Those who do not receive a regular income will find it difficult to obtain self-employment funding. This circumstance exists even if the income is regularly available and business is doing well. Banks are always cautious when it comes to lending and see a high default risk when it comes to financing for the self-employed. Therefore, self-employed persons should be well informed and well prepared before the application so that the chances of obtaining financing are high.
Which conditions must be met?
For self-employment, certain conditions must be met. Every private customer is checked by the bank to see if it is creditworthy. A positive effect is a credit bureau information, where no entries are available and a regular income can be detected. The income must always be commensurate with the loan amount and the loan installments. Therefore, self-employment funding is only available when a microcredit is taken out. If the income is so low that it is below the seizure limit, it will be particularly difficult. In Germany, this limit is around 1,000 euros for single persons.
It often happens with these people that they are not creditworthy for this reason, even if they have a positive credit bureau. People who earn little money often need a loan, because they too have bills that need to be paid and consumer needs. A small loan can also be used to reschedule debt. If the applicant has a guarantor who signs the financing for the self-employed, the chances for banks to obtain financing increase. The guarantor must have a high income and a positive credit bureau. Only then can a guarantee be concluded.
Payment and approval of funding from this professional group
Any application for self-employment financing will be scrutinized by the bank. In individual cases it is then decided which collateral must be presented in order to get the loan as well. If no guarantor can be provided, other collateral can be used by the applicant. If all prerequisites are fulfilled then the loan amount will be transferred as fast as with other credits. It should be noted that only so much money should be taken that the rates are very small and the term is not too long.