As a freelancer it can often be tricky getting loans and the financial support you need from traditional loan providers. Even if your income streams are consistent and healthy, banks might not approve your loan application.
However, just like traditionally employed people, there will be times you need some financial support. Whether it is to reinvest in your business or for personal finances, here are four things you can do if you get rejected for a loan. Whether you are looking to get a home or car loan, it is best to know the important factors from an online auto loan guide or home loan guide.
Look for government support
If you are registered as a limited company, or even as a sole trader, there may be government grants you can apply for to help supplement your income and make up for any shortfalls not getting a loan will cause.
Check out the self-employed income support schemes available to you.
Build your credit score
For those who have only been freelance for a short while, it is important that you have and maintain a good credit rating. Banks, building societies and other loan providers will check your credit score when assessing your eligibility for a loan.
There are simple things you can do to improve your credit score such as being on the electoral roll and paying all your bills on time.
Read Also: Essential Tools for First-Time Freelancers
Apply for a bad credit loan
If your applications for loans from banks and the usual places have been rejected, you might still be able to get the loan or financing you need elsewhere. Bad credit loans typically have shorter repayment periods and higher interest rates, but if you are able to make the repayments, they could be a cash flow help.
In addition to loans, you can also find bad credit car finance and short-term financing for a host of other needs. Shop around when looking for alternative loans for the best deals.
Ask family and friends for a loan
For most freelancers, asking friends and family is usually a last resort. Freelancers often feel like they have made a choice to shake off the nine-to-five and therefore their friends and family will be less supportive when they are in financial difficulties.
However, asking for a loan from friends or family might make more sense for freelancers. The people who are able to support you probably won’t ask for interest on the loan, saving you money in the long run.