Difficulties for Self-Employed Persons Regarding Granting of Loans in the Latest Edition of Finanztest

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For many people self-employment is a dream which often fails because of lacking financial means.

A business start-up frequently goes along with a lot of barriers one has to overcome. The greatest barrier is probably the capital contribution for the act of founding a company. So what to do when it is not possible to raise money for property or machines?

This question is argued in the current edition of "Finanztest". Actually it is very difficult to get at liquid funds as banks take a closer look on self-employed persons as on permanent employees. Since self-employed persons have fluctuating incomes they constitute a high risk for the loss of repayments. However there are differences concerning the granting of loans. Freelancers for example are more welcome than industrialists. Persons who are in the start-up phase have nearly no chance to get a loan. Banks want to see a two-year evidence of successful self-employment.

Regarding loans for real estate though, some financial institutions have brought themselves to grant property credits for newcomers, for instance the "Deutsche Bank" or the "Frankfurter Sparkasse". In this connection a property credit can be granted after only one year of self-employment provided that positive circumstances are given. Often it is advisable to take a look at regional providers. Here Finanztest mentions "MKiB" and "Baufi". These providers mostly collaborate with many banks and are able to find a suitable loan in their portfolio in most instances.

In search of a loan one has to be careful regarding the flexibility, the amount and the interest rate of the loan. It is possible that a provider grants a loan despite negative liquidity which then displays a very high interest rate. The best option would be to begin with a small loan as a small amount can be covered with a minor liquidity so that the banks also can offer a better rate of interest. If the business runs successfully it is possible to get another loan with better terms.

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Paul Buchhorn
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