Applying For A Self-Employed Business Loan: Things To Know

small business loans

A business loan can help provide a much-needed cash injection to push ahead a stalled project or fund an expansion. Whether you’re already well established or just a fledging startup, there are various financing options for your business.

It can be tempting to rush out and grab a new loan, but before seeking ANY type of loan, there are some essential factors you need to consider, which we outline below.

As well as understanding the different loan types and you chosen loan’s requirements you need a properly laid out plan to determine how you’ll use the money as well as a budget on how you’ll repay it.

You also need to understand whether the loan program is the right way to serve your financial needs. Carefully reviewing the various loan offers can help you save money and avoid potential roadblocks that could affect your business’s future.

Keep reading to learn more about business loans if you’re self-employed

small business loans

#1 – Loan Type

Before choosing any business loan, knowing how to choose a loan for your needs is crucial. Generally, the most popular funding options are as follows:

Traditional loans: These typically come with set terms and amounts which differ depending on the lender. These loans have strict eligibility criteria, and their approval can take several weeks.

Lines of credit loan: This refers to an arrangement between a lender and a borrower that establishes the maximum amount a person can borrow. With this, you’ll have to set an amount you can borrow against and comfortably repay as required. This type of loan can take a couple of days to several weeks for approval.

Equipment financing: This is ideal if you’re looking for a loan to finance equipment purchases. Australian lenders offer affordable business loans for self employed Aussies to help with equipment financing.

Small Business Administration (SBA) loans: They generally have reasonable rates and repayment terms. These loans are ideal for individuals who can’t qualify for traditional bank loans. The catch: their approval process might take weeks or months.

When looking for a self-employed business loan, researching and weighing the pros and cons of all your financing options is needed. You want to get the most appropriate financing option for your business and not make any hasty decisions that might hurt your business down the track.

#2 – Lender’s Reputation

Every business lender has their specific terms. Some lenders might have offers that seem reasonable but they turn out to be quite risky. Below are some red flags you need to look out for before applying for a self-employed business loan:

  • The lender lacks a minimum credit score requirement or doesn’t require checking your credit score
  • The lender doesn’t have a physical address or a professional website
  • Their sales representative is pressuring you to accept their deals immediately
  • They hide their loan fees, making it unclear how their financing might cost your business; and many more.

Therefore, you should always research the lenders’ websites and read their reviews before signing on the dotted line.

#3 – Collateral Requirements

Some lenders offer secured loans, meaning you have to back the loan with collateral. This mean, if you default on the loan, the lender would have to seize your collateral as repayment.

If the loan you’re applying for requires you to secure it with collateral, consider if you’re ready to risk your assets. If not, your best funding option would be getting an unsecured loan instead.

#4 – Repayment Terms

It might sound simple, but you also need to consider whether you can comfortably pay the loan back according to the repayment terms.

If the monthly payments are more than you can afford or you feel like you might miss some payment deadlines, it’d be wise to look for a more affordable business loan. Applying for a loan you can afford to repay is an essential tip for securing a loan safely.

#5 – Payment Process

Understanding your lender’s payment process is also key. Are the repayments weekly, bi-monthly, or monthly? Further, you need to know how you will make the loan repayments. For example, if the lender requires you to make automatic withdrawals will you be able to commit to it? If not, it’d be wise to get another loan offer.

#6 – Borrowing Amount

Lenders can sometimes offer amounts that won’t cover your funding needs fully. On the other hand, it can be tempting to take more money than you really need.

Making a plan about how you intend to use the loan will help you decide whether the loan you apply for is enough, too much, or too little. If your loan offer isn’t enough to help you achieve your goals or makes you overextend, then find an alternative lender.

Takeaway

Some loan offers might seem appealing but, truth be told, they benefit the lender more. When looking for a self-employed business loan, only commit to one that closely meets your financial needs and contributes positively to your business’s future.

MORE –

MORE –

56 Comments

  • Reply dj23249 Friday 28th June, 2013 at 5:51 am

    I love that yellow dress, so sexy

  • Reply godsaur Thursday 8th November, 2012 at 11:38 am

    love

  • Fashionista8P
    Reply Fashionista8P Tuesday 6th November, 2012 at 7:35 pm

    awesome colour on her!

  • lanalang
    Reply lanalang Sunday 21st October, 2012 at 12:07 am

    Love it! Gorgeous!

  • Reply cindyhu_1234 Sunday 20th May, 2012 at 7:50 pm

    That dress is amazing. Love the colour yellow!

  • karan2386
    Reply karan2386 Monday 7th May, 2012 at 7:46 am

    Great outfit.. The mustard suits her perfectly πŸ™‚

  • Reply mandystsai Sunday 6th May, 2012 at 10:03 pm

    Gorgeous.

  • Reply ladadidah Sunday 4th March, 2012 at 11:12 pm

    love this! lovely colour

  • Reply dapperdolly Monday 20th February, 2012 at 8:17 am

    Love the colour – very bright and happy.

  • Reply sass Thursday 24th November, 2011 at 1:30 pm

    A-MAZE-ING

  • leilani-lovebird
    Reply leilani-lovebird Tuesday 22nd November, 2011 at 1:23 pm

    great colour…

  • violetflower61230
    Reply violetflower61230 Monday 21st November, 2011 at 10:04 am

    very pretty!

