Private loans are among the banking products that are in greatest demand. While it is usually not a problem for permanent employees to get a loan, the situation is often different for the self-employed. Since their income is often subject to strong fluctuations, in many cases they have to apply for a BWA loan.
What is a BWA loan?
This financial term describes a form of loan that is specifically tailored to the needs of the self-employed. In order for the bank to better assess its risk, it needs a business analysis, abbreviated BWA. The BWA is required to check the applicant’s creditworthiness. In contrast to a balance sheet, which is only created after the end of the financial year, the BWA shows the current situation of the company.
It lists the company’s income and expenses and shows the company’s current earnings situation. In order for a BWA to be used as a source of information, the form and content must take certain standards into account. The best thing to do to create a business evaluation is to ask a competent specialist for help.
Many branch banks struggle to grant loans to the self-employed.
You are often lucky with direct banks. If you apply for a loan with BWA, you should note that the business evaluation as proof of creditworthiness is not sufficient. Quite a few banks also require an income tax return for the past 2 years and bank statements for the last 3 to 6 months. In the case of a loan with BWA, the bank as a potential lender also obtains information from Credit Bureau about the applicant before approval.
If you have serious negative entries in the common database of the German banking industry, there is a high probability that your loan application will be rejected. You can avoid this by requesting information from Credit Bureau in good time before applying for a loan. As a result, you know your current situation. It is not unusual for the entries there to be incorrect or outdated. Since the credit check requires more documents for this loan than for an ordinary employee, the decision also takes significantly longer.
A loan with an instant commitment therefore makes little sense. Since there is strong competition between the many providers in the German financial sector, it is worth comparing the various offers. There are significant price differences for the same loan amount between the cheapest and the most expensive provider, which can quickly exceed three-digit amounts.