A sole trader is a person who runs a business in their own name, without forming a separate company. In law, the individual and the business are the same, so the person is personally responsible for the business's debts.
How it differs from a company
A limited company or LLP is a separate legal entity from the people who own or run it. A sole trader has no such separation, which is the key distinction that affects who can borrow from Credicorp.
- A sole trader and their business are one and the same in law.
- A limited company or LLP is a distinct legal entity.
- That entity, not an individual, is the borrower on a company facility.
Why Credicorp cannot lend to sole traders
Credicorp lends only to UK limited companies and LLPs for business purposes. Because a sole trader is an individual rather than a company or LLP, they fall outside who we can lend to. We are not a consumer-credit lender and do not lend to individuals.
Credicorp is an exempt business lender operating outside the FCA consumer-credit regime, so the Financial Ombudsman Service and FSCS do not apply. If your business is not yet a limited company or LLP, you would need that structure in place before applying.
See also: What is an LLP?, What is an obligor?, Why we lend to companies, not sole traders.