Self Employment Offers Thrills and Challenges
The freedom of running their own shop is a thrill entrepreneurs can’t get enough of, especially in this age of virtual business and the side hustle. However, running your own shop has its own set of challenges that are easy to take for granted when you’re first contemplating a jump from corporate life to the land of start-ups.
“There is a lot to love about self-employment. You have the freedom to make your own choices and decisions. You can set your own hours, build your own investment (rather than somebody else’s), and never have to ask off for vacation or family events. Of course, you don’t get paid when you go on vacation either, so there is definitely a balance that needs to be struck,” said Greg Johnson on DoughRoller.com.
“Self-employment also comes with a lot more risk. If you have a bad month, you are not guaranteed a salary. Furthermore, you’re completely on your own when it comes to covering costs for healthcare, retirement, and business expenses. You can’t just turn in an expense report and get reimbursed. Everything that you spend on your business comes directly out of your pocket.”
As reported by Business News Daily, a survey commissioned by FreshBooks indicated 85 percent of independent professionals signaled a variety of tough challenges, particularly in the financial arena. No surprise: small businesses tend to be less prepared for cash crises than larger companies.
According to the survey, 48 percent of respondents said they are unprepared should the business get sued, and 39 percent are unprepared should they suffer a disability and cannot run their business.
“Without a safety net for small business, such as health care, unemployment compensation or emergency savings, many small business owners will limit their own potential as a way to mitigate risk,” said Matthew Baker, vice president of strategic planning at FreshBooks. “This means many small business owners will forego attractive growth opportunities that require an upfront investment or a longer-term commitment, such as hiring a full-time employee.”
Let’s say you are doing well, in spite of the challenges, and you want to get a loan. Is it tougher to get self employed loans?
According to GrowingFamilyBenefits.com, self-employed individuals can obtain funding for a variety of needs including emergencies, debt consolidation, business startups, and more, but may need to provide additional documentation to verify income:
Self-employed individuals with top-notch credit scores can often qualify for personal loans based on their history of prompt on-time payment alone. Those with poor ratings often must compensate with strong earnings documentation including tax return information and better credit scores for people without financial documents.
Private lending consists of individuals providing funding to borrowers with less than ideal credit or no income statements. Essentially, private lending is dependent on direct lending versus deeds of trust that are compelled by basic collateral value. Private lending is also called self-directed lending, non-traditional lending, and peer-to-peer lending.
Borrowers who do not fulfill more traditional lending requirements due to bad credit, employment-status issues and citizenship problems find this niche favorable.
Clearly, it’s definitely worth it for self employed people to look into private lending solutions.
