Loan for the self-employed: Fair & straightforward
Important to the loan for the self-employed
- Offer collateral
Due to the fluctuating income as a self-employed, banks assess additional collateral very positively: For example, giving guarantors or other borrowers with good credit ratings can influence interest rates.
- Prove income
On the basis of economic evaluations you must prove your income, often in addition to the statement of previous income tax assessments.
- Business plan often mandatory
If you are an entrepreneur, banks often require a business plan. This helps to estimate how promising your project is and increases the chance of acceptance – but this rarely affects the interest rate.
- Headquarters Germany
Irrespective of the legal form, banks almost always require a place of business in Germany.
Banks advertise with favorable online conditions, simple application forms and swift decisions on installment loans. A basic requirement is the professional status. Employees, civil servants and Co. are the primary target group of the banks; Self-employed often have to meet higher requirements. But here, too, there are ways and means of obtaining the desired financing comparatively quickly.
Criteria for a favorable loan as a self-employed person
More and more banks now offer a special loan for the self-employed and freelancers. They are structured as a classic installment loan and provided with other terms. A loan comparison will find the right loan.
In a first step, banks assess their creditworthiness on the basis of average disposable income. Since your income fluctuates and, for example, can be much lower seasonally, two full calendar years are usually used. The internal minimum income is higher, the bank still deducts from this lump sums: depending on the number of people in the household flat-rate living expenses are deducted, which can also differ from your own budget.
Provide additional collateral
Again, you can easily include a second borrower in the application. If that is not enough to fulfill all requirements, collateral can be pledged. All bank-standard securities are accepted, such as life insurance policies, time deposits, disability insurance and the like.
One way of getting a low-interest loan even as a start-up is through the guarantee. The bank rates it positively when a close relative or business partner believes in your business idea and vouches for you. However, this person must of course meet all the requirements for himself.
The Private credit file can have a positive effect on your credit terms if there are already perfectly repaid loans in it. So, if you have proven your reliability with previous financing. Otherwise, their influence on the interest rate is rather secondary.
Business plan as additional criterion
If you want to apply for financing as a start-up company, you need to explain your business model with a detailed “business plan”. However, this does not replace the usual personal requirements regarding Private credit and Co. You must consider it as an additional prerequisite to get access to microfinance institutions. Positive effects on the interest rate are usually not associated with this.
Special conditions for self-employed
As already explained, in the case of installment loans, banks do not differentiate first from their purpose but from the occupational group. Employees only have to provide a few proofs regarding the income situation and the employment relationship. They benefit from a “secured income”, but instead of loan collateral, the salary agreement normally only stipulates wage and salary assignments.
As a self-employed person, however, you must provide explicit information and submit supporting documents that go back several calendar years. And this regardless of whether you need a loan for private purposes or, for example, request a working capital loan. In both cases the entry hurdles are higher.
Here are the specific requirements that banks apply instead of the usual conditions:
- proof of income
Since salary statements are missing, you must prove your income on the basis of business evaluations (BWA). They are prepared by the tax consultant and are usually required for several months retroactively. In addition, often the income tax assessments of the last one to two years must be submitted.
- Private credit entries
As with classic installment loans, loans for the self-employed are only granted if the Private credit score is perfect. Here, however, you must distinguish “hard” and “soft” negative criteria. “Hard” criteria are account surpluses, bankruptcy proceedings, affidavits and the like. “Soft” criteria are those features that may be communicated to credit reference agencies only after prior notification. For example, if you are in arrears with credit installments and the bank is in arrears. They are not necessarily an exclusion criterion, but a loan can still be obtained through collateral or guarantees.
Tip: Check regularly if your Private credit entry is correct and correct it if necessary!
Your self-employment or freelance work must be “sustainable” for the Bank; depending on the bank, you must be active for at least two to three years. Start-ups can still receive financing, for example through microcredit institutions (short maturities, small loan amounts).
Regardless of whether you act as a sole trader or act through a corporation, the legal seat must always be in Germany.
Step by step to self-employment loan
Financedel has designed the application process so that you are guided step by step through all relevant points. Each point is also explained in order to exclude false information directly.
- Determine credit requirements
First, you should calculate the amount of credit needed. In doing so, also check whether you can reduce the credit requirements with equity, such as the liquidation of cash investments.
