If you’re already self-employed or planning to make the big move to set up your own business, having access to workable, cost-effective finance can be integral to achieving objectives. Self-employed business finance may be required for a range of purposes including the purchase of all types of business equipment, vehicles including trucks, cars and vans and as general support for the operation.
Many individuals are drawn to self-employment as contractors in many fields. Fields that require specific equipment in order to carry out the work. Finance could be required for IT and computer equipment, technology, construction and excavation equipment such as diggers and back-hoes, beauty and hairdressing equipment, veterinary and medical devices and many, many other purposes.
General finance support may be required to set-up the operation and cover marketing and promotional expenses and to provide cash flow support through the initial phases until the business is operating to full capacity.
When sourcing finance as a self-employed operation, many will notice that they do not readily meet the criteria for business loans under the advertised guidelines by many banks and finance companies. Concerns may also exist around the possibility of being subject to higher interest rates based purely on being self-employed.
As a broker-style lender, Jade Finance provides a range of self-employed business finance options for both new and existing businesses for a range of purposes. Through our vast selection of lenders, we have the capability to source appropriate finance options and achieve affordable and realistic cheap interest rates for the self-employed. With the RBA raises interest rates, achieving the cheapest rate finance may be integral to the feasibility and viability of a new or small business.
Self-employed Finance Overview
The type of finance required by the self-employed will vary depending on whether the business is new, is existing and how long it has been trading for. New businesses may require Low Docs and No Doc finance considerations whereas those that have a long trading history and a good credit profile should be eligible for normal business finance.
Not all lenders offer finance to these types of operations as they have criteria around a minimum timeframe for the operation and minimum requirements around the financial documentation required to complete the finance application.
The No Doc and Low Docs options allows for both these issues and can be sourced through a selection of our more specialised non-bank lenders. Applicants will need to hold a current ABN and be able to present ID. If just setting up, getting an ABN should be one of the first steps.
Beyond these minimum requirements, lenders offering this type of finance will have their own individual requirements. Our consultants know exactly which lenders will suit which of our customers so we can save operators time and source appropriate quotes quickly.
One aspect that differentiates self-employed business finance from say companies applying for finance is in relation to the assessment of the credit rating. Most established companies will have a credit profile and a finance application will be assessed primarily if not solely on the credentials of the business.
With smaller self-employed businesses, the credit rating of the individual is typically considered as part of the application assessment procedure. With a new set-up, no financial records would have been accumulated so the lenders will look at the financial position of the business owner.
Ensuring the individual credit score is in the good range can be critical to being offered a cheaper interest rate and/or less conditions on the loan. Refer to Moneysmart for information on how this may be achieved.
Due to the small size of self-employed businesses, lenders may impose additional conditions on the loan.
Conditions for self-employed business finance may include:-
- Limits on the loan total approved. If hoping for finance to cover 100% of a purchase or purpose, it may be wise to allow for a deposit to be required to reduce the loan amount requested.
- Additional security as well as the asset being purchased required.
- Limits on the loan term – applicants may not be offered as long terms as they may prefer, this should be factored in when planning budgets.
- Where the finance is in the name of the business, the business owner may need to be guarantor for the loan.
The interest rate offered will be based on the assessment of the individual and the business plan. Higher rates do not necessarily always apply to self-employed businesses. Your Jade Finance consultant will be negotiating for the cheapest rates.
Finance Products Available
Jade Finance services are available to all types of business including the self-employed. Our full selection of business finance and commercial loans may be considered.
- For asset purchases – Chattel Mortgage, Leasing, Rent to Own and Commercial Hire Purchase.
- For non-asset purchases – Secured and Unsecured Business Loans.
- For cash-flow support – Business Overdrafts through either a bank or one of our non-bank lenders.
Using the services of a broker-style lender can result in significant benefits especially for the self-employed. You may be happy to proceed with working for yourself, but working by yourself in sourcing finance may not be the best option.
Contact Jade Finance 1300 000 008 to discuss self-employed business finance.
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.