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This is how you Buy a Car in Smithville when Self Employed

This is how you Buy a Car in Smithville when Self Employed

There is a growing number of Canadians who are joining the great resignation and starting their own businesses.  So today we're going to share how to buy a car in Smithville when self employed.

 

If you are self-employed, you will need to overcome a host of financial challenges.

 

One of the first things you will need to work on is securing financing to buy a car .

 

Lenders don’t know how to underwrite self-employed loans

 

In this modern age of quantum computing and artificial intelligence, lenders do not know how to properly underwrite a self-employed car loan, but that is the reality being faced by most entrepreneurs.

 

Lenders use a one size fits all approach when assessing a Smithville car loan application; anything that deviates from that and it generates an automatic rejection.

 

For example, a self-employed person could only be in business for one year and make millions. Still, if they don’t have two years of active business, then their application would be rejected without being reviewed by an actual human being.

 

It probably sounds like a joke, but this is happening each and every day.

 

Mixing personal and business credit

 

Most self-employed Canadians start off by using their personal credit cards and lines of credit to get their business off the ground.

 

However, when you take on a considerable amount of debt, this impacts your credit utilization rate, and that will pull down your credit score.

 

A lower credit score drives up your borrowing costs and makes you appear riskier in the eyes of a creditor.

 

To help mitigate this issue, you should open credit card accounts under your business name; as the owner, you will still be personally responsible for the debts, but it will not appear under your name in the credit reporting agencies.

 

Getting your books in order

 

You need to show prospective lenders that you are serious about your business and are well prepared. In addition, lenders will want to assess your income and credit score to determine whether you will keep your financial commitment.

 

The way you show your professionalism is to prepare all of your financial statements, from your income statement, bank account details, and contracts with customers.

 

Prospective lenders may not review these documents, but they will see you mean business with help when it comes time to approve the loan.

 

Finding lenders that are willing to work with self-employed borrowers

 

There are lenders out there that are eager to work with self-employed borrowers like you, but they cannot be found online.

 

You can access these lenders with the help of a reputable local dealership.

 

The dealership will have working relationships with these lenders and can negotiate on your behalf.

 

The interest rate for these loans can be higher than what a traditionally employed person will pay, but you will be able to buy the vehicle. In addition, if you are using the car for work purposes, then you can write off the interest as a business expense.

 

Now that you know how self-employed car loans work in Canada, you can visit your local dealership and begin reviewing all of the available options.

 

We’d love to help you buy a car in Smithville when self employed. Simply fill in the form below and we’ll get back to you ASAP! 

 

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