- Calculate terms and conditions
When credit needs are established, you need to calculate what terms and conditions you can afford to finance them. Assistance is provided here of the loan calculator from Financedel. Offers are sorted according to their conditions and monthly rates for different terms and credit sums are displayed. Please note that there can be large fluctuations in income and a longer term would be advantageous. Despite everything, you remain flexible, because many offers allow for special special repayments. With higher incomes, this will allow you to slightly reduce credit and interest charges.
- Make a loan application
After reviewing the credit comparison with sample bills, the next step is to ask for personal information. Here you can also specify whether you want to include a second borrower in the application. As explained above, this can significantly improve your chances and lead to more favorable credit conditions. You will then have to provide information about the employer and the duration of your employment. Here you have to choose from the choice of the appropriate professional group, such as “self. Freelancer “or” self. Trader “. In the last step, information on the income situation is queried, in which case you should take the latest BWA and income tax assessments to hand.
Even after application, you can still resign
Even if you expect to have solved your liquidity problem in a few weeks, you should submit the loan application. Because, depending on the bank, it will take several days to process before any offers are made. In addition, you have a legal right of withdrawal, you can cancel within 14 days after signing the contract without giving any reason. Some banks voluntarily grant longer withdrawal periods, sometimes up to eight weeks.
Special features for proof and documents
Depending on whether you need to balance or not, there are differences in the evidence and evidence to be submitted. In principle, the last two income tax assessments must be filed in copy. In addition to this, the BWA of the last month and 31.12. of the previous year. You must sign the attachment with the totals and balances list.
Depending on the situation, the income-surplus bill (EÜR) has to be adjusted by 31.12. of the previous year or the profit and loss statement (P & L) of the last two years. Alternatively, you can also submit the annual accounts (YES) of the last two years.
In the case of private finances, continuous account statements of the past months are required. Here you can not make any deletions. If you have indicated additional income in the application and have received it for at least six months, you can prove it by means of the salary statements for the past three months.
In some cases, self-employed loans are only granted if old loans are completely repaid. For this purpose, the bank will send you a transfer authorization, which must be signed for each individual loan agreement. Inquire beforehand the respective transfer fees at the desired time.
questions and answers
How is the self-employed loan different from a standard installment loan?
Basically, the loan for the self-employed is a installment loan, it is repaid monthly with repayment and interest at a constant rate. The essential distinction is that higher entry requirements must be met. This applies above all to the minimum income, any guarantees or guarantees and proof of income. Instead of proving the last three months by bank statements and pay statements, BWA, income tax assessment notices, income statements or income-surplus accounts are required. This usually results in lower credit sums and shorter terms in practice, as banks value the default risk higher.
Is it less easy for self-employed to receive cheap credit terms due to the irregular income?
The fact is that only selected banks are open to the self-employed and freelancers at all and offer them private loans without a purpose. On the one hand, the barriers to minimum income, collateral and the like are higher. On the other hand, the credit check also takes more time, as much more documents must be reviewed and evaluated. If you can provide a guarantor or have attachable collateral, this disadvantage can be partially offset. However, the fact remains that self-employed people always have to reckon with certain interest premiums and these are due even when the income is far above average.
Are there alternatives to the self-employed loan if I own real estate?
In this case, there is an alternative in the form of the so-called modernization loan. Banks hereby finance repairs or refurbishments at home. As proof, they require a land register excerpt or tax notices. And even though such a loan is earmarked for such a “modernization”, you do not have to provide any further proof of the use of the money. At the same time, you receive preferential conditions and can, for example, finance business acquisitions. It is also irrelevant that the property is at the same time still burdened by a mortgage or you still finance them. Only ownership alone is sufficient as a condition for the modernization loan.
Is there a loan for self-employed without inquiry at the Private credit?
Basically, loans are granted without Private credit, regardless of the occupational group. The requirements for proofs of income and possible collateral are practically identical, because here alone income and creditworthiness are evaluated independently of scoring values. If your file contains “hard” negative features, such as enforcement measures or affidavits, you will not be able to obtain funding in a “normal” way.
The self-employed are at a disadvantage because of the lack of reliable income. A loan without Private credit they get at most from private. If their overall economic situation is good, they can hope for a loan despite Private credit, where the current circumstances are valued higher than the credit history.
