People who work for companies get paid through paychecks. Each time they receive a paycheck, they also receive a pay stub. Their pay stubs prove that they work and have an income. Self-employed individuals do not receive pay stubs, though, making it hard for them to prove they have income. People in this position may qualify for loans if they seek bank statement loans. Here is an explanation of what these are and how they work.
What Bank Statements Show
A bank statement is a document that reflects the financial activity in the account for a one-month period. It shows every deposit the person makes and every withdrawal. As a result, bank statements reflect all the incoming money a person receives as well as the money they spend. When you view bank statements over time, such as a year, you can see a history of money coming and going for that period.
How Bank Statement Loans Work
If you have bank statements that show that you earn money from your business, you can use these to get the loan you need. To do so, you will need to gather the last 12 bank statements you have. Next, you must go to a bank that offers bank statement loans. They will ask you to fill out an application and to see your bank statements. If the bank can see that you earn steady money from your business, they will likely approve your loan request. They will likely base the loan amount on the average income you earn per month.
The Benefits of Bank Statement Loans
Getting a bank statement loan offers some benefits for self-employed people. The first benefit is that they offer a way to borrow money without proving your income through pay stubs. There are few loan options that let you prove your income without showing pay stubs. Secondly, you can apply for a loan whenever you need some money. If you build a good reputation with the lender by taking loans and repaying them, you might have access to these loans whenever you need some extra cash.
What to Do If You Are Self-Employed and Need a Loan
If you are self-employed and need to borrow money from time to time, you could consider applying for a bank statement loan. To do this, gather your bank statements from the past year, and find a lender that offers these loans.
For more information, contact a bank that offers Bank Statement Program Loans.