Running a small business on your own takes courage. Most sole traders I speak to are doing everything themselves, from chasing invoices to dealing with suppliers and managing tax returns. It’s no small job.
When it comes to applying for a business loan, it can feel like lenders are speaking another language. But with a few small changes, you can turn what feels like a “no” into a quick “yes.”
Here are some of the common things that hold sole traders back, and how you can fix them.
Keep your business account strictly business
Lenders need to understand how your business performs day to day. When they see personal spending mixed in with business transactions, it can make the application look more like a personal loan.
It’s perfectly fine to take drawings or transfer money to another account for personal use. Just try to keep your main business account clean and easy to follow. Having clear bank statements helps lenders see the real strength of your business.
Go beyond the basic Form 11
A simple Form 11 tax return doesn’t give lenders the full picture. Term loan lenders generally need a set of accounts prepared by your accountant or bookkeeper, with a profit & loss section and a balance sheet.
This shows how your business is performing, not just what you earned. It helps lenders make a decision faster and more confidently. It also helps you understand your own figures better, which is always a good thing when planning for growth.
If you don’t have this yet, it’s worth asking your accountant for a full set of accounts or even management accounts. It’s a small investment that can open big doors.
Keep your Tax Clearance Certificate up to date
Most sole traders are busy running their business and wearing every hat, so it’s easy to let paperwork slip. But a valid Tax Clearance Certificate is one of the first things lenders look for when reviewing a term loan.
It shows that your business is compliant and in good standing with Revenue. If you’ve fallen behind, don’t worry. In many cases, we can even help arrange short-term finance to clear a tax bill and get everything back on track. Once that’s done, more options become available to you.
Getting ready for approval
Term loan lenders usually need to see at least €100,000 in annual turnover on your accounts to provide a quote.
If your business is still building up to that level, there are still paths forward. We can point you in the right direction toward lenders like Microfinance Ireland who specialise in helping smaller businesses access finance.
Every strong business starts small. The key is getting your structure right early, so that when the time comes, lenders can clearly see your potential.
If you’re a sole trader ready to take the next step, we can help. Call the BusinessLoans.ie team on 01 55 636 55 or APPLY HERE.
