Obtaining a loan for the self-employed as a self-employed entrepreneur or small business owner is more difficult than if you are employed in a regular job. For example, banks always demand more collateral for a loan for the self-employed than is the case for people who have a recurring monthly income.
What is different about self-employed credit
If you are self-employed, regardless of whether you own a small, medium-sized or large company, it is always difficult to get a loan as an owner. Because many banks and credit institutions shy away from the risks, since it is not always guaranteed that the monthly income of a self-employed person is always sufficient to satisfy the installment of the loan. For example, the interest on the loan amount is often set higher from the outset than for salaried borrowers. The banks also require sufficient security for the loans for the self-employed, which they can fall back on if the borrower fails to pay.
What types of collateral do most banks and credit institutions require?
The balance sheets of the past few months should show that the income of the self-employed has grown continuously or at least remained at the same level. It must also be proven that self-employment has been successfully practiced for a long time. This can be demonstrated by a business analysis that banks and credit institutions require. There should also be no negative Credit bureau entries for the self-employed and his company.
It is also always helpful if you can prove the monthly incoming payments with the bank statements of the last three to six months and can therefore prove that there is a regular monthly incoming payment. If the lending bank is still skeptical and does not want to engage in a loan for the self-employed on the basis of the evidence provided, it is still possible to designate another person as a guarantor for the loan. The bank or credit institution can then contact the guarantor to pay any outstanding loan installments and also fall back on them if the entire loan amount is due at once due to the borrower not paying.