If you look around, you will find several direct lenders offering various types of loans to people with full-time job. Does that mean you cannot get a loan if you are self-employed? Wait before you jump to a conclusion. Direct lenders may hesitate to lend you money because of irregular cash inflows, but they will not always turn down your application.
Money is always a big concern when it comes to funding marketing of your freelance business. Getting a business loans is extremely difficult as lenders generally allow for it to those who have high turnover. A freelance business raises doubts about your repayment capacity, which is why lenders avoid financing your needs. You may not get steady paycheques from your clients or you may not get enough projects to keep the ball rolling. Well, whatever the reason the lender has to support the ground of rejection, you should figure out ways to improve the approval rate.
Now that you have come to know business loan may not worth considering as long as you are not running it on a large scale. What are the options then? You can apply for unsecured loans despite bad credit. These loans are a better option if you need a large amount of money. If you need a small amount, you should take out cash loans in Ireland. The hidden cost for a freelance business is undoubtedly high and there is no evident method to prove that you will pay back the loan in time, but you can improve the chances of getting a loan.
Pay your taxes
Regular payment of taxes can have your loan easily approved because it works as a proof of long-term earnings. Freelancers generally fail to show their tax record because of irregular cash inflows. If you have been paying taxes for a couple of years, the lender will likely approve your application. It also shows money responsibility that creates trust among lenders that you will not make defaults in payments.
Have a separate business account
You will mainly have your savings account that enables you to deposit and withdraw money or link with your digital wallet. You may ignore to have opened a business account as a freelancer because most of tasks are done by savings account, but it will help you get additional advantages. You should set up a separate business account so that the lender will have complete idea of your incomings and outgoings. Since you are borrowing money for advertising of your freelance business, the lender will try to decide the disbursal limit based on your business revenues.
Register your business
You may avoid registering your business to avoid the hassle, but it can be good for you. First off, you will likely pay lower taxes. Secondly, a direct lender gives more priories to a business owner than a freelancer. Further, you will get better interest rates. a registered freelance company bring more possibility to get a loan approved.
Apply with the right lender
The chances of your loan approval are high if you apply with a lender who knows you. Your lender may also provide flexibility in interest rate. However, you should also consider the deals of other lenders. Just because you are an existing customer, it does not mean that you do not need to compare deals. Cash loans may require lump sum payments that will be difficult if you choose a deal with high interest rates.
The bottom line
If you want to fund your freelance business, you can have a loan approved by following aforementioned points. However, you must remember that you need to have a good credit rating. Otherwise, the chances of approval will slow down.