Candlestick makers, dressmakers, bakers, video game makers – the self-employed and sole traders are some of the nation’s most entrepreneurial workers.
However, like most businesses, there are times when the self-employed need a business loan. But what kind of loans are available, and what do you need to secure them? Read on the find out all you need to know about business loans for the self-employed.
Self-employed loans are financial products designed specifically to support individuals who run their own businesses. These loans cater to the unique financial needs and circumstances of self-employed individuals, including freelancers, independent contractors, and small business owners.
Just because you’re self-employed, it doesn’t mean you can’t get a business loan. Lenders may require more paperwork from sole traders and the self-employed than they would from fully employed borrowers or larger companies, but there are still finance options for those who work for themselves:
Top tip: Don’t get caught out by an error on your credit report, always check your personal and business credit scores before you apply for loan refinancing (secured or unsecured).
The documents you will need to secure a loan will vary from lender to lender and for the type of loan you are applying for. However, most lenders will need to see:
No. If your credit is good and you have all the necessary documents, the interest rate you pay and the amount you can borrow should be no different than for fully employed borrowers.
Even if you have bad credit and have been turned down elsewhere, it may still be possible to secure the loan you need. Note that weak credit may mean paying a higher interest rate, and, depending on the type of loan you are seeking, some lenders may also ask you to provide collateral to secure the loan. Read further to discover everything you need to know about loans for self-employed with bad credit, and how to secure the funds you need.
General self-employed and sole trader loans can usually be used to cover any business need. However, some loans may only be used for specific activities.
Whether you need a loan to grow your business, cover a cashflow dip, or even pay your taxes, there’s a self-employed and sole trader loan for you. Don’t waste time going from lender to lender. Register with Swoop to access the widest range of loans at the best rates, and with the best terms and conditions. One click is all it takes. Get the self-employed loan you need today.
Getting a loan when you're self-employed can be challenging because lenders often require more documentation and proof of income than they do from traditionally employed borrowers to ensure that your business generates enough income to cover the loan repayments. This usually means providing bank statements, tax returns, and detailed business information. Additionally, the fluctuating nature of self-employment income can make it harder to demonstrate consistent earning capacity, which is a key factor for lenders.
Yes, you can get a cash advance if you're self-employed. Many lenders offer cash advances or other forms of financing to self-employed individuals, although the terms and conditions might differ from those for traditionally employed borrowers. Options include unsecured loans, secured loans, and guarantor loans, each with varying requirements and interest rates. It’s important to have a good credit score and be prepared to provide comprehensive financial documentation to secure the best rates and terms.
Lenders typically look at a variety of income sources when assessing loan applications from self-employed individuals. This includes:
These documents help lenders gauge the financial health and stability of your business, ensuring that you can manage loan repayments.
Swoop was amazing! I was looking for refinancing and they were straight onto finding me the best possible option. I would highly recommend them.
Owner, F45 Cambridge
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.
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