As a client of accounting services in London, it isn’t just taxation that will give you money worries as a freelancer, especially if you are only just getting started. The reality is that many new freelancers may also find themselves stumped as to the best ways of raising finance for their new business. If this is your position, our experts at Freelancer Accounting (http://www.freelanceraccounting.com) can introduce you to sources of finance both well-known and relatively undiscovered.
One of the problems when you are first starting out as a freelancer is that you can be seen as a riskier investment. This means that, if you want to minimise costs, you may be best advised by small business accountants to depend initially on a bank loan/overdraft, savings and/or money borrowed from family. But of course, as is always the case when one is seeking funding, the right business plan is vital when you are approaching a bank, so that it can have confidence in you achieving set objectives with your given resources.
What banks most want to know about prospective lenders is the security that they can provide. Of all of the assets that you could have that could possibly be sold on by the bank if you default on the loan, your house is the most obvious. It’s customary for almost all borrowings for the bank to request a “charge” over your home, which allows them to force a sale on your house so that their money can be recovered if you fail to repay the loan.
Our accountants for freelancers would advise anyone who is seