The step into self-employment requires not only courage and perseverance, but often also a financing. This is a serious hurdle for some. For self-employed people need financing for purchases such as office equipment or for the right marketing concept for a website, especially at the beginning of their self-employment. Many founders, traders and small businesses also fail. The reason for this is not the bad business idea or the poor implementation, but the lack of liquidity. Because complicity in such a misery also contributes to a sometimes poor payment behavior of customers who do not pay their bills or very late.
A self-employed loan is usually more expensive
Investing and maintaining a business, a company or a self-employment cost money and in most cases require funding. Banks are now extremely restrictive in granting loans for the self-employed and have high requirements for a license. The background to the frequency of this reluctance by banks is partly due to the risk of default and the threat of credit, which is initially difficult to service and then later serviceable. The payments are pending and the bank only has the reminder of the dunning and enforcement order or even the lawsuit for payment. As a result, many banks already shy away from credit checks for self-employed and start-ups on their own, because the outlay is significantly higher than when lending to the end user. Just reading and understanding a business plan or the balance sheet (profit and loss account) is a high cost for the bank, which prefers lending with the least possible effort.
Self-employed know the problem only too well: They need a loan for self-employed with immediate payment, go to their branch bank and are first patterned critically. The self-employed are particularly hard-hit because of their changing income and the risk of bankruptcy, and usually get even worse credit conditions than a salaried employee. They usually pay the higher interest rates. But: Who wants to apply for a loan for self-employed, as well as the currently low interest rates as the end user. On the Internet, a comparison can be made of a large number of direct banks, which have low interest rates for the loan for freelancers, for the loan for entrepreneurs, for the corporate loan and also for the business loan with rapid allocation in the portfolio.
Self-employed loans – there are always alternatives
Anyone who has trouble getting a loan approved as an entrepreneur regardless of their creditworthiness can fall back on alternative solutions and providers in the credit market. A great help is the loan for self-employed comparison, with which many providers can be found with favorable conditions.
A loan for the self-employed is not only about the private credit rating, but also to ensure the repayment of the borrowed amount. Those who can convince them that they are successful within a certain period of time, get a desired loan for entrepreneurs. As a founder, there is the possibility to apply for a promotional loan from KfW Bank or a start-up loan
- Collateral – Due to the non-regular income, banking institutions often rate the self-employed as an insecure contract partner.
To increase the prospect of a loan, you can offer the lender additional security: this can be, for example, a property or a life insurance.
- Second borrower – The option for a self-employed loan would also strengthen an additional borrower. Because in this case, the income of both borrowers in a pot, which increases the income. This makes repayment more likely and less risky for the bank. The second borrower should therefore be able to prove a fixed income as well as a positive private credit.
Self-employed loans – step by step
If there is a financial shortage of self-employed people and you need to invest in new machinery or production facilities, or if you need to buy new computers, then the funds you need should be available as quickly as possible from the bank. Best with a quick loan. The application for such a loan for self-employed online via the Internet, different and faster than any branch bank. For decision making, the results can be used from a credit comparison. The offers can be compared easily and quickly. Once you have decided on a provider, the process of applying for credit begins.
For this application, it is first necessary to determine what the actual loan requirement is so that the exact amount of money for the self-employed loan can be determined. Above all, it is important that one knows the exact need for credit and can weigh whether one still spends additional equity. The calculation of the terms and the term are also important to find out if you can actually serve the loan for self-employed with the repayment. If the income could fluctuate in the future, then a longer term would make sense. It should also be considered whether the offers with special repayments come into question. Because if higher sales and profits are expected, then you can reduce interest charges and monthly rate. A special repayment or special payment means a complete or partial settlement of the residual debt.
The loan application itself is provided with the indication of the personal data and the indication whether a second borrower still participates in the contract. That would improve the chances of granting and the conditions. Finally, information on the income situation must be made and the last BWA’s (economic evaluations) and income tax assessments ready. After that, the process of applying for a self-employed loan can begin.
Even if the liquidity problem can be solved in a few weeks or months, the loan application should be made. Depending on the bank, it may take several days to process an individual loan offer. In addition, every consumer has the statutory right of withdrawal (within 14 days after the signature) and can withdraw without giving reasons.
A self-employed loan should be flexible
Extremely important for the self-employed is a loan offer that includes flexibility. The monthly rate and the initial repayment should be as low as possible, so that a freelancer, self-employed person or entrepreneur can still service the rate at the end of the month, even in unfavorable business development. Conversely, there should be the opportunity to make special repayments in good business hours. The prerequisite for this is that these special payments in the agreement are included in the credit agreement and that no fees are charged. For many providers, borrowers can pay up to five (sometimes even ten) percent of the loan amount a year at no extra cost. Depending on the situation, some banks even offer the option of changing rates for self-employed loans.
Loan for self-employed individuals
If, despite taking into account the above mentioned advice with the loan for self-employed should not work, so there is also the possibility to borrow money through a private person. In a credit comparison, there are also providers for so-called P2P loans, which are provided by private individuals.
In general, private lenders are more willing to invest in low credit ratings than banking institutions, even if the income is generated through self-employment. Private investors often provide private individuals with financial means to support, for example, interesting self-employment projects. This is interesting for all those who are currently working on an exciting project. The indication increases the chances of a loan being granted by a private person.
Individuals invest in a money lending with very individual and different conditions. As a result, P2P (peer-to-peer) credit may incur less fees than a traditional bank loan.
Conditions for a loan for self-employed
Banks and savings banks grant loans only after intensive examination. That is why the framework in which the banks and the savings banks are involved is quite narrow. It leaves no room for deviations from the requirements for lending. Nevertheless, the conditions and basic rules for an instant loan or microcredit are always the same: The borrower must be of legal age, should not have a negative private credit entry and a permanent residence in Germany. This applies to both workers and employees alike.