The self-employed belong to the risk group and are often viewed critically by the banks because of their fluctuating income. As borrowers, the self-employed and freelancers as well as start-ups are often sorted out or you only have unfavorable terms and conditions with larger interest rates on offer. As a rule, the material situation and income situation of the applicant are strictly checked before approval, as there is often a risk of bankruptcy or other economic problems in one’s own company. In an independent professional life, you take out loans for various purposes – be it expansion or restoration of your own company or private purposes such as buying a car or building finance. However, the self-employed do not have an employment contract and often cannot submit proof of income, which is necessary for a normal installment loan. Although it is difficult to convince a bank with such a loan request, it does not mean that it is impossible to get a loan.

Your credit score

Your credit score

With good credit bureau information without negative entries and a sufficient credit score, every company can count on the approval of a loan. However, since the self-employed and freelancers often have no collateral such as regular income or other assets, they must apply for a loan without collateral from a bank. The first step is to create a convincing concept that details the bank  shows which investment you want to make with the money and how worthwhile it is.

Furthermore, self-employed and start-ups have better chances to get a loan if their own company is already established. If a company is operated by a self-employed person for more than 3 years, the company is considered to be established. After this time, a company usually shows itself to be stable and already has a firm foothold. It goes without saying that the older and more renowned a company is, the less collateral the bank needs.

Rejected loans

Rejected loans

Even if a bank has rejected your loan request, you definitely have to try other banks. Because if a business concept was not convincing enough for a bank, other banks will find it feasible. As a business founder, it is worth applying for a loan from, for example, Dundes Bank or Astro Finance, as these banks also grant loans to customers who have only been self-employed for 1 year. With other banks, such as Westdeutsche Immobilienbank, you do not have to prove your income as a self-employed person under certain conditions.

A loan for self-employment can alternatively not be granted by the credit institutions, but by private investors, which can be found on the brokerage platforms. A transparent and coherent presentation of the project to be funded provides better prospects for lending from private investors. The platforms check the creditworthiness of the self-employed and classify the potential borrower according to a rating. This rating then sets the interest rate to be paid and notifies the lender of the risk of default. It should be noted that business and car loans have more chances of success here than loans for private purposes, since they are more financially profitable.

Another option for borrowing would be for a relative or friend to take out a loan himself and pass it on to the self-employed on the same contractual terms, which in turn is contractually secured. In this case, the only hope is that the friendly relationship will not be burdened with possible difficulties.

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