The internet has introduced a new way of working in Australia and all over the world. It has cultivated a global market for all business-minded individuals to participate in. With this change in how Australians work, we are finding that more and more people are entering into the self employment sphere.
The advantages of self employment are endless! The dream of choosing your own hours and investing and watching your passion become a reality is magical, until you require a small personal loan.
Enter: a massive dumping of red tape. When applying for a small loan, traditional lenders, such as banks, require various supporting documents. Don’t fret, though. Being self employed doesn’t mean you cannot acquire a loan. In addition, there are other options when it comes to personal loans (Nifty *cough*). But, before we go into that, let’s delve into the world of the self employed and what to consider when it comes to self employment jobs.
So, what defines a self-employed Australian
Firstly, self-employed Australians are people who work for themselves, under their own account. They hold jobs where their income is dependent on the profit of a service or good they provide. Triumphs of the entrepreneurial types and business owners typically inspire us. However, when it comes to borrowing money, self-employed Australians face jumping through hoops set by traditional lenders, like big banks.
Get the stats! Facts surrounding self employment and loans
When Australians are turned down for a loan, 54% of them don’t know where to go next.
Currently, 2.4 million Australians are self employed, which equals about 17% of the workforce. With the help of stats, let’s understand the position of self-employed Australians.
26% of Aussies turned down by a bank are self-employed or work part-time
42% feel their main financial institution doesn’t understand their needs
2.4 million Australians are self-employed
There is clearly a gap between the needs of the client and the lender. It can be tricky tackling the difficult position of a self employed Australian. Particularly, when self employment jobs are being left behind financially by traditional lenders. So, when you consider the change from employment to self employment, think about whether you need to borrow funds initially to kick start your business.
Are you considering entering self employment? Here are some tricks to know beforehand
Taking the plunge and starting your own venture can be daunting. There a myriad of things to consider before stepping out into the world of self employment. So, here are is a list of handy questions to ask yourself before entering self employment:
Where will you work?Before taking the leap into self-employment, it’s important to consider where you will work. To figure out where to best situate your work environment, think about whether you want to work from home, to begin with, or rent an office space. How versatile is your business? Could you work from anywhere with just a phone and laptop? Meditate on where you want to start your business and how you want it to operate initially.
How will this impact my family and friends?Discuss your plans for self-employment with your family and talk about how it may impact their lives. Also, talk your plans through with a trusted friend, don’t be afraid to get some advice on your next big move.
What are the lifestyle impacts? Self employment can alter your lifestyle. Sometimes it’s hard to see it coming before it happens, so prepare your family and friends for a possible increase in workload. Think about how your business can help create the lifestyle you desire, then find a way to make it happen!
How should I protect myself against risk?Sometimes risks fail, and to protect yourself and your family, it’s best to have a backup plan, such as insurance.
How will you market your business?To truly stand out, in our world full of small businesses looking to strike gold, your marketing has to be on point! Therefore, when it comes to choosing the right marketing, you must consider your budget – what percentage you want to allocate to marketing. Also, consider whether to work with a marketing agency or hire your own in-house team.
Have you factored in the cost of taxes?Knowledge is power! So, gather all the insider intel you need on business taxes you’ll need to pay. Stay ahead of pesky expenses!
Do you know what laws apply to your business? Similar to taxes, before entering into a new industry, understand the laws relating to your new venture.
Does your business require extra funding?Enter: Nifty Loans! If your business needs an extra boost of funds, Nifty offers no paperwork personal loans up to $4,600. Unlike traditional lenders, we don’t require any additional information compared to regularly employed applicants. We only require that as a self-employed applicant, you are earning a regular wage!
Have you sorted out a bookkeeping and filing system? Devising a method for bookkeeping and filing is key to a successful and organised business. Starting a new venture can be confusing and time-consuming, so it’s best to set up a system where your files are easy to access when needed.
Finally, are you passionate about your possible business venture?Self employment can be thwarted with pitfalls and some hard times. If your idea is inspiring, however, and you love what you want to accomplish, then it makes all the sweat and tears worth it!
