Can I get a loan if I'm self-employed?
Written by
Joe Towner
Reviewed by
Amy LancashireYes, you can get a loan if you're self-employed in the UK. Being self-employed makes lenders look more carefully at your application, but it doesn't disqualify you. They'll want clear evidence of your income and confidence you can afford the repayments. What loan suits you depends on what you need it for and how long you've been trading.
Why being self-employed makes lending decisions different
When you're employed, your payslip is straightforward evidence of regular income. When you're self-employed, your earnings can vary month to month, and lenders have to work harder to assess whether you can comfortably afford repayments over the full loan term. That's why most lenders ask self-employed applicants for additional paperwork: filed tax returns, bank statements, or accounts prepared by an accountant. The Financial Conduct Authority requires every UK lender to assess your ability to repay sustainably. It isn't extra suspicion of self-employed borrowers, it's part of the standard affordability assessment that applies to anyone.
What types of loans can self-employed people apply for?
There's no single "self-employed loan" product in the UK. Self-employed people can apply for the same types of loans available to anyone, with the lender deciding how to assess each application.
Personal loans
Unsecured loans for personal expenses, like a car, home improvements, or debt consolidation. You don't put up any asset as security, so approval depends on your credit history and affordability. Typically £1,000 to £25,000 over one to five years. Read more about what an unsecured loan is.
Secured loans
A secured loan uses an asset, usually your home, as security. Because the lender's risk is lower, secured loans can be easier to get with a shorter trading history or weaker credit, and you may be able to borrow more for longer. The trade-off is real: if you can't repay, you risk losing the asset, i.e. your home. Read more about what a secured loan is.
Guarantor loans
A guarantor loan has someone with good credit, like a friend or family member, agree to repay if you can't. Useful if you have limited credit history. The guarantor is legally responsible for the debt, which makes this a serious commitment to ask of someone. Read more about what a guarantor loan is.
Business loans
These are used for business spending such as stock, equipment, or growth, rather than personal use. Lenders assess your business's performance alongside your personal credit. Loan amounts and terms vary widely depending on the lender and the type of business.
Government-backed Start Up Loans
The UK government's Start Up Loan scheme offers between £500 and £25,000 to people starting or growing a new business. It's technically a personal loan with a fixed interest rate, but the money must be used for business purposes. Available to UK residents aged 18 and over whose business has been trading for under 60 months.
What lenders look for when you're self-employed
The things lenders assess will include:
Income stability. How consistent your earnings have been over recent years.
Trading history. How long you've been self-employed, with records for recent years.
Affordability. Your regular outgoings, existing debts, and how much disposable income you have each month.
Credit history. Your past borrowing and repayment record.
Proof of income. Filed tax returns, accounts, or bank statements that confirm what you earn.
Some lenders also use Open Banking to view your recent bank transactions with your permission. This can help if your trading history is short or your most recent earnings are stronger than what your last tax return shows.
What documents do I need?
The standard documents most lenders ask for are:
Your SA302 tax calculation from HMRC, typically for the last one to two years
Three to six months of personal and business bank statements
Proof of ID, such as a UK driving licence or passport
Proof of address, such as a recent utility bill or council tax statement
Some lenders may also ask for accounts prepared by a qualified accountant if you're a limited company director or partnership member.
Common situations
I've just become self-employed
If you’ve been trading for less than two years it might be tougher to get a loan. Some specialist lenders will consider applications with one year of trading, particularly if you were previously employed in the same field. Lenders that use Open Banking can also assess your live financial picture rather than relying solely on filed accounts.
I can't easily prove my income
You'll always need to evidence your income in some way. If you don't have an SA302 yet, regular income shown on your bank statements, or Open Banking access to your account, can both serve as proof. Be cautious of any lender advertising loans with "no income verification" in the UK, as proper affordability checks are a regulatory requirement.
I have bad credit
Bad credit makes approval harder and usually means a higher APR. It doesn't always rule you out, but you may need to consider secured or guarantor options. It's worth checking your credit report for errors, registering on the electoral roll, and reading about how to increase your credit score before applying. Some lenders specifically consider loans for bad credit.
How to improve your chances of approval
File your latest tax return. Lenders want to see your most recent earnings, not paperwork that's 18 months old.
Keep your accounts tidy. Clear records make it easier to evidence income. If you mix personal and business spending in one account, consider separating them.
Check your credit report. Look for errors and dispute anything wrong. Make sure you're on the electoral roll.
Use a soft search first. Most reputable lenders offer an eligibility check that shows your likely rate without impacting your credit score.
Only borrow what you need. Asking for less, over a shorter term, lowers the affordability bar and reduces what you'll pay in interest.
FAQs
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
