Yes. Many sole traders incorporate once the business grows, and nothing stops you doing it later. In practice you form a new limited company and move the trade into it, which is a tax and legal exercise your accountant should lead rather than something to arrange informally between yourself and yourself.
The company is a brand new legal person, so it begins with no trading history of its own. That matters for borrowing: a lender assessing the company cannot simply read across your years of sole trader accounts, and a young company with a thin file is underwritten more cautiously. A broker can put that background in front of funders as supporting evidence, but it does not make the company look established when it is not.
Existing finance stays in the name of whoever signed for it. A sole trader agreement does not transfer to your new company automatically — the lender has to agree to a novation or a refinance, and some will decline. Tell your funders before you incorporate rather than afterwards, because discovering it later can put you in breach of the agreement.
Then there is the admin: notifying HMRC, dealing with VAT, opening a company bank account, and updating suppliers, insurers and customers. Registration with Companies House and the tax consequences of transferring assets or goodwill are both areas where the rules and the fees change, so work from gov.uk and Companies House alongside your accountant’s advice rather than from anything you have read second hand.
If finance is part of the reason you are considering the change, talk to us before you commit. We can explain how each structure tends to be viewed across our panel of 60+ lenders. We are a credit broker, not an accountant, and the decision itself belongs with your professional advisers.