Getting a loan when you are self employed can be tough. If you also throw bad credit in the mix, the process can seem almost impossible in the current economic climate. Don’t worry, though. While your options may be limited, there are alternatives to traditional loans in BC, Canada even for those that are self employed and with bad credit.
“Can I get a private loan with bad credit?” and “What financial institutions offer the best mortgages for self employed” are among the questions we receive most often.
Regardless of what type of job they are performing, or the size of their company, most self employed individuals are worried about the whole “income proof” situation when it comes to borrowing money from banks.
But why does self employment make it more complicated for you to get a loan?
It all goes down to personal finance and proof of income. Because with no employer to vouch for your wage, you will be required to provide far more evidence to prove you have a reliable income. And this applies for all types of loans, whether you are applying for a personal loan, an auto loan, a mortgage or a credit card.
So what loan options are left for you if you wish to get your hands on some cash?
What Do Banks Look For When Approving Mortgages For Self Employed
When it comes to providing loans for self employed with bad credit, most lenders (especially traditional ones) will ask self employed people applying for a loan to bring in the following documents:
- Wage statement and tax returns for the past two years. Being a legal document, this is one of the most reliable proofs of income you need to provide when looking to get approved for a loan
- Two or more years’ certified accounts including all your costs, expenses and revenues, to demonstrate your income
- Evidence of upcoming contracts, projects or collaborations
- Proof of any rental income
- Evidence of dividend payments or retained profits if you own a company
- Bank statements
- Proof of address
Even if you may be able to provide all the documents requested above, if your credit score is bad, you will find that fewer lenders will be willing to lend to you. And even if you do find a lender, the loan will most probably be for a lesser amount than you need, and at higher interest rates than standard loans.
So… why does your credit score matter so much?
Because it includes important information such as your borrowing records, number of accounts across banks including credit cards, as well as credit history on past and ongoing loans. A good credit score usually assures lenders that you’re a responsible borrower who has the means and ability to repay the loan.
What’s The Easiest Loan To Get With Bad Credit?
No matter if you are a business owner or a freelancer with sporadic income, if you own a property, mortgages for self employed offered by alternative lenders might be your best loan solution when you are also dealing with bad credit.
Unlike A-lenders which will also check your income and credit score to approve a loan request, our private lenders in BC will mostly be interested in your home’s value. How much you’re eligible to borrow depends on the amount of equity in your home.
When choosing our financial services, you won’t have to waste your time to speak with banks or financial institutions just to have them tell you “No”. We will guide your steps from the start until the end of your mortgage loan application, and help you compare which loan terms are most suitable for you. We will also provide you with after-sales services to ensure that your existing mortgage rate stays competitive, and advise you on how to put your finances back on track.
If you are not just seeking out loans for self employed with bad credit, and are looking for an on-going specialty financing relationship, get in touch. We are 100% committed to helping all our clients get the best deal with minimal hassle. Contact us today and let us help you!