Do you run your own Australian business? Then, I bet despite the inevitable roller coaster, you’d agree the freedom and flexibility of being your own boss outweigh the disadvantages. One of the times small-business owners face more challenges than those in traditional employment is when it comes to applying for a loan. Securing personal or business funding without a stable employment history often means navigating roadblocks and speedbumps; something made much easier with the guidance and assistance of a finance professional.
In this blog, we’ll take a look at how you, as a self-employed Australian, can secure the finance you need to grow your business or achieve personal goals.
The challenges and how to approach them
Traditional lenders often look for consistent pay slips and tax returns as proof of income and financial stability, but as someone self-employed, your income may fluctuate based on market and seasonal fluctuations. This makes it more difficult to demonstrate long-term financial stability and repayment ability, but with the right documentation in place, it’s still possible to provide a meticulous paper trail of your earnings.
The importance of documentation
When applying for a loan, documentation paints a portrait of your financial health. For a business owner, this means assembling a comprehensive set of records, which may include:
- Tax returns
- Profit and loss statements
- Business and personal bank statements
- ASIC records or ABN registration
It not only shows the stability of your income but also helps align your loan application with your taxable income.
Maintaining accurate records
Every transaction, invoice, and client payment must be recorded accurately, reflecting not just earnings, but also the reliability and growth potential of your business.
Cloud-based accounting systems have made record-keeping easier and more reliable than ever, so keep your numbers up to date to give lenders clear insights into your business’s financial health.
Building a strong credit history
A solid credit history is a powerful asset for any loan applicant. For the self-employed, it could be the difference between an approved loan and a deferred application. Ways to keep your credit rating healthy include:
- Paying bills on time
- Reducing existing debt
- Limiting credit checks
Seek Professional Advice
Engage with professionals who have experience in self-employed loans. Hint, that’s us at Grow! We bring experience and knowledge to the table, helping you understand what lenders are looking for and what’s needed to prepare a robust application.
Services we offer
Grow Financial Solutions offers a suite of financial services, including:
- Loans for the self-employed
- Personalised suggestions and case scenario modelling
- Access to a wide network of lenders
We understand the self-employed landscape and provide specialised solutions that account for your unique financial circumstances.
With our personalised guidance, you can secure the loan you need to reach your business goals and that matches with your financial capabilities. What we do at Grow goes way beyond conventional checklist lending to understand you, the person behind the application.
Many self-employed Australians have successfully secured a loan with the support of Grow Financial Solutions, so feel free to ask us about what we’ve achieved in the past and how this experience could relate to a successful outcome for you.
We’re here to help
Securing a loan as a self-employed individual in Australia requires diligence, preparation, and often, professional support. Call us today on 0468 455 685 , and let’s talk about your unique situation and then the steps we can take to secure the finances needed to position you for continued success.
Frequently Asked Questions
Q: How many years of financial records do I need to provide for a self-employed loan?
A: Most lenders will want to see at least 2 years’ worth of financial statements, tax returns, and other documentation to evaluate your income stability and ability to repay the loan.
Q: Can I get a loan if I’m a new business owner with less than 2 years of records?
A: It can be challenging, but not impossible. Supplementary documents like business plans, client contracts, and projections can help bolster your loan application if you have limited historical data.
Q: What types of documentation will lenders want to see?
A: Common requirements include personal and business tax returns, profit and loss statements, balance sheets, bank statements, invoices, and potentially a profit and loss forecast. We can let you know what each lender requires.
Q: How important is a good credit score for the self-employed?
A: An excellent credit score is crucial, as it demonstrates your ability to manage debt responsibly over time. Lenders often scrutinise credit histories more closely for self-employed applicants.
Q: Can I get a self-employed loan if I’m a sole proprietor?
A: Yes, many self-employed loans are available to both incorporated businesses and sole proprietors, provided you can show sufficient and consistent income.
Q: What makes Grow Financial Solutions different for the self-employed?
A: We specialise in understanding non-traditional income situations, offering customised solutions beyond one-size-fits-all lending criteria. Our personalised approach helps business owners find realistic loan options.