Self-employed persons are principally entrepreneurs with a trade license, while freelancers carry out activities on their own accounts for which the legislature waives the registration of a trade. Employees of both employment groups are disadvantaged in borrowing as some financial institutions generally exclude them as credit customers.
Borrowing by self-employed and freelancers for business purposes
It is easier to apply for self-employed and self-employed loans than for private purposes if it is business related. A strict distinction between business and private loans also makes sense for the recognition of the interest payable as operating expenses. Both regional Volksbanks and savings banks, in accordance with their statutes, promote the economy of their local business, making corporate lending one of their main areas of responsibility.
In addition, both large banks and some banks specializing in specific professions offer loans for the self-employed and freelancers. When financing an operating vehicle, leasing rather than conventional car loan is recommended, as leasing rates are fully tax-deductible and not just interest-rate as operating expenses. Small businesses and freelancers have a good chance of getting the loan they want, even on a privately-owned platform, for business purposes.
The personal loan for the self-employed and freelancers
A self-employed loan for the self-employed and freelancers is legally a personal loan, although some financial institutions with this name indicate that they only accept employees as customers. The reluctance to lend to freelancers and the self-employed is largely based on their irregular income generation witahin one year. In addition, there is the possibility to book individual expenditures and revenues optionally in an earlier or a later year.
The lack of protection against loss of income as a result of illness, which is sometimes lacking among freelancers and the self-employed, also contributes to the fact that this group of people is not often seen as a credit partner at all banks. In order to avoid unnecessary credit inquiries and cancellations, self-employed professionals and freelancers pay attention to apply for their desired loan from a bank that counts them among their clientele. As a proof of income in privately arranged loans for self-employed and freelance borrowers usually serves the last income tax assessment.
In a credit-based interest calculation, the existence of a daily allowance insurance often contributes to an improvement in creditworthiness and thus at low interest rates, as the insurance repeals the greatest default risk. Part of the lenders only pays loans to the self-employed and freelancers if they have been working for at least three years, whereupon younger freelancers and entrepreneurs also pay attention to their choice of lending institution.
Does the loan broker help?
The involvement of a credit intermediary can increase the chance of obtaining a loan for the self-employed and freelancers. This applies in any case to a possibly desired loan without private credit, which non-employees receive almost exclusively through the cooperation of a credit service provider. The principle that credit intermediaries do not charge any initial costs and only charge a contingency fee should be known to freelancers and the self-employed.