Cash is the lifeline of any business. Thus every business revolves its operations around to build good credit worth besides building up the customer satisfaction. Nevertheless, many start ups find themselves struggling to avail the required financial help. Whether you just had a breakthrough launch of your business or have already made a big mark with successful one year, the main street lenders are not very keen to extend loans to self employed people.
To obtain a loans self employed you either need to have a stable source of monthly income for at least two years or a clean and robust credit report. Many lenders would even want you to have a loan guarantor to support your loan application. In absence of loan collateral it would not be a cakewalk to borrow funds in the UK.
Most self employed people either lack a constant flow of income or documents to prove long credit history. So whatever be stopping you to avail the required funds, you need to be financially prudent and get over the hurdles. You can also decide to contact a loan broker. For, they are specialists in searching tailored loans for the borrowers.
Before contacting broker for loan help make sure you have gathered all documents to prove your income channels. If you are in the business for more than one year, make sure you have filed tax return. There could never be the better proof of income than your previous year’s return. You can get a deal based on your annual income in many cases.
While contacting a loan broker, however keep following things in mind:
1. Contact an experienced loan advisor
A loan broker is basically an intermediary between lenders and borrowers. They can help a borrower find the tailored deal with the least hassles. They are great hunters for rare loans. However you must be careful to contact an experienced broker with transparent policies. Read enough reviews and have your expectations right before you contact them for loan advice. Also do not pay to a broker for access to the loan deals. Most regulated brokers share free deals with borrowers. They charge commission from lenders.
2. Opt for instalment loans
Even when you need urgent loans, stay away from payday loans (even it is especially meant for self employed). For payday loans are expensive loans which are extended for very short period. Instead opt for instalment loans. With instalment loans, you not only save on interest rate but also get ease of repayment. You pay out in parts and that helps you plan your funds more judiciously.
3. Plan repayments
Before availing a loan, have a fool proof repayment plan. You must have a clear and concise map to loan repayment. You need to ensure that you build good credit history by repaying loan on time.
4. Work on credit score
As you build good history repaying your loan, you basically build your credit score. With successful repayment of loan you would also become eligible for more loans in the future. And who knows you are pre approved for loan next time!