Debt restructuring for the self-employed serves to replace an existing loan contract with a new loan. As a rule, the new loan contract is concluded with another provider who offers more favorable terms. But what should I pay attention to now?
Thorough information is essential
It is important to know first of all whether debt restructuring makes sense for the self-employed in their own case. This is always the case when a short-term bank loan – for example, the current account overdraft facility – is to be changed to a long-term loan. Even if fixed interest rates for a current loan expire, the borrower can reschedule if higher interest rates are estimated. Be careful if there are prepayment penalties for the existing loan, because they can cause high costs!
Self-employed are the least popular customers
Since the self-employed do not have a fixed income and also generally have an entrepreneurial risk, they are not the most popular customers at banks. Debt restructuring for the self-employed is therefore more difficult than for employees or civil servants. It is important for debt restructuring, especially for the self-employed, that they present their economic situation transparently.
Anyone wishing to effect the debt restructuring should therefore come up with conclusive balance sheets with the potential lender and also have a structured and promising future forecast. The more secure the economic situation of the company appears, the easier it is for the self-employed when rescheduling with the new lender. A clearly structured list of liabilities in the private sector as well as a profit and loss account of your own company are clear facts on which debt restructuring can be built.
The market is now reacting to the problem of loans for the self-employed. The result is that some providers have now specialized in this type of loan. Many direct banks, which do not necessarily have to be located in Germany, offer debt restructuring for the self-employed. It is important, however, that you as a loan seeker check the conditions carefully. Offers that are connected with upfront costs should be turned down immediately, because these are dubious free-riders on the market who only focus on collecting the processing fees, but do not seek credit brokerage. Reputable banks provide an offer that is conclusive and that is not linked to conditions and costs in advance of the loan.
Debt restructuring is also possible for the self-employed, albeit with higher hurdles. It is important to carefully examine the large number of providers, because the opening up of internal European borders has also increased competition on the credit market, which means that even the self-employed have real chances of getting the credit they want.