UK Self Employed Loan

If you are self employed then getting a loan can often be difficult, lenders will want to see 3 years accounts or more before comitting to lending to you.

To borrow money from a lender you have to prove that you are financially sound and will be able to keep up repayments. Being self employed or say working on a short term contract, makes this harder for you to prove. A mainstream lender will want to see at least 3 years audited accounts as proof that your business has done well over that time. If it has, you should be able to borrow money from most lenders. Lenders feel they are taking less risk with full time employed people. As lenders look at it, if you are self employed you have to chase things like payments and invoices, you could be working on a short term contract, if so what will happen when that runs out, will you succeed in getting a new contract. They need to believe that you will financially be able to make payments throughout the term of the loan.

Self employed loans are available from a wide variety of lenders and can be tailored to suit your individual financial circumstances. For example, if you have an adverse credit history or bad credit rating, such as mortgage arrears, ccj's, credit card problems or payment defaults, you can still apply for a self-employed loan.
If you do have 3 years worth of accounts to show a loan provider, your accountant is likely to have minimised the amount you declared as income, for tax purposes. It is ironic that having a good accountant can actually be your downfall in the loan market. By downplaying your profits it could turn out that when a lender looks at your accounts, their assessment of how much you can borrow is based on an income that doesn’t reflect your ability to pay but on the whole if you have certified accounts, you are more likely to get a self employed loan that offers similar rates and benefits to those you would enjoy if you were employed.
However there are more flexible lenders out there who understand that as a self employed borrower you will have good and bad times. You should not despair if you do not have accounts to show as proof of earnings, there is still another way you can get a loan, for exdample a Self Certification could be your answer.