How Partnership Structure Affects Loan Options
An ordinary (general) partnership, a limited liability partnership and a limited partnership each carry different liability, and lenders price that risk differently, so the structure you run decides which lenders will even look at your application.
In a general partnership you and your partners are personally liable, with no veil between business and personal money. An LLP works more like a company, so members keep limited liability while still running a partnership, and which side of that fork you sit on shapes every quote you get.
Whichever structure you use, lenders still read each partner’s personal credit file before they price your application. The partnership type sets the liability; the partners’ files set the rate.
Joint and Several Liability on Partnership Loans
Joint and several liability means you can be chased for the entire debt, not just your share of it. If your partners can’t pay, the lender comes to you for all of it, and a default lands on your personal credit file.
You feel it hardest when a partner leaves, because joint liability usually keeps you on the hook for debts the partnership took on while you were a partner, even after you exit, unless the lender releases you in writing.
Sort out who owes what before you sign, not after, because a partner leaving is exactly when that question gets asked.
Personal Guarantee Requirements
You’ll be asked for a personal guarantee in almost every case, even though a general partnership already makes you personally liable. For an LLP the guarantee matters far more, because it is what strips back your members’ limited liability.
For a general partnership the guarantee adds little, since your home and savings are already exposed. For an LLP it’s the whole game, because signing one removes the protection you set the LLP up to get.
Lenders read every partner’s credit file before they set the guarantee on your application, so one weak file lifts the cost for everyone.
Which Lenders Accept Partnerships
Funding Circle stopped lending to ordinary partnerships on 23 February 2026 and now serves only limited companies and LLPs, so a general partnership has to look elsewhere.
iwoca has narrowed the same way: its own business loans page lends to a limited company or an LLP, so it is a route for an LLP and not for an ordinary partnership. For an LLP it runs £1,000 to £1 million with a decision inside 24 hours, and that speed costs real money at a 49% representative APR, so it is the fastest door rather than the cheapest one.
For an ordinary partnership, start with the high-street banks: Barclays, NatWest, Lloyds and HSBC lend to partnerships with two years of accounts and no arrangement fee on their small business loans, and they’ll want every partner to sign, with a clean look at your credit file before they price it.
Capify will look at a partnership from 12 months’ trading and £10,000 a month of turnover, and it weighs CCJs rather than refusing them outright. Fleximize lends to partnerships of four or more partners, and to smaller ones borrowing more than £25,000, from six months of trading. Each partner can also take a Start Up Loan, a personal loan of £500 to £25,000 at a fixed 7.5%.
What You Need to Apply
You’ll need your partnership agreement, two years of filed accounts, three to six months of business bank statements, and ID plus a credit check for every partner.
Your partnership agreement matters more than new partners expect. Lenders read it to see how you split profits, who can sign for the partnership, and what happens to the loan if a partner leaves.
Every partner’s personal credit file goes under the same lens, because each of you can be pursued for the whole debt. One weak file among the partners can lift your rate or sink the application.
Gather every partner’s ID and statements before you apply, because the lender cannot price the application until the last one arrives.
Business Loans for Partnerships FAQs
Can an ordinary partnership get a business loan?
Yes. The high-street banks lend to partnerships with a couple of years of accounts, Capify will look at one from 12 months of trading, and Fleximize lends to partnerships of four or more partners, or smaller ones borrowing over £25,000. The main change in 2026 is that Funding Circle no longer accepts ordinary partnerships, having narrowed to limited companies and LLPs from 23 February 2026, and iwoca lends only to limited companies and LLPs.
Is each partner liable for the whole loan?
In a general partnership, yes. Joint and several liability means the lender can pursue any one partner for the full outstanding balance, not just that partner’s share. If you leave the partnership, you usually remain liable for debts taken on while you were a partner unless the lender formally releases you. In an LLP, members are protected unless they have signed a personal guarantee.
Are partnership loans regulated by the FCA?
Only narrowly. Under Article 60C of the Regulated Activities Order, a small partnership of three or fewer partners borrowing £25,000 or less is regulated and gets consumer-credit protection. A partnership of four or more partners, or any partnership borrowing more than £25,000, is outside the FCA perimeter, so most partnership lending is unregulated.
Can an LLP borrow on the same terms as a limited company?
Broadly yes. Lenders treat an LLP much like a limited company, so an LLP can apply to Funding Circle, iwoca and the banks on similar terms. The key difference from an ordinary partnership is that LLP members keep limited liability, which is why lenders lean on a personal guarantee to bring that protection back into play.
How we reviewed partnership loans
What we covered. We looked at how UK partnerships borrow in 2026: the options across ordinary partnerships, LLPs and limited partnerships, joint and several liability, the personal guarantee, and which lenders still accept partnerships. We do not rely on comparison-site summaries or aggregator data.
Data sources. Eligibility, rates and rules were checked against primary sources in June 2026, including Funding Circle, iwoca, the British Business Bank Start Up Loans, the FCA Regulated Activities Order, and the Bank of England base rate of 3.75%.
How we handle gaps. Where a rule changes, such as a lender dropping a business type, we verify it against the provider or the official source rather than carry an older position forward.
Update cadence. We re-verify this page regularly, and whenever a lender or scheme changes eligibility or terms. The verification date reflects the most recent full review. Some links on this page are affiliate links, see our editorial policy.
Regulatory note. This page is editorial content, not regulated financial advice. Most partnership lending sits outside the FCA consumer-credit perimeter, and credit is subject to status and approval. Compare offers directly with providers before you apply.