The Ups and Downs Of Self Employment and It’s Financial Implications

The term ‘start-up’ conjures up multiple images in the human mind, most of which relate to independent businesses with the potential to expand. Take the recent example set by technology firm Deep Mind, for example, who made the news this week when the owners sold their venture to Google for a record £400 million. This is how most people imaging modern start-ups, primarily as innovation led and technology driven firms with an aspiration to sell their intellectual property.

The Great Recession changed the nature of start-ups in the UK, however, with the result that demographic often includes sole traders who operate alone and sell a single service to the consumer market. There is no doubt that while the economy has regressed and reduced the number of viable and traditional employment opportunities on the market, technology has evolved to make it easier than ever for individuals to start their own business venture and become self-employed.

The Ups and Downs Of Self Employment and It’s Financial Implications

The Truth about Self-Employment: Addressing the Pros and Cons

It cannot be denied that if you are fortunate enough to work for yourself, however, you will reap many benefits on a daily basis. Perhaps you can work in your pyjamas or sleep until 10am on a week day, never work a weekend again or only have to talk to people over the telephone? Whatever it is that is your little secret there are many reasons other than control, ambition and determination that keep entrepreneurs in business.

However with yin comes yang and as such there are also a number of things that self-employed people find particularly difficult for example getting a loan, mortgage or certain types of bank accounts. Sometimes even renting a property can require a guarantor, something most over 21 year olds never need consider. Yet there are things you can do to ease or even remove these blockades, and you simply need to read on for more information.

Renting or Buying Property as a Self-Employed Individual

When you are self employed your buying power seems to be immediately and radically reduced leaving you unable to purchase or event rent property in some cases. This can be demoralising and make you feel worthless; as if what you have to offer isn’t quite enough. It doesn’t have to be like this, however, as there are easy and relatively accessible ways to ensure that you can live in your own property whether you choose to rent or purchase.

If you are buying, for example, there are specialist service providers such as Rite Mortgages who offer mortgages specifically for those who are self employed. On the flip side, if you are renting you should consider going private rather than through an estate agent. After all, most private landlords are self employed themselves and as such it would be hard to see them having a problem with you being self employed as well.

Finances and Banks: Managing your Finances

Another area that takes a hit when you become self employed is your financial prowess. All of a sudden it is much harder to get that short term loan or open a new bank account. However fear not; as this blogger explains it all becomes a lot easier when you have been in the business for three years. After three years, you can then use your accounts as proof of your financial stability. This proof shows the bank that you are not a high risk client and that you are suitable for credit, whether that be in the form of a loan or credit card.

And just like that you are back in the game.