Do I have to prove my income in such detail? Are not collateral sufficient?
A loan for self-employed persons without proof of income is excluded. Banks assess both the income situation and the recoverable collateral that may need to be pledged. For this they are legally required. It is therefore not possible, even with the appropriate credit rating, to apply for a loan solely on the basis of extensive collateral.
Is the loan tied to a specific purpose?
There are no restrictions on use for this type of loan. They can use the money for both professional and private purposes to compensate for defaults.
Are there any processing fees or other costs?
For a long time, processing fees are no longer common and also supreme court prohibited. Very well, but additional costs may apply. For example, for a loan loss insurance, which requires a bank of you before granting credit. In addition, guarantees can increase the effective cost of borrowing.
What effect does the loan comparison at Financedel have on my Private credit?
Basically, you have to differentiate between two types of Private credit queries for loans. In the first case, the feature “request credit terms” is stored, it is completely neutral and is stored for only ten days. That’s exactly what happens when you compare Financedel and a loan request. If you subsequently receive an offer and accept it, so the credit comes off, the feature “request credit” is saved. Only then does the credit also affect your Private credit score.
My self-employment does not exist for three years. Can I still get a loan as a self-employed person?
Most banks require a self-employment of at least two or three years. Accordingly, you are demanding income tax assessments and financial statements for the past two years and a viable business concept. As a start-up entrepreneur, you can, for example, benefit from state promotional banks or microcredit institutions. These grant smaller loan amounts partly without collateral and guarantees. Alternatively, there is still the option of the second borrower, but all other requirements must be met.
From when do I even apply as a self-employed person or freelancer?
At first, banks make a distinction between traders, ie the self-employed and the freelancer. You are considered a trader if you own a trade license or are registered in the commercial register as a businessman. As a freelancer you belong to the “liberal professions”, for example as a doctor, lawyer or tax consultant. What exactly is meant by this is regulated in § 18 EStG and § 1 PartGG. You must not be dependent on a single customer (at least three clients), the turnover of a single customer may not exceed 5/6 of your total sales. If the customer is a single client, the legislature speaks of “false self-employment”.
Which documents do I have to submit?
Submit various documents that represent a repayment guarantee for the lender. The lenders have different conditions that must be met for a loan for the self-employed. The documents are usually a business evaluation, a revenue and surplus account or a profit and loss account, the last three bank statements as proof of regular income and possibly an income tax return. In addition, there must be no negative Private credit entry. If you are already self-employed, you must prove that you have been self-employed for two years.
Are interest rates and fees for self-employed persons higher?
How interest and processing fees will vary depends on the particular lender. Some providers drastically increase the cost of self-employment, others make no distinction between employees and the self-employed, as long as repayment seems safe. Therefore, make sure to inquire before signing a contract hastily.
Are there other rules for installment payments for me as a self-employed person?
To make it easier for you, even as a self-employed person, to better plan the payment, the monthly amount of the installment and the term of the loan are contractually agreed. This is important for both sides. The self-employed knows exactly how much money he owes the lender monthly. No more and no less.
What happens if I can no longer pay the installments?
The risk of default is higher for self-employed than for employees, you have to expect. Your installment is contracted, so you have to pay the monthly sum. For example, if payments from your customers are still pending and you can not fully pay the monthly installment, talk to your lender. Lower rates may be agreed. Even if you have received orders for the coming month but currently can not raise the money for the installments you will only have to go to the bank: If you have paid properly before your installments may be a one-time suspension of the rate in question. Or you can find someone to vouch for you until you can pay yourself again. If there is no money left, insolvency must be registered.
When do I need credit insurance?
A credit insurance is needed if you want to protect yourself from any eventualities that could lead to a default of the loan payment. Especially for self-employed credit insurance is interesting even if it means an additional burden. The insurance protects against occupational disability, unemployment and death. Inquire before and decide for yourself. Do not seek credit insurance from your lender if you do not want them.
When is it credit fraud?
It is a credit fraud when there is a fraud. This has happened when incorrect or incomplete information has been provided in the presentation of economic circumstances. According to § 265b of the Criminal Code, a deception is punishable and is sentenced to a fine or imprisonment to three years. It is about white-collar crime. Getting a loan for the self-employed is a difficult process. But even if it does help you get a loan, you should never file false or modified documents. They make themselves punishable!