personal loans for the self employed

pearls_of_wisdom

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hi, would like to hear from anyone who is self employed and in
recent times obtained a personal loan for personal use
with particular attention to the following questions,

1.did you obtain personal loan from your own main bank or
forced to look elsewhere ?

2.what additional paperwork was normally required by lender
to support application i.e relating to being self employed ?

3.can anyone advise me on good lenders who specialise in
loans for the self employed other than the main big high
street banks ?

many thanks any input would be appreciated:T

jonesMUFCforever

Your own bank will know how you run your accounts and IMO should be your first port of call.

_Andy_

An important fact to know is, how long have you been self employed and what proof of income do you have? Impossible to answer your question without knowing this

pearls_of_wisdom

_Andy_ wrote: »

An important fact to know is, how long have you been self employed and what proof of income do you have? Impossible to answer your question without knowing this

thanks for response mufc and andy, been self employed 2 years but i only have personal account with my main bank(NO BUSINESS ACCOUNT) and been paying set amount via cash deposit same time each month visited branch this afternoon told me they would require some confirmation via HMRC to overcome this particular point many thanks for your time

jonesMUFCforever

I can't believe that HMRC will give information to your bank willy nilly - they should be able to see that you pay your NI by d/d which should give them a clue!
(You do pay NI and by d/d?)

chalkie99

A lender would require to see pay slips to prove employment and, as you are self employed you can't supply those so they will want to see where the money is coming from.

You say you don't have a business account? How can you pay a fixed amount into your personal account each month and how is it in cash? This must look very dodgy to the bank.

On your other point - not sure how relevant it is but a friend wanted to buy new business equipment a month ago and was turned down flat for a business loan. The same bank immediately offered him a personal loan though which he took and bought the business equipment with. Go figure!

pearls_of_wisdom

chalkie99 wrote: »

A lender would require to see pay slips to prove employment and, as you are self employed you can't supply those so they will want to see where the money is coming from.

You say you don't have a business account? How can you pay a fixed amount into your personal account each month and how is it in cash? This must look very dodgy to the bank.

On your other point - not sure how relevant it is but a friend wanted to buy new business equipment a month ago and was turned down flat for a business loan. The same bank immediately offered him a personal loan though which he took and bought the business equipment with. Go figure!

interesting MUFC pay ni via cheque never thought to pay via d.d, CHALKIE thanks for reply as you say my depositing cash is not enough to prove income,hence i have 2 choices provide some evidence via hmrc or set up business account to seperate personal and work expenses a little more many thanks

jonesMUFCforever

Paying in the same amount every month might look suspicious as businesses will have ebbs and flows in cashflow. How do you explain this?
Have you any savings at all - can you show that you can afford any repayments?

pearls_of_wisdom

jonesMUFCforever wrote: »

Paying in the same amount every month might look suspicious as businesses will have ebbs and flows in cashflow. How do you explain this?
Have you any savings at all - can you show that you can afford any repayments?

many thanks MUFC superb point you make above i.e suspicious i'd never thought of it like that there are other numerous cash deposits during a normal month i just thought one identical amount at same point would be fair indicator of earnings, i suppose i go back to the point i mentioned in post 7 the underlying problem is i haven't seperated my personal/work expenses just always used main personal account which on a day to day basis has been fine. In addition i suppose if i open a business account alongside personal account ultimately the bank will see same transactions but just spread over 2 accounts do you think MUFC this will make a difference to bank saying yes we can see where you're income is coming from because the one thing i can't alter is that my employment generates a lot of cash :T many thanks for your time + yes always have a balance of few thousand floating in account

Willow_K

You really should have a separate business bank account - using a personal account can get messy at best and at worst looks extremely dodgy. It also leaves you open to accusations of money laundering from HMRC if you were to get a tax inspection. You may find it difficult to prove that any personal cash payments are not cash in hand jobs you are trying to hide from the tax man.

Also, your bank may get annoyed and close down your account if they find out you are using it for business purposes - most personal accounts have a clause that say they shouldn't be used for business banking. This is because business bank accounts typically have charges associated with them that personal bank accounts don't. However, most business bank accounts have an 12 - 18 month period where there are no charges, so you can get around this by switching accounts.

As well as being cleaner, the other benefit of having a separate business account, is it will make it easier for you to get finance should your business do well. Depending on the account you can also often get access to a number of free benefits such as a business advisor etc.

The bank will also be able to see how much drawings you are taking every month if it is being moved between the two accounts - it allows them to see a clearer separation between business expenses, household expenses and income.

pearls_of_wisdom

Willow_K wrote: »

You really should have a separate business bank account - using a personal account can get messy at best and at worst looks extremely dodgy. It also leaves you open to accusations of money laundering from HMRC if you were to get a tax inspection. You may find it difficult to prove that any personal cash payments are not cash in hand jobs you are trying to hide from the tax man.

Also, your bank may get annoyed and close down your account if they find out you are using it for business purposes - most personal accounts have a clause that say they shouldn't be used for business banking. This is because business bank accounts typically have charges associated with them that personal bank accounts don't. However, most business bank accounts have an 12 - 18 month period where there are no charges, so you can get around this by switching accounts.

As well as being cleaner, the other benefit of having a separate business account, is it will make it easier for you to get finance should your business do well. Depending on the account you can also often get access to a number of free benefits such as a business advisor etc.

The bank will also be able to see how much drawings you are taking every month if it is being moved between the two accounts - it allows them to see a clearer separation between business expenses, household expenses and income.

many thanks for excellent reply WILLOW you're clearly very much in tune with how this works in much finer detail than myself,just to take your final paragragh do you think it will be good enough to pay cash/income into new business account and then that gets transferred to personal account as wages or do you think that will not solve issue of proving earnings and of course secondly ensuring accounts are used for correct expenditure many thanks:T