.

Call our friendly team - we're happy to help