Getting a business off the ground can hard on a shoestring budget. You struggle the first couple of years at it and eventually things start to go right. Then you decide to expand and need a business loan or you want to get a mortgage. You go to all the big banks and they have no interest in you because you don’t have what they require. This is a common problem for self employed people. So this week we are focusing on how to get a loan with our 5 tips for self employed business owners.
Pay yourself regularly: if you can’t show that you make a regular income from the business then the banks are not going to lend you money. It’s that simple, they want to see you have regular income so you can service the loan.
Get your tax affairs in order: Make sure you have all you tax returns up to date and you can get letters from your Accountant assuring the bank that this is the case. The bank won’t lend to you if your tax affairs are not in order, otherwise you could be hit with a big tax bill.
Regular saving: If you want a loan that amounts to repayments of say €800 per month then you better start saving about €1000 per month. Banks will want to see this on your account transaction. It shows you have good habits for a loan
Watch your spending: If you enjoy your weekends socialising and having a flutter on the horses at the weekend make sure you don’t have an online account and pay for your socialising with cash. If banks see that you regular spend money on online gambling and have bank card transactions at 1am every Fri/Sat night then it won’t help your credibility.
Income protection: Banks always want to lower the risk when lending to self employed people so having income protection is one of the best ways to reduce the risk that you won’t have income to service the loan.
All of the above tips require professional advise accountant, mortgage brokers, insurance broker and business coach. If you’re struggling to get a loan PracticeNav can help set your business up to make it more appealing to banks to lend you money. So why not take our free audit followed by a 30 mins call to see how your business can improve. Also feel free to join our Facebook group. Talk to PracticeNav via email firstname.lastname@example.org