How Business owner or Freelancer able to borrow bank loan?
Nowadays, applying for loan as freelancer or business owner is never as easy as last time. We are having hard time accepting rejection, crushed and demotivated to continue purchasing our dream houses. Say Never again!
So, here is how we could prepare ourselves to get our loan approved as a freelancer or business owner.
For people who owns business or starting their own business
Every bank has their own appetite and each of their requirement will be different. Here I will give you few tips where every bank will definitely accept your loan!
1. Already had SDN BHD business more than 2 years.
a) Remember to register your company under SSM at least more than 2 years.
b) Pay income tax Form B, be a good citizen.
c) Remember, if you pay tax. Try to pay PCB with your own account and not through your accountant company account. Trust me, this will save you alot alot of time and complexity when applying loan.
Bank will need the following documents
a. Your SSM registered cert >2 years
b. Income tax Form BE
c. Your company 6 months bank statements. They will look at credit balance each month to calculate your business income. The higher the credit balance average, the higher would be your income. Make sure every months credit balance almost the same and try to prevent high deviation.
d. Make sure you have complete set of form 24, form 49, form 9 (SSM)
You are all set.
2. What if my company is sole proprietor less than 2 years or I work as a freelance without company.
a) Find a friend/ family that have a company ( Best is sdn bhd), with high Paid up capital.
b) Contribute a fixed salary to yourself, lets’say RM6000 as your salary. Credit the amount after deduction EPF, TAX, SOSCO, credit cash monthly consistently using his company bank current cheque into your personal bank account. This will create a proper employee income proof.
c) Contribute KWSP to yourself, deduct 11% from your Rm6000 INCOME and 13% contributions from your own company.
(Bank will need to look at EPF and Bank statement credited salary as a proof of income)
d) Ask the company to create payslips to you or you create it with the boss consent.
Now you can apply loan as an employee of your own company. Bank will need to look at you Payslips, bank statement with RM6000 Gross income.
e) Make sure you get consent from the company boss where you are his/her employee, so when bank call the company the HR staff will acknowledge your existence and informed the bank.
This looks unethical in a way, but you are earning income but without any such ways to proof validation of the income. Hence, this is a great way to help you justify your actual income to get loan.
a) Register a company with SSM (Sdn bhd, sole prop or Limited Liability Partnership )
b) Open company bank current account
c) Start your business operation, make sure credit all income into your bank account, to boost credit ending balance every month. Slowly build your income slowly and calmly for 2 years from company establishment. They will look at credit balance each month to calculate your business income. The higher the credit balance average, the higher would be your income.
So that you income will built into a solid income
d) Pay income tax Borang B / BE as usual.
Why I can’t use my company tax BE form or Company bank statement to apply for loan?
— Because bank wouldn’t look at company with SSM registered less than 2 years. That’s why it is hard for people who just established company to apply for loan if they didn’t prepare as I stated as above—
Why I work as hawker and credit a monthly fixed income into my own account. BUt, bank wouldn’t accept my loan?
—Because your income doesn’t shows where it comes from, bank view this as a very vague income proof. Bank will wonder where your income comes from, even you show him picture of you goreng chay kuew teow, it is not enough. They wouldn’t accept your loan as you could be a syndicate crediting your income from drugs money.
Bank is a simple minded creature, all they need is a solid document to show them. Just follow point no.2 and you can apply loan easily. No matter you are a hawker, a freelancer, someone who earn a living from money dropping from skies or had a goose that lays gold egg. No problemo.—–
Why bank wouldn’t accept my loan when I have my company registered under SSM for 1.5 year and my company profit is very solid and strong. Moreover I am a responsible citizen who pays tax!!??
— First of all, bank is quite cocky. They want to be insured that your business is strong and solid and not crumble when wind blows, company established more than 2 years will make them believe so…….lol…. anyway, bank will only accept loan application through your company income and profit if given your company has established for 2 years or more.
Other solution? Buy a empty shell company established more than 2 years old, with transaction in their bank statement…… this is not encourageable… but oh well.. ——-
Above is just few methods in doing it, methods are based on case to case basis. Hence, you will need to sit down with a consultant to structure the right way in doing this. Consultant…! not normal direct banker.