Keep all documents complete and up to date
So that the bank can get an idea of your financial situation, current and complete business documents are imperative. Bring the income tax assessments of the past three years, a profit and loss account, a list of all current liabilities and a current business analysis (BWA).
- An impeccable credit rating
First of all: with a negative credit check you have almost no chance of a loan for self-employed and freelancers. Because of the irregular income situation of the self-employed and freelancers, it is imperative that you have an impeccable credit check and credit rating – that is, you always pay your debts on time. If there is a lack of payment behavior in addition to the income situation, the risk for the bank that the loan will not be repaid is simply too high.
Check your credit check before visiting the bank. You have the right to get an insight into your credit check. It can happen that illegal negative entries are recorded in your credit check information. You can request the credit check to delete these incorrect entries. credit check will then contact the relevant company. If in doubt, you have to prove that the entry is illegal.
2. Offer collateral
Since your income is not counted as collateral for a loan for the self-employed, it makes sense to offer the bank other collateral. These include real estate or life insurance.
With such collateral in the background, banks are more likely to get involved in your project and generally offer you a better interest rate. This ensures that the bank will still get its money in the event of payment defaults due to illness, death or business abandonment.
If you have no collateral that you can offer the bank as part of your loan request, a loan with a guarantor may be an option for you. A guarantor is responsible for fulfilling another person’s liability. In our specific case, this would mean that the guarantor will pay the installment for the loan if the self-employed or freelancer is no longer able to pay it.
Spouses or close family members are often the guarantors. A strong relationship of trust should be a prerequisite for a guarantee, because the guarantor bears great financial responsibility for the borrower.