How can an unemployed person get a loan to start a business?

Getting a loan to start your own business is a common practice. Lack of work does not mean that funding will absolutely be denied. To get a loan to start a business, you need to understand the features of the procedure and take into account a number of significant points.

Getting a business loan - what is it

The concept of "business loan" means receiving a sum of money from a bank that can be spent for any commercial purposes:

• purchase or lease of premises;
• purchase of products;
• purchase of goods;
• formation of the constituent capital fund;
• purchase and commissioning of machinery and/or equipment, etc.

It is possible to purchase a ready-made business with credit funds - an organization with an established work, an existing client base and confirmed turnover.

Important! Conducting commercial activities is possible only by persons registered in the form of an organization (LLC, JSC, CJSC and others) or individual entrepreneurs.

Who can apply for a business loan

Theoretically, there are 2 options:

• the loan is issued to a legal entity;
• The borrower is a private client.

In practice, in order to apply for a loan, a registered small business will need to disclose information about its current activities and leave collateral, such as equipment or other assets. For companies that have not yet begun to work, but have only received constituent documents, this type of lending is not available.

Making a loan for a private person to start a business is a more feasible option. But it is important to keep in mind that the approved amount for consumer lending programs in most cases will be in the range of 200 thousand to 1 million rubles. It is necessary to accurately calculate whether this money will be enough to open a business and pay related costs.

Will the unemployed get a loan to start their own business?

If you are not working, then getting a loan is problematic, but possible. But for this, most banks will need to confirm a favorable financial situation - you can provide documents for property or certificates of additional sources of income.

If possible, a loan secured by real estate or a car is available. In this case, the maximum amount will be equal to the value of the pledged property, which gives more financial opportunities for the implementation of the project.

How to answer questions about the employer when applying for a loan

Even if the bank does not require you to provide certificates from the place of employment and / or a copy of the work book to apply for a loan, you will still need to indicate the details of the employer in the questionnaire. Moreover, most financial institutions require that at the time of the application, the client has worked at the current place for at least 3-6 months.

Non-working borrowers can get out of the situation in several ways:

1. Establish a company or register yourself as an individual entrepreneur. In this case, you can specify your own company as an employer. At the same time, before filling out an application, it is important to clarify whether the selected bank lends to individual entrepreneurs and business owners.
2. Provide details of a fictitious or previous employer. This option can only be used if the bank does not verify the information provided. If the fraud is discovered, then the requested amount will be denied.

If there is no work, but there is a desire to open a business from scratch, then it is worth considering the option of obtaining a loan with the registration of a company or individual entrepreneur - in order to conduct business and open a company account, registering yourself as a legal entity will still be necessary. The second option should be used only in extreme cases.

Pitfalls of taking a loan for a business without a job

When obtaining a loan to start a business, you should make a high-quality financial forecast. In the absence of work, it is important to make sure that alternative sources of income and profit from the created business will be enough to service the obligations assumed.

If the loan debt is secured by real estate or a car, then in case of untimely or incomplete payment of the obligations assumed, it is possible to sell the pledge in order to pay off the overdue debt that has arisen.

Be sure to take into account that without confirmation of employment, the loan rate will be higher than for similar programs issued with a full package of documents.

Which banks are ready to give a loan to the unemployed to open a business

An analysis of bank offers showed that not a single credit organization is ready to provide a loan to the unemployed. But a sufficient number of banks offer to lend to private borrowers without proof of employment.

Business loan without collateral

Without providing a copy of a work book or an employment contract, most banks are not ready to give the borrower an amount. For more funding, please contact:

• - it is proposed to issue up to 700 thousand rubles at a rate of 11.9% to 25.5%;
• - you can take up to 1 million rubles at 14.9%–28.9% per annum;
• - available up to 1 million rubles at a rate of 18.9% to 22.9% per year;
• - up to 1 million rubles at a rate of 12.9%, subject to the payment of a one-time commission in the amount of 1% to 4.9% of the debt amount.

The interest rate is set for each person who applied personally after analyzing the data provided. The bank has the right to request the provision of additional documents, including a copy of the work book or employment contract. If it is impossible to satisfy the requirement on the application, in most cases a refusal will be issued.

Secured business loan

If it is possible to pledge real estate or a car, the loan amount can be increased to 8-10 million rubles.

Without providing documents confirming income, you can get a loan secured by a car in:

• Loco Bank - you can take up to 5 million rubles at a rate of 12.3% per annum to 14.4%, a one-time commission of 1.5% of the loan amount is required;
• - offered up to 1 million rubles at 19-32% per annum.

If it is possible to confirm income in alternative ways (for example, a certificate from a pension fund or documents on income from renting an apartment), it is most advantageous to contact:

• - rate from 11.25% to 21%;
• Housing Finance Bank - rate from 12.99% with a one-time commission of 4.9%;
• - rate from 13.5% to 14%;
• - the rate is 13.5% per annum.

It is legally established that when lending against collateral, collateral insurance (real estate or car) is mandatory. Also, the bank may increase the interest rate if the borrower refuses to issue personal protection in case of death or loss of health. On average, 1-3% will be added to the above rates if you do not want to take out a policy of such insurance.