Top tips for the self-employed when applying for a loan

Over the past few years, the UK gig economy has been growing at an exceptional rate, as people are drawn to the ease, flexibility and latent awards of becoming self-employed. The rate of mushrooming firms is rising up with 5.7 million new businesses in the UK. Out of these 5.7 new firms, 36% of the self-employed people use external sources like the online lender to fund their businesses.

However, despite the big businesses and organisations supporting the booming trend, sadly, the banking sector has failed to keep up with the fast pace of change. As a result, the self-employed often find it much harder to obtain a self-employed loan than someone in full-time employment.

Some of the concerns that the self-employed face when applying for a loan from a high street lender include having a variable income, a short trading history or problems in verifying their income. However, there are a number of simple yet effective methods that can help in creating the best possible chance of getting a loan approved.

Use a loan broker

Getting professional opinion is valuable for the self-employed when applying for a loan. Drawing into a broker’s specialist knowledge will enable the borrower to get more information than internet research alone can provide them on the full range of lenders that can provide bad credit loans with no guarantor and can also give debt products available to the borrower.

Check your credit history

Before applying for a self-employed loan, check online for any red flags in your credit history such as one-off missed repayments or errors, as these can go against you during the approval process. If you find out you have an unfavourable credit history, it’s worth, going direct to a broker who is more flexible when it comes to your credit score. The high street banks tend to have stringent standards on this, but with a professional lender or loan broker, you can necessarily get approved for a loan.

Don’t bug if you’ve never had a self-employed loan before

Many people think that being both self-employed and a first-time credit buyer, can add an extra layer of complexity to the loan approval process since they don’t have a loan payment history to fall back on. If you also find yourself struggling to obtain your first loan, it’s worth considering the feasible options that can get you onto the ladder, including shared ownership, or specialist loan products.

Whatever steps you decide to take it's important to remember that, even if you aren’t approved for a loan, there are still lots of choices open to you to get the finance you need, with lenders that will take a different view on your credit history or your level of income. Also, reports confirm, 34% of the businesses assume it will get more difficult for them to access investment post-Brexit, therefore, the more quickly you take charge of your finance, the more helpful it can prove to be for your business.

Find out more about our self-employed loans here.

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Created on Mar 28th 2019 06:07. Viewed 921 times.

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