The main handicap of sole proprietorship is inadequate capital. This is because the sole proprietor has to provide all the capital for the business from their personal savings or borrowings, which may not be sufficient for the growth and expansion of the business. The business is also limited in its ability to raise additional capital since it cannot issue shares of stock to the public like a corporation can. As a result, the business may not be able to take advantage of growth opportunities or compete effectively with larger businesses.