Only a few banks are willing to grant self-employed payday loans. There are several reasons. On the one hand, the burden of credit checks on entrepreneurs is higher, on the other hand, the self-employed lack the security employees offer: regular income. If self-employed people need money for private purchases in the short term, there are some online offers from banks for consumer financing.
How do self-employed people get a payday loan?
Freelancers and tradespeople have to fulfill special requirements in order to obtain credit from banks. These include the following premises:
- self-employment must have already been successfully completed for two to three years,
- Proofs of economic efficiency are the last tax returns, the profit and loss account or income-surplus invoice as well as account statements and, if necessary, further business evaluations.
- There must not be any negative features in the Schufa, such as previous bankruptcies and bankruptcies.
In the case of self-employment, the bank can hardly judge whether it will get back the loaned amount. This is due to the irregular revenue from the business. Even if high sales are realized today with high profits, this is no guarantee that this will be the same in the next three years. Banks can not, as with consumers standardized check the ability to pay. They have to judge from several points of view whether there is only a short-term liquidity bottleneck with additional financial requirements or whether the company’s economic difficulties are in principle. Therefore, financial institutions secure installment payday loans to the self-employed, even if they are only small sums, extra.
In most cases, additional collateral is required for the payday loan agreement , for example the pledge of assets and vehicles or the issuing of guarantees. The inclusion of a second borrower in the contract can greatly improve the chances of obtaining a payday loan. Ideally, this second debtor is permanent and has regular income.
Are self-employed still other credit options available?
Because of their uncertain future prospects, founders and young companies have virtually no prospect of getting money for private purposes through conventional credit institutions. However, there are other lenders where even lower creditworthy entrepreneurs have a chance of getting a payday loan. Self-employed people and start-ups can borrow money from private individuals via payday loan platforms on the Internet. A well-known provider, for example, Smava, which conveys both classic bank payday loans and online payday loans from private hands. If the self-employed succeed in persuading the network community of the meaningfulness and viability of the consumer’s desire or investment, they will receive their desired payday loan amount via the portal for a certain term.
What should self-employed people still pay attention to?
For the self-employed, it is vitally important not to overburden oneself financially. The payday loans are designed like consumer payday loans , but usually have worse conditions. In this respect, freelancers and tradespeople should compare via online comparison portals interest and costs of credit and seek personal offers. The repayment installment must be financially sustainable and sufficient room for living costs must be left, with a minimum income serving as the repayment base. Self-employed should be able to realize at least 600 to 1,000 euros per month in income.
The higher the monthly minimum income, the better. Otherwise, the entrepreneur runs the risk of being quickly in arrears, which can ultimately lead to seizure of his account and the abandonment of his self-employment.