(PRWEB) April 29, 2012
Before the 2008 crisis banks were giving out money like candy. The banks thought the country was on an upward spiral and were only using personal and business credit to approve loans at nightmarish proportions. The economic crisis started and banking changed forever. It was impossible to get a self employed unsecured loan for most business owners.
The accountant and the underwriter are on opposite ends when it comes to lending money. The accountant writes everything off and the underwriter wants to see the highest adjusted income. A business owner who makes $200,000 but writes off $190,000 wont be able to qualify for a loan based on a $10,000 a year income. This is the bad part when it comes to loaning the self employed money. This is called the self employed cash flow problem.
The solution is to find the proper unsecured personal loan or unsecured business loan. Niche banks have programs where they don’t worry about the cash flow. These banks are only interested in the gross sales of the business and the industry. They are going to ask to sign a personal financial statement without financials (no doc/light doc). This will keep income numbers high without getting into the specific write-offs used by business owners. The higher the income, the higher the loan size. By going this route rates, terms, and conditions of the loan will be cheaper then alternative loan products such as factoring, private investors, and the worst one of all credit card cash advances.