Freelancers usually find it much more difficult to get a loan than employees. This is essentially due to the fact that the income of freelancers fluctuates significantly in some cases and can sometimes even be absent. This could be the case, for example, in the event of a long illness or if the order situation is very bad. For this reason, most banks seem to have too great a risk of lending, which often means that a loan for freelancers is refused.
The credit check: The sticking point for freelancers
A credit check is much more complex for freelancers than for workers. For this purpose, the banks needed various documents, which must clearly state what income the freelancer has had recently and whether this income is likely to be sufficient not only to make a living, but also to pay regular credit installments. Only if the credit check has led to a positive result will the bank approve a loan for freelancers.
Regardless of whether the freelancer needs an installment loan for personal or business purposes, the bank will require various types of collateral. This could be, for example, life insurance, private pension insurance or debt-free property. Anyone who cannot show all of this could still have a chance of getting a loan if they could provide a financially strong surety, or if there is little financing requirement or if a temporary liquidity shortage needs to be bridged, a current account credit or a supplier credit could also be used be taken.
The overdraft facility, an expensive solution for short-term financing
The current account credit is an overdraft on the business account, which is roughly comparable to the overdraft facility on the current account. The account holder is granted a certain overdraft limit, which is available to him at any time. The repayment can then be regulated very flexibly.
The current incoming payments on the account could also be used for this. Anyone wishing to receive a current account credit must have positive Credit bureau information and a sufficiently high income. To check this, the bank will inspect the freelance’s business records. To do this, he would have to submit either the profit and loss account, the income surplus calculation or the business analysis .
The supplier credit, a great option for traders
A supplier credit is a short or medium-term deferral of payments for services already provided or for goods deliveries. Such a loan can also help to maintain or improve the liquidity of the freelancer. Under certain conditions, if you cannot get a bank loan as a freelancer, you could still take out a personal loan. To do this, he could contact a suitable person in the circle of friends or relatives as well as a private loan brokerage platform on the Internet.