Running a business is associated with great satisfaction and freedom of action. However, it also means a lot of difficulties that we won’t face full time. There are also many costs and there is often a time when there is a shortage of money for permanent commitments or investments. Then the thought of credit begins to sprout in my head.
The organization of work and formalities in a one-man company look slightly different than in companies with more employees and in companies. In the case of loans and advances, not everything looks the same. Let’s check how you can take out a loan for a one-man company.
How do you get a loan for a one-person company?
When applying for money, we have different options depending on whether we want to apply for a loan as a natural person, ie the owner of the company, or a company. This is due to the fact that with sole proprietorship, the owner bears all responsibility for the company. This means that from a legal perspective, whether we have or our company has arrears in payments, we will still have to bear responsibility.
Credit capacity of a sole proprietor
It does not matter whether we will try as a natural person or a company, banks will thoroughly examine our financial situation. All banks must work in accordance with the Banking Law, and this requires that the client be creditworthy. This means that we will be able to pay our liabilities on time. First of all, the bank will check our credit history and whether we are in arrears with payment of installments, contributions, taxes and other obligations. But even when it seems that the situation in BIK looks fine, not every company can get a loan.
The bad news is that the requirements for people who run a business are stricter. It cannot be denied that those who provide employment certificates have much more opportunities in this area.
A loan for a one-person company is not easily available as it seems at first glance. To calculate income, we deduct costs from income. Often it is these values that are given when applying for a loan. Meanwhile, banks deduct taxes and contributions from us. Ultimately, it may turn out that despite the fact that we have backlog anywhere and we are on time, we have no creditworthiness.
Where else can we encounter obstacles?
Creditworthiness is not the only difficulty we can face. Always employed full-time is considered more reliable and solvent. Employee remuneration is considered permanent, while the company’s income is variable, so it is associated with uncertainty. Companies that are young have the most difficult situation. Almost every bank will reject the application of a person whose company has been on the market for less than 12 months. In some cases, up to 24 months of activity is required. If we managed to suspend operations at that time, the bank will count the period of presence on the market from the date of resumption of operations. The industry in which we operate also has an impact on whether a loan will be granted to a sole proprietor. Banks are analyzing whether our industry is considered risky or stable.
Among the formal requirements that we must meet is to provide many documents. One of the most important are certificates of non-arrears in ZUS and US. Regardless of the company’s income, these are fixed monthly costs whose deadlines we have to watch very carefully. If we have any arrears in the offices, the bank will clear us away. In addition, you may need to show account statements, depreciation tables, etc. All these formalities take a lot of time. If we hope that we will go to the bank, present all the date and get the money straight away, we are wrong. The analysis of our situation will last. For comparison, a person who is employed under an employment contract can get a decision even in a few days, and with a company this process takes up to several days.
And if not at the bank, where?
Looking at the above, it is not difficult to conclude that a loan for a one-person company in most cases is either difficult to obtain or even impossible to obtain. Meanwhile, sometimes money is needed, and quickly. Realizing that one will not look favorably upon us in the bank, or we are already after a negative decision, it is worth considering cooperation with non-bank financial companies. They are much more flexible because they are not bound by the Banking Law and the Civil Code.
We do not have to face so many formalities, and the verification process is much shorter than at the bank. However, you have to remember that loan companies are very different and the fact that they have a lot of freedom is good and bad. They can set their own rules, some of which will be beneficial for us, others not necessarily. Therefore, before we sign the contract, we should take a good look at the conditions and consider whether this is what we need.