Credit and independent – both are mutually exclusive. At least that’s how it seems. The self-employed, freelancers, entrepreneurs and craftsmen find it difficult to take out a loan on reasonably reasonable terms. Even auto financing can be a problem. Financial service providers and banks are often adorned. Why?
In contrast to the self-employed, the banks, which are not exactly known for their enthusiasm for innovation, miss the predictable income development for the self-employed. They believe that the self-employed are particularly affected by the ups and downs of economic development. They simply fear that, in their opinion, the risk of default on loans for the self-employed is too high. But the safe job of the worker is only a myth. Safe, lifelong jobs are becoming increasingly rare. It is often entrepreneurs, artisans and freelancers in particular who are able to get back on their feet more easily after an economic downturn.
It is difficult to understand why there are so many bureaucratic hurdles, especially when it comes to loans for the self-employed, long waiting times and cumbersome, time-consuming reviews of income and assets.
Credit for the self-employed: the specifics
The main disadvantages compared to loans to employees are the higher entry requirements and the higher interest rates. In addition, the possible maximum sums are usually lower and the terms can be shorter.
Banks particularly check sustainability in terms of income and wealth and are happy to secure themselves with additional collateral. The combination of good and orderly economic conditions and usable collateral significantly increases the willingness to lend.
Self-employed applicants are therefore well advised to provide convincing evidence of their economic situation and also to offer additional security.
In addition to a good, long-term income, the provision of collateral is an essential point, although it often cannot avoid interest premiums.
All collateral customary in banking is considered: Additional applicants, guarantors, transfer of security to and cession of security from capital life insurance, securities holdings, savings deposits, call money, time deposits and other.
A loan without proof of income is always excluded for the self-employed. Which documents have to be submitted together with the loan request varies with the banks. Typically, some of the following evidence is required:
- Income and surplus accounts, profit and loss accounts, annual accounts for the past two to three years.
- If necessary: business evaluations.
- Income tax returns
- Bank statements without deletions over longer periods of time to prove sustainable regular income.
- If applicable: Submission of a business plan
Loan for self-employed and credit rating
The well-known small loans without credit rating are not given to the self-employed. Prerequisite is always dependent employment. credit rating information will always be obtained. In some cases, the banks are not satisfied with credit rating information alone, but try to find other credit agencies.
If there are negative credit rating entries, two cases have to be distinguished: the existence of hard negative characteristics always precludes a loan. A loan is therefore not possible if legally binding titles, enforcement measures, bankruptcy, affidavits or arrest warrants are found.
On the other hand, loans for the self-employed are not excluded from the outset when soft entries are made. And titled claims due after delay are, for example, soft negative credit rating entries. In such cases, lending is made easier when collateral can be provided like a second applicant or a guarantor.
Positive credit rating entries, on the other hand, make lending easier. For example, processing a pre-loan in accordance with the contract is a positive feature.
Self-employed persons should obtain self-disclosure before making a loan request and have any errors found corrected. This also applies to personal information such as an address. In some cases, the place of residence is a creditworthiness criterion.