The Types Of Self-Employed Loans Available

If you’re looking at self-employed loans, you might be wondering how many different types of loans there are. Generally, there are many different types of self-employed loans that you may qualify for depending on your circumstances. Loans such as secured and unsecured loans, low doc loans and specialist loans may be helpful if you’re a sole-trader looking for funding.

Read ob below to find out more about the different kinds of self-employed loans.

What is a self-employed loan?

A self-employed loan is a type of finance for individuals who are sole traders, freelancers or have their own small business. A self-employed loan isn’t too different from a regular loan, depending on which type of self-employed loan you choose. Each lender may have different interest rates for their self-employed options, as well as different levels of flexibility. By choosing a self-employed loan with lower documents, it may take less time to approve compared to the time a regular home loan takes.

For some business owners, self-employed loans are a good option. Self-employed loans are generally tailored to your needs, and can sometimes require less documentation compared to a traditional loan.

The types of self-employed loans available

If you’re a sole trader or self-employed, there are many types of loans that you may qualify for. Some of the most common self-employed loans are:

Secured or unsecured loans- Generally, these are personal loans that you repay over an agreed-to period. A secured loan is a loan guaranteed by an asset, for example, a car. Your lender would use this asset as security, which means that if you cannot make the agreed repayments your lender could take possession of the asset and sell it to cover the cost of the loan.

Specialist loans – These are loans that are done through a specialist lender who provide loans for those who are self-employed. You may need a specialist due to your credit score, loan purpose, needing a loan after bankruptcy or not meeting the income verification requirements. Generally, if you’re a specialist borrower, you might be someone with a need for finance who cannot meet the criteria put forward by traditional lenders.

Low document loans – Can be used if you’re having trouble providing the number of documents needed for another loan. Low doc loans can be taken out using less documentation than what is required for a traditional loan. Typically, low doc loans are for potential borrowers who are self-employed or small business owners and don’t have access to the number of documents normally needed when applying.

How to get a loan if you’re self-employed

You may be able to apply for a self-employed loan if you do not qualify for a standard loan. However, one thing that you must be able to provide is proof of income. In some cases, this could mean having to provide a few years’ worth of business statements.

Though you may not need to provide the same documents as a standard borrower, you will still need to provide some information to verify your income. When you’re self-employed, the documents you will need to supply to your lender to get approved may include some of the following:

ABN: Having an existing Australian Business Number to prove your business is legitimate is usually necessary for a self-employed loan
Business activity statements: Generally, most lenders will need 12 months’ worth of statements. This will help your lender decide whether or not you’re able to afford the loan given your turnover

Business Activity Statements – Most lenders will ask to see at least 12 months’ worth of statements. This will help your lender decide whether or not you’re able to afford the loan given your turnover
Self-verified income declaration- Instead of tax statements and other identification, you may need to sign a statement verifying that you earn the amount you say that you earn
A letter from your accountant – While being similar to the signed income declaration mentioned above, your lender might also require an income form signed by your accountant as an added form of proof
Previous bank statements – Depending on which lender you choose, they may want to see statements from your business bank account. These could be for as far back as six months, or longer

Where does Tiger Finance come in?

Tiger Finance makes getting a loan simple. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.

We have helped countless Australians with both good and bad credit ratings to be funded for their dream self-employed loan. We understand that lending criteria from other lenders are too strict and can stop you from achieving your goals. That is wrong, and it should not hold you back.

How we can help

Our finance specialists can help you find the right loan for your project. Business loans are a complicated topic, but we will find a loan that makes your dream project that much easier.

If you are one of the many Australians finding getting a loan difficult, Tiger Finance can make the process simple and pain-free. Call our loan specialists today for your free initial consultation.