  • Reply Tashie Monday 21st November, 2011 at 9:39 am

    Love the dress, not the shoes so much though

  • missbonnieblu
    Reply missbonnieblu Monday 21st November, 2011 at 9:34 am

    Great colour, love it when people rock this colour and it looks good. πŸ˜€

  • Reply lovelyloves Monday 21st November, 2011 at 8:51 am

    Canary! pretty colour

  • Reply stefaneigh Monday 21st November, 2011 at 7:53 am

    love the colour

  • Reply tessarella Monday 21st November, 2011 at 7:29 am

    That dress looks amazing on her

  • Reply thugsy Monday 21st November, 2011 at 7:10 am

    stylish

  • Reply doogs Monday 21st November, 2011 at 7:06 am

    Work it, girl!

  • Reply jarjar Monday 21st November, 2011 at 6:58 am

    I love the colour

  • Reply chrystal Monday 21st November, 2011 at 6:26 am

    I’ve new been a fan of mustard but it looks well on her

  • sbooth29
    Reply sbooth29 Monday 21st November, 2011 at 5:41 am

    stunning in yellow!

  • Reply saymx Monday 21st November, 2011 at 12:06 am

    pretty good

  • Fashionis_blows
    Reply Fashionis_blows Sunday 20th November, 2011 at 7:51 pm

    Fabulous colour on her.

  • Reply kirstar14287 Sunday 20th November, 2011 at 7:32 pm

    I love the colour!

  • Reply Whatthe Sunday 20th November, 2011 at 7:25 pm

    It suits her skin colour.

  • Reply blackcab Sunday 20th November, 2011 at 7:15 pm

    best colour

  • Reply BellaB Sunday 20th November, 2011 at 7:14 pm

    Not many people could wear this color, but she looks good in it.

  • Reply mummo13 Sunday 20th November, 2011 at 7:06 pm

    love the colour and style of this dress, very chic.

  • Reply maydaymaydayy Sunday 20th November, 2011 at 7:01 pm

    Hot! Love the color!

  • citystyle93
    Reply citystyle93 Sunday 20th November, 2011 at 6:46 pm

    the color looks amazing on her

  • Myra
    Reply myra00 Sunday 20th November, 2011 at 6:34 pm

    She can wear yellow! I wish she had her hair up though!

  • maryanacole
    Reply maryanacole Sunday 20th November, 2011 at 6:16 pm

    very bright, but cute

  • eleanore
    Reply eleanore Sunday 20th November, 2011 at 5:25 pm

    cute

  • Reply kimberlay Sunday 20th November, 2011 at 4:49 pm

    Love it!

  • Reply vonisntflexi Sunday 20th November, 2011 at 4:48 pm

    simple but looks good on her!

  • Reply MsKimo Sunday 20th November, 2011 at 4:45 pm

    Another yellow dress, love it! She looks great.

  • Reply Serena86 Sunday 20th November, 2011 at 4:37 pm

    Stunning!

  • Reply sallync Sunday 20th November, 2011 at 4:19 pm

    She looks fantastic.

  • Reply bluebird93 Sunday 20th November, 2011 at 3:39 pm

    looks nice.

  • Reply Danielle Sunday 20th November, 2011 at 3:13 pm

    Great colour on her!

  • Reply audrey89 Sunday 20th November, 2011 at 2:57 pm

    Love!

  • sommy7
    Reply sommy7 Sunday 20th November, 2011 at 2:28 pm

    Adore this colour-simple sleek look

  • hausoftina
    Reply hausoftina Sunday 20th November, 2011 at 2:22 pm

    I think that this is a super pretty outfit! The yellow looks great on her!

  • Reply slamontheWWW Sunday 20th November, 2011 at 2:08 pm

    classy and elegant, I like.

  • Reply mzluvinkhim Sunday 20th November, 2011 at 1:44 pm

    she looks amazing in this dress. not sure i could pull off that colour but.

  • Reply AmberB Sunday 20th November, 2011 at 1:40 pm

    Gorgeous πŸ™‚

  • Reply juliew Sunday 20th November, 2011 at 1:37 pm

    Yes, I like this

  • Reply daysofourlives123 Sunday 20th November, 2011 at 12:57 pm

    oh, what a pretty yellow. SO nice.

  • aimzybabe
    Reply aimzybabe Sunday 20th November, 2011 at 12:39 pm

    Ooh… steamy! But I must say no to the makeup.. euhgh!

  • Reply dancenow13 Sunday 20th November, 2011 at 12:35 pm

    Love the dress! Gorgeous colour.

  • Gjenia
    Reply Gjenia Sunday 20th November, 2011 at 12:34 pm

    She has talent; being able to rock a yellow dress is not something everyone can do. So lets give Zoe an applause.

  • Reply livi Sunday 20th November, 2011 at 12:28 pm

    Beautfiul,very elegant πŸ™‚

  • comebacks
    Reply comebacks Sunday 20th November, 2011 at 12:28 pm

    I love this simple number. But I think the hair looks a little plain and flat. Other than that, she’s done well!

  • Reply armstrong Sunday 20th November, 2011 at 12:09 pm

    I love this dress. I don’t think I could wear the colour but she looks fab

  • Reply fifi73 Sunday 20th November, 2011 at 11:28 am

    Very simple, but very elegant… πŸ˜‰

  • Leave a Reply

    Your email address will not be published.