Personal Loans

Secured Loans

Other Loan Types

Residential Mortgages

Buy to Let Mortgages

Other Mortgage Types

Mortgage Payment Protection

Life Insurance

Other Finance

Options for Self Employed

If you are an individual who runs his/her own business/company and is the only employee within that company you are by definition, self-employed. One of the main areas that separates you from those who are employed by a business is your proof of income.

Depending on how long you have been self-employed you may have accounts produced by an independent accountant, or if you have only been self-employed for a short space of time, you may not be able to produce any accounts. Another factor, which will affect your loan rate, will be whether or not you choose to apply for a secured or unsecured loan.

Self-employed loans had a reputation for being expensive and difficult to find, but with the Internet, and millions of people becoming self-employed, lenders have begun to offer many more competitive rates and loans. Self-certification is a way of proving your incoming to a lender without having to prove the figures. The lender will not ask to see audited accounts.

Self-certification works on the basis of trust, but usually the lenders will still require some sort of verification. This can take the form of an accountants certificate, which is a document signed by your accountant that confirms your income is sufficient enough to pay back the loan. Another form of verification is your business bank statement. This will prove your monthly income and expenses. However this may not be enough for certain, if not all, lenders. If you own your own property you will be asked to provide your current mortgage repayment documents, if you are renting, the lending company will ask for a reference from your current and perhaps previous landlords, depending on the length of the tenancy.

If you have been self employed for longer than three years the best way to apply for a self-employed loan is to get your accountant to submit up to three years of audited accounts. These will prove that you can pay back the loan. If you have self-employed for less than three years you may encounter some problems if you wish to acquire a loan for an extremely large sum of money, or if your accounts have shown a loss over the last three years lenders could refuse you the loan. Typically a lender will look at the average earnings over the three years not just the highest income during a particular year.

Whichever method of proving your income, a credit check will be carried out using a credit check agency, so you should be aware that it is not only your current ability to meet repayments that are considered, but also your history concerned with repaying previous loans.