Running your own business can be very rewarding but you are going to face obstacles on a daily basis. A common obstacle that all self-employed Canadians like you will face is being able to access credit.
Interest rates have been at historic lows but when you want to access any type of financing for your business to get a self employed car loan in Grimsby, you are met with resistance every step of the way, as our auto loans team explains.
Lenders don’t understand the modern gig economy
Even though the majority of lenders have websites and use software to process applications, on the backend they still operate as banks did 100 years ago.
When trying to get a self employed car loan in Grimsby, you need to have a solid credit rating and stable income, essentially you almost have to appear you don’t need the money to get approved.
In the past, when a bank would apply for a loan application, they look at your credit score and salary, crunch some numbers, and either approve or reject the loan.
Canadians for the most part are migrating away from the career of working with the same employer for their entire working life.
Freelancing and working more than one part-time job has become the new normal for many, but lenders have not been able to adapt.
Documents Needed to get a Self Employed Car loan in Grimsby
Lenders want to know whether your business is generating positive cash flow. Most businesses do not make it past the 2-year mark, so lenders will ask for your tax assessments for the last 2 years.
The problem is that most self-employed Canadians implement aggressive tax strategies that help them reduce the total amount of taxes they owe.
This is great when you want to reduce your tax liabilities, but it can make it hard for lenders to calculate how much money is available for the car loan.
A simple way to address that concern is to provide bank statements for the last couple of years, if your income is substantial and stable, then you should be able to qualify for the loan.
Importance of having good credit
Having great income will help you get a car loan, but your credit score must be high enough to qualify as a prime applicant. Subprime car loans for self-employed Canadians are not common, so try to raise your credit score by paying your bills on time, all the time.
Accessing the best source of self-employed car loans
Since banks and traditional financial institutions cannot meet your needs, you must go to an organization that is going to help you get a competitive car loan.
Head over to your local car dealership, they will be able to provide you with access to the best self-employed car loans, and can also let you test drive cars while waiting for your loan to be approved.
These local car dealerships know how to structure the self-employed car loan, so your payments are affordable. If you are self-employed and serious about getting a new car, then your first stop is your local car dealership.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!