Articles -> Self Employed Options

There are currently many more people in self-employment than there has been at any time in the past in the UK. This rise in popularity is good news for those who are self-employed, as it means that the market is growing, which is making more and more financial products open to those in these circumstances.

Not so many years ago it could be very difficult for someone without regular employment to get approved for a loan or a mortgage. The main concern of any lender is that the person they are lending the money to will be in a position to repay them, the easiest way for them to determine this is to see proof of employment and to know the person’s salary. People who are self-employed cannot provide such proof, and as such lenders were not keen to approve them for the loans they wanted.

With the rising number of self-employed people comes a rise in the demand for loans and mortgages for them, and so there are now a number of lenders who offer a range of products aimed at those who cannot prove their income in the traditional way.

Today there are two main ways in which to apply for a self-employed loan or mortgage, the first is the preferred method of most lenders and requires that the potential borrower provide one to three years worth of audited accounts to prove their income potential. The amount of accounts required will vary depending on the lender and the circumstances, if you are able to provide the necessary accounts then you shouldn’t have much trouble in getting approval, and the interest rates should be competitive with standard loans.

If you do not have enough accounting history, or are otherwise unable to provide the audited accounts required then the other option is to self-certificate. This route is generally only available to those seeking a mortgage as the lender will have the value of the property as security, which is necessary as they have to put trust in the earnings figures supplied by the borrower.