Electrician Business Loans
Apply for a business loan to access the capital you need to purchase equipment, cover startup costs, or keep your cash flow healthy while you build your electrical business.
- Compare a wide range of lenders and rates
- Check your eligibility in minutes
- Find out how much you could borrow
It's fast, free and won't affect your credit score
- How to start an electrical business
- Reasons you might need an electrician business loan
- How much does it cost to start an electrical business?
- Business loans for electricians
- Electrician courses
- Choosing the right loan
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How to start an electrical business
As with many sole trader businesses, running an electrical business can mean ultimate freedom. Freedom to set your own rates and hours, choose which clients to work with, and oversee something that is completely yours. There are some challenges when starting your own business, and one is finding the capital you need to grow.
Leaving full-time employment and starting your own venture means you take a significant financial risk. So it’s useful to tap into funding options when starting out, to grow quickly and give your business the best chance at survival.
And the great news is that the UK electrical industry is one that’s evolving all the time, so there’s plenty of electrical service business types to get stuck into. While traditional electrical needs still remain, like fitting plugs, re-wiring houses, and installing electrical appliances, there’s also a growing demand for renewable energy products such as solar panels, EV charging ports, and heat pumps.
Reasons you might need an electrician business loan
For purchasing project materials upfront
Let’s say you’re taken on for a large project. Before getting paid or even sharing your invoice, you might need to purchase a large quantity of materials to ensure the job is completed to a high standard. That means you’re out of pocket, at least for the foreseeable future. In these cases, a loan can help cover those costs and give you the breathing space you need before the customer pays your invoice.
Buying or leasing a van
Your van is an essential part of your electrical business; it’s how you’ll get to each customer, and it’s important that it’s secure to store expensive tools and equipment you’ll need to rely on time and time again. A loan can mean you purchase the most reliable vehicle. Buying a top-of-the-range vehicle can mean fewer maintenance costs down the line.
Hiring new employees or contractors
As you take on larger projects, you might need to rely on other electrical contractors to help you complete the job. That could mean hiring out help to reliable contractors or even hiring employees as you grow. A loan means you’re not paying outright for this big expense; it’s spread over the course of a few months or a few years, which is much more affordable and means you can take on large projects without worrying about completing them alone.
Keeping cash flow healthy
Many clients pay late. Data suggests the average unpaid invoice amount for tradespeople is £6,210. And although having money owed to you is not ideal, you can still maintain a healthy cash flow with a business loan or a product like invoice finance. Worrying about money is time-consuming and lonely at times. Having a loan means you can cover essential business costs and operate no matter when customers pay your invoice.
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How much does it cost to start an electrical business?
Starting an electrical business can get pretty expensive. You have to shell out for:
- Tools and equipment. From basics like wire strippers and screwdrivers to more expensive tools like insulated tools, voltage testers, and a selection of drills and drill bits. Data suggests that electricians can spend up to £650 for essential tools, and that doesn’t account for wear and tear, i.e. replacing a drill bit or buying a new drill.
- You’ll need to lease or purchase a van. A van can cost anywhere between £15,000 to over £40,000. Plus, you’ll have to budget for van insurance and tax.
- Home office or rented office space. A home office can cost as much or as little as you need it to. And office space will vary depending on location. For example, average office prices in central London are £70-£160 per sq ft, but in Liverpool they’re £25-£30 per sq ft.
- Public liability insurance. The price for this is impacted by the level of risk, size of business, etc. But as an example, electricians can expect to pay around £78 per year.
- Accountancy fees. Around £300 a year for a simple tax return.
- Business registration. It costs £50 to register a limited company, but it’s free for a sole trader.
- Training and qualifications. It can cost between a few hundred to thousands, particularly when you need to complete more than one level.
Business loans for electricians
There are plenty of different electrician trade business loans available. Here are just a handful:
Sole trader business loans
Lenders design these loans specifically for sole trader businesses. That means they might not require the same documentation lenders require for large limited companies. You can apply for a loan with our lenders from as little as £1,000, with repayment terms ranging from a few months to years. As long as you’ve been trading for three months, you could be eligible for a sole trader business loan.
Startup business loans
When you’re just starting out, finances can be tight. Traditional high street lenders can reject loan applications from new businesses simply because you lack trading history, which can be frustrating. But working with alternative lenders gives you access to startup loans. Purchase your initial stock or fill your van full of useful equipment to get your business up and running with a startup loan starting at £500.
Contractor business loans
As an electrical contractor, you might think you won’t qualify for business finance, but that’s not necessarily true. Plenty of independent contractors can apply for contractor business loans; you’re running a small business after all! These loans can help you conquer contractor-specific challenges like managing cash flow, purchasing raw materials, or marketing your business to win new clients.
Small business loans
If your business is already up and running and you’re looking to expand your business, a small business loan could be a great option. You can apply for up to £500,000 through our partners. Use these funds to take your business to the next level, purchase your fleet of vans, hire a team of employees, or invest in specialist training or equipment.
Invoice finance
Invoice finance is a flexible finance solution for any business that invoices other businesses (B2B invoices only). Instead of waiting for the full invoice payment period, you can sell your invoice (or multiple invoices) to the lender, who will advance you up to 95% of the full unpaid invoice amount. This keeps your cash flow healthy without taking on traditional debt. It cannot be used for consumer invoices.
Merchant cash advance
If you take card payments and turnover at least £2,500 each month in card sales, your electrical business could be eligible for a merchant cash advance. You can apply for up to £300,000 through our UK lenders, and by repaying the same percentage each month, you don’t have to worry about fixed loan repayments when sales are slower.
Electrician courses
Staying up-to-date with industry demands, i.e. renewable energy products, helps you remain competitive. It’s also essential to remain legally compliant with changing regulations and safety standards.
So if you want to upskill but don’t know where to start, here are some courses you can consider:
- City & Guilds 2365 Level 2 & 3 Diploma in Electrical Installations. This is perfect for beginners hoping to become a qualified electrician.
- The 18th Edition Course (City & Guilds 2382-22) is a 14-21-hour course focusing on the latest BS 7671 wiring regulations. This course helps electricians meet core industry standards and is an essential requirement for the Registered Electrician state for your ECS card.
- Through the government’s National Career Service, you can search for free and paid electrical courses. Some colleges provide the courses for free if you’re eligible, and others charge a fee. It’s worth checking out what’s on offer.
There are plenty of other City & Guilds electrical courses available. You can find the most suitable one for you by visiting the City & Guilds website. If you’re looking for funding for electrician courses, our loan comparison tool can help.
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Choosing the right loan
It doesn’t matter if you’re a sole trader, self-employed, a partnership, or a limited company; there are plenty of suitable electrician loan options available for everyone through an alternative lender. You can even search our site by business type to see different types of loans for your specific industry. Our free business loan comparison tool helps you find and compare UK lenders quickly in the same place. That means no backwards-and-forwards looking at different lenders; just share what you’re looking for and compare eligible loan products. Compare costs like total repayable and interest rates, and make an informed decision before applying. Ready to find a business loan to transform your electrical business? Find and compare electrician business loans.
About the author
Adrian T
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Amazingly fast, efficient service, minimal paperwork. So much faster than my business bank of twelve years.
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