Self-employment, freelancing and contract work gives you the freedom and flexibility to let you live life the way you choose. But it can lead to some challenges when you try to get a loan. The type of work you choose shouldn’t stop you from achieving your goals. So we’re here to make sure loans for self-employed people and contractors are easily accessible.
Fill in our pre-qualification form and our Finance Technicians will assess your situation to find the best deal possible for you.
Loans for the Self-Employed
Typically, loans aren’t specifically designed for self-employed people. The loan itself is essentially the same as any other type of loan, it’s just the lending criteria is different and often requires more documentation. This is mostly because self-employed people don’t have the same paperwork that regular employers get such as payslips.
This means, if you’re self-employed, your main difficulty with most lenders will be simply proving your financials and supplying the amount of paperwork they require.
Loantec operates a little differently from traditional lenders. By comparing the policies and interest rates of 40+ lenders we’ll be able to find the one that’ll be best for you. We know how to present your documentation and financial record in the best possible way, so you can be confident that you’re getting the best result.
What Documentation Do Self-Employed People Need?
The primary difference between someone with full-time employment and someone self-employed from getting a loan is the types of required documents. Because you’re unlikely to have a steady income, you’ll need to demonstrate your income differently. Although each lender may differ in what documents they request, here’s a general overview of what will be requested.
- A minimum of 6 months of financial statements that show your business profits & losses
- 2 years of your company/personal tax returns
- Bank statements that demonstrate all the outstanding debts for you & your business
- Proof of rental income (if applicable)
- A Notice of Assessment from the Australian Tax Offices (ATO) for the last 2 years
- Your ABN & company address
- Personal identification such as a passport or drivers licence
When you speak to our Finance Technicians, they’ll walk you through everything you’ll need and let you know how to find it.
The purpose of all this documentation is to assess how reliable you’ll be as a borrower. Being self-employed typically means that you don’t have a stable income, so lenders need to make an assessment based on the cash flow of your business.
Low Doc Loans
At Loantec we cater to a wide range of clients. And we know that not everyone fits into the one size fits all approach the big banks put you in. Sometimes it’s not an option to get all these documents. We believe this shouldn’t prevent you from achieving your dreams. Low document (low doc) loans allow you to get financing without needing to go through every scrap of financial information you have.
All you need to do is talk to our Finance Technicians about your circumstances and we’ll let you know what your options are. We’ll assess what kind of financing you have access to and what you’ll need to provide.
If you’ve got a good financial history, lenders will be more likely to approve you for a low doc loan. It also might be advantageous to go with this option if the tax return from 2 years ago doesn’t accurately reflect on your current financial situation or the health of your business today.
Fill in our pre-qualification form to talk to the experts and we’ll provide you with your best financing option.
Can the Self Employed Get Any Type Of Loan?
In short, yes.
Any type of loan that’s available to someone who’s in traditional employment, is available if you’re self-employed. Your application is still judged on the standard risk assessment criteria. 3 primary factors dictate whether you’ll be approved for financing. They are income, assets/debts, and credit history.
Income
To assess your ability to make your loan repayment, the first thing they’ll look at is your income. If you’re traditionally employed it’s relatively easy to figure this out, just look at your payslips. For the self-employed your income may regularly change, resulting in some uncertainty to your ability to make the repayments. This is why you typically need to supply more documentation about your business than most people.
Assets/Debts
A debt to income ratio is a standard metric to judge how much money you’ll have after paying off all your debts. Your weekly income might average around $7000 a week. But, if you’ve got 5 employees and pay rent for the building you’re in, these costs will take away from your income.
Your assets can improve your financial reliability. Having savings and assets can increase your likelihood of approval. You can also put up an asset as collateral against the loan. This lowers the risk of the lender losing money on the loan, increasing our chances of getting approval.
Credit History
Whether you’re self-employed or not, your credit score is factored into your application. Your credit trustworthiness is largely based on how well you’ve handled your financial commitments in the past. Not paying off your credit cards or defaulting on a loan can hurt your ability to secure financing through many of the big lenders.
But here at Loantec, your credit score doesn’t hurt your ability to get a loan as much as it does with traditional lenders. We’re primarily concerned with your current financial circumstances rather than your past.
No matter your situation, our Finance Technicians will walk you through your financial options and let you know precisely where you stand. We’ve helped thousands get the financing they need with the lowest interest rate available to them. Whether you’re self-employed, full-time, part-time or between work, we’ll secure your best option.
Fill in our pre-qualification form and you’ll be taking the first step towards getting the best loan today.