The need-to-know lowdown on personal loans for self-employed applicants
Have questions when it comes to personal loans and what they can do? Once again, don’t fret! We have you covered. Here is mini-guide to personal loans if you’re self-employed:
Types of personal loans:
Unsecured personal loans: Unsecured personal loans are small loans that are not ‘secured’ by equity, such as a bike, car or caravan.
Secured personal loans: A secured personal loan is a loan that is ‘secured’ by equity.
What to look for when you’re hunting for a personal loan:
Short loan term
Quality customer service
What do Nifty Loans offer for self employed personal loans:
No hidden fees!
Once up establishment fee
Choose your own loan term, from 12 to 24 months
Excellent online customer service
What are some uses for self employed personal loans: Quick cash loans can be used for practically anything from business to personal use. You can give your next car fund an extra boost, or upgrade your office equipment. Here are some reasons that inspire applicants to take out a personal loan:
Upgrading office equipment
Investing in some new software for your business, like productivity or accounts software
Have a wedding on the horizon? Try a personal loan to pay for your dream wedding venue or a trendy photographer to capture every moment
Invest in a brand new car to match your new company
Adding some chic interior decor to your home
Updating the bathroom or kitchen
Your reason not on this list? No worries, the benefit of self employment personal loans is that they are flexible and you can apply them to any situation!
Commercial banks and personal loans
Big banks create hoops for self employed applicants to jump through, no matter how much you are earning. When applying for loans with traditional lenders, you’ve got to make sure you know the in’s and out’s of all your numbers. And prepare to run through a mass load of old paperwork!
What do you need to apply (documents may vary depending which lender you are with):
Gather the last two years of (personal and business) tax returns. The most recent years cannot be older than 18 months. ATO notice of assessment (for the most recent year) or ATO lodgement notification. Banks require your tax returns to prove any income that you declare on your application
Financial statements: Includes documents like your profit/loss statements to support the income you have declared on your loan application
Proof of rental income (if applicant): If you own any rental properties, you must declare them by submitting support real estate statements
Notice of Assessment (NOA): When applying for a loan, you must submit your latest NOA issued to you by the Australian Taxation Office (ATO). An NOA document details tax information like the amount of income tax you owe. Some lenders require NOA statements from the last two years.
Recent bank statements: Submit bank statements showing your savings and business transactions.
Company-specific information: Must submit business information such as ABN and address
Self employed job and struggling to get a personal loan? You’re not alone
At this point you may be thinking, “Why should my loan application be so complicated, if I own a successful small business, with a regular, comfortable income?” It’s a valid question, and one that self employed Australians ask often and are left wondering.
If you are left unsure, here are some reasons you may be rejected:
Newly entered self employment
Fail to provide required documentation
Tax returns not complete
The Nifty difference
With Nifty loans, you can forget digging through mountains of paperwork and endure endless photocopying. Nifty doesn’t treat employed, or self employment applicants differently. We don’t punish self employment with hefty paperwork. We simply require our applicants to be receiving a regular income into a personal bank account for at least 3 months. That’s it!
Forget gathering all your financial records, all we want to know is if you’re receiving a regular income to meet repayments.
A bit about Nifty’s same day approval loans
What you need to apply:
Must be at least 18 years of age
An Australian citizen or permanent resident
You’ve been receiving regular income into a bank account for at least 3 months
Have an active contact number
And that’s it! There is no endless list of forms to complete, accompanied by mountainous paperwork. We believe in a simple, painless small loan experience. And that’s the Nifty difference when it comes to self employment applicants.
Navigating the course of self employment can be tricky, especially with traditional lenders making it tricky to borrow small loans. Always remember there is always another way when it comes to financing, you just have to search for it!
Since founding Nifty in 2016, Bell has continued to make waves within the local financial sector for his continued ambition and willingness to adopt emerging technologies.
* Not applicable. Small loans do not charge an annual interest rate.
** WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Different loans may include other payable fees and charges. All fees and charges will always be displayed on your loan contract.
WARNING: Do you really need a loan today?*
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and Independent financial counsellor.
Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan.