A self-employed individual may think that the journey towards building a self-sustaining business is an easy ride compared to a salary earner working at a big corporation. From all indications, it is evident, that an individual who is his/her own boss is in need of credit facilities in the same way as an individual with 1 to 3 jobs. It is central to our scheme that we equip you with the necessary knowledge and walk you through the processes involved in obtaining a loan.
A fact that seems to be not fully accepted by the public is that self-employed individuals and contractors have to work harder than employees working at a firm or an establishment. It is advisable that you go about the loan application process the same way you did when you were starting up the business. There would be a lot of hard work to put into getting a loan application accepted. We have put together some relevant details on how to make your loan application a fruitful enterprise.
Most of these creditors do not trust the financial capability of self-employed individuals. Some of these bosses in their own right obtain a huge chunk of their earnings from contract jobs. Unfortunately, for these people, there are times when their businesses hit the rock and contract jobs are not forthcoming. On the other side of the coin are non-contractors among these self-employed individuals. These individuals at one time have trouble in getting customers, who would come to them to purchase their services. These instances would cause creditors not to lend their money to self-employed individuals because of fear of non-repayment.
On a brighter side, creditors usually ask about an individual’s employment status or an evidence that indicate your business earnings. The requirements for obtaining a loan varies from creditors to creditors. One creditor may deem it is necessary for you to present your tax records while another may require you to provide a financial ledger of business transactions over a couple of years to ascertain that you have an existing client base.
Go with a private lender
Sometimes, obtaining loans from conventional establishments that offer loan facilities may seem very difficult in every sense. An alternative lies with smaller firms who render the same services as the conventional lending establishments. It is easier to go into negotiation terms with these firms in order to reach a compromise that is beneficial to both parties.
A computer is used to make decisions as to whether big lending institutions should accept or discard a request for a credit facility. The probability that your loan request scale through this screening depends on the credentials you presented. This is different with a private lender who avails you the opportunity to have a one on one contact with their representatives in order to discuss the details and prospects of securing a loan on the condition that you can provide an evidence that shows you have a source of earning. It may be that seeking loans from these conventional lending establishments may be yielding fruitless returns. It is time you turn your attention to a private lender who would certainly offer you a better chance at securing a loan.
The civility and effectiveness displayed by private lenders would draw you closer to them. The fewer strings attached to making loan requests and the guarantee of having an audience with these private lenders are merits that would definitely make clients come running time after time for loans.
Secured loans vs. unsecured loans
Getting a secured loan is not as difficult as getting an unsecured loan application accepted. Most times, entrepreneurs managing a small business would face an unsecured loan. However, the rate of rejection of unsecured loan requests far outweighs the rate of acceptance for these loans. Banks would prefer that you offer an asset of likewise value as a form of indemnity so they could have their money back at least when you fail to make repayment.
If you are still bent on an unsecured loan, private lenders are the surest way of going about getting these sort of loans. However, the probability that you get a secured loan rises by multiple folds.
Get a Co-Signer
Sometimes, the difficulty of getting loan requests accepted might be troubling so you have given up hope of ever securing a loan. Having a co-signer is one solution to this problem. Many individuals do not like to seek help in monetary terms from their close acquaintances and relatives. However, having your loan application accepted, is the ultimate aim and there is no doubting that a co-signer would aid you in getting these loan request approved at the best possible time.