Good Financing for the Self-Employed

Good Financing for the Self-Employed

Today, many Canadians make their living through being self-employed. This includes contract employees, sub-contractors, sole proprietorships, and those who run limited or incorporated companies.

Here are some interesting statistics about self-employed people in Canada & Alberta:

  • In Canada, a little over 2.7 million people were self-employed in 2009
  • Self-employed people account for 16% of employed Canadians (2009)
  • Approximately 18% of all Alberta workers were self-employed in 2009
  • Alberta ranked third of all provinces in terms of the number of self-employed as a percent of total employment (2009)
  • In 2008, women accounted for 34.5% of all self-employed individuals in Alberta
  • 15.4% of Calgary’s work force in 2009 were self-employed

Although a healthy percentage of my clients are self-employed, many business owners think that the chances of getting approved for good financing are slim to none.

Fortunately, this is simply not true.

I consistently secure good financing for my self-employed clients in a number of different ways. This process goes smoothly when the following things are in place:

  • Good credit
  • Personal & corporate income taxes up to date
  • Income shown on the last 2 years’ personal Notices of Assessment
  • Business has been in operation for 2+ years

I can even get good financing and competitive rates for people who have been in business for less than 2 years, as long as they can prove previous work experience in the same industry.

Here are three Case Studies of Self-Employed Clients that I’ve recently assisted:

Printing Company Owner Saves Money: This gentleman came to me wanting to re-do his existing mortgage so that he could consolidate his debts. He’s run a successful printing company for the last 20+ years, and wanted to save some money by rolling his line of credit, vehicle lease and credit card debts into a new mortgage.
With mortgage rates being significantly lower today than they were 4 years ago when he got his existing mortgage, and with his credit card interest rates being in the area of 18-20%, the re-finance solution I designed for him made good financial sense.
By re-doing his mortgage, I helped this business owner save approximately $800/month, pay off his motorbike in full, and experience peace of mind about his finances

Self-Employed Business Consultant Buys A New Home: This successful businesswoman wanted to buy a new home for her family. She’d moved recently from Saskatchewan to Alberta, and had a good down payment from the sale of their former property.
However, since this businesswoman had only been operating her new company in Alberta for 10 months, she had no real provable income.
Thanks to the creative strategies I have for self-employed people and the 40+ Lenders I work with on a daily basis, I was able to find a Lender that respected her previous business experience and understands what it means to be in business for yourself. I found her a good mortgage for her property, and she and her family are excited to move in to their new home this Fall.

Successful Salon Owner Buys A New Vehicle: This successful Salon Owner wanted to buy a new vehicle for her family and to pay for it in full. While she had been in business for over 2 years and had average credit, the income on her Notices of Assessment was not enough to use for qualifying purposes.
Therefore, I designed a custom mortgage solution with the right Lender that welcomed her unique situation. In order to provide her with this lump sum of money, I re-did her mortgage so that we could convert some of the equity available in her property in to cash.
This really pleased my client because she’d been worried about how the low income on her tax returns would affect her ability to qualify. Plus, current leasing and financing rates at many vehicle dealerships range from 6 -10%, and the interest rate I secured for her on the new mortgage was less than 4%. This saved her money.
My mortgage solution made good sense to this successful Salon Owner, and she now enjoys a brand new vehicle that she owns outright.

As you can see, there are many types of self-employed people who qualify for good financing.
If you have questions or would like to explore what’s possible in your situation, call me for a *free* consultation.

Warm Regards,