Self Employed Personal Loan

missamerica87

Hi Guys,
I'm a newbie and I wanted some advice please

I am self employed and I wanted to get a small natwest personal loan to consolidate some debt and fix my car etc. I applied online, and they sent me the paperwork to sign and send back.. which I did.

Then I get told to call them and apparently they need a SA302 form (not sure why they didn't request it when they sent me the paperwork?). So I'm trying to get in touch with my accountant for her to get one for me over the last 2 years.

Now... I had a business turn over over the past couple years of 14,000 and 12,000 and I am the sole trader. So that money comes to the bank account of the same bank I am applying for this loan. However, I am lucky in the sense that I have had a lot of expenses to write off over the last 2 years because I travel a lot for my business so my expenses have offset my business turnover so much that I come just under the threshold of the tax bracket. I still file every year, and I have an accountant who sorts all that out.

Is this going to affect my chances of getting this loan? Surely because my business is bringing in a lot of money and that is my income that comes into my account they will look at that right?

I am so confused and brand new to all of this, any help would be great. I tried to ask the guy on the phone of the lending department but I don't think he understood.

Thanks so much

HappyMJ

The SA302 shows your profit and you have admitted it's low so your personal loan affordability will be based on that figure. With that figure can you afford your rent/mortgage, gas/electric, water, council tax, tv licence and food and still have enough spare money to pay the loan repayments? You can exclude your travel costs if the business pays them. If you can afford all those things then the loan may be approved.

missamerica87

Thanks HappyMJ,

Yes I am in a situation where my outgoings are very very low so I can definitely afford the repayments.

I was told it was good to have a lot of things to write off, it's such a shame that it's going to count against me here.

HappyMJ

missamerica87 wrote: »

Thanks HappyMJ,

Yes I am in a situation where my outgoings are very very low so I can definitely afford the repayments.

I was told it was good to have a lot of things to write off, it's such a shame that it's going to count against me here.

Be prepared to prove your very very low outgoing figures. Banks will use average figures if yours are far too low. Generally they won't allow the figures to go less than the JSA rate which is currently £71.70 a week for a single person...plus rent, council tax, any travel to work expenses, any existing loan repayments, any child support payments and any other regular outgoings.

chalkie99

missamerica87 wrote: »

my business is bringing in a lot of money

It isn't!

You are earning less than the tax threshold, already have debts and need to borrow more to fix your car.

You need to take a cold, hard look at why you have a business when you would actually be better off sitting on a supermarket till.

Don't continue with the mistakes of thinking that your turnover is your income or even that £12k to £15k is a lot of money.

Sorry to be harsh but the bank understand this better than you.

missamerica87

...Wow.

At least HappyMJ gave me some constructive advice and helped me understand.

LMck111

I remember when someone said that to me!
Losing money hand over fist - struggling to make ends meet.
You'd be better off working in McDonald's - They said.
(An institutionalised 9 - 5 er)

3 years later, 5 bedroom house & most of what I need is at grasp - My company turns 300 - 400k a year.
Don't listen to others opinions. Keeping yourself afloat is just the start of the journey - small turnover or monster losses - have a plan & stick with it.
The plan is very important.

Where you are now & Where you want to be next year.
It has to be realistic & grow with it.

A small loan is sometimes the way to prove your a good bet for the future.

missamerica87

Thank you for your encouragement LMck111

19lottie82

missamerica87 wrote: »

...Wow.

At least HappyMJ gave me some constructive advice and helped me understand.

Sigh....... Another newbie who gets upset when they don't like what they hear.

OP, you are not making a "living wage" from your business, even before you have covered your business outgoings. And you are already in debt.

If the bank rejects you then it is because you are a risk because your income is simply not high enough.