For the self-employed, difficulties can arise when applying for a normal loan, as banks often ask for collateral in the form of regular income. A loan for the self-employed can therefore be the right solution to receive money for investments on favorable terms.
For the equipment of the office or a vehicle, with which the route to the appointment with the customer can be covered more flexibly, are important investments for the activity as self-employed. In most cases, however, there is not enough liquid funds to cover the expenses that are crucial for the existence of your own company.
A loan can help to bridge the financial bottleneck and to be able to implement the planned project. At some banks, however, the entrepreneur will encounter closed doors when asked for a loan for the self-employed, because the banks shy away from the risk.
For this reason, it is advisable to look specifically for loans for self-employed and freelancers that are tailored to the needs and facilitate the application. With the loan for the self-employed, both business investments and private wishes can be fulfilled. The loan, like other loans, offers the opportunity to use the money for any purpose.
The banks’ loan offers sometimes differ significantly in terms of interest rates and other contractual terms, which is why a comparison can be worthwhile in order to find the best loan. In principle, an installment loan is recommended, in which the sum is repaid by fixed installments every month.
Since self-employed people and freelancers generally do not have a fixed income that can be proven by proof of salary, other guarantees are required. The bank checks the applicant’s financial situation against the company’s balance sheets and looks at further business evaluations. Income tax assessments can also be used to determine whether the borrower can pay the monthly installments on their income. When choosing the right loan, the annual percentage rate should serve as a criterion, since this value takes into account all costs of financing.
Interest rates range from around 4.1 to 7.9 percent and depend on personal factors and the contractual data. The term of the loan is usually between 12 and 120 months, so that the monthly rate can be adjusted accordingly. A high repayment rate helps to pay off the loan for the self-employed faster, but it is also a high burden. Self-employed persons should therefore carefully consider in advance what amount is actually available to them for the repayment each month without getting into financial difficulties.
Loans from a total of USD 1,000 can be taken out for smaller expenses, which are easy to apply for. Investments with amounts of up to 100,000 USD require extensive checks by the banks and are not awarded to every self-employed person. In order to receive a loan for the self-employed, the entrepreneur must be able to present at least three clients, as a false self-employment is to be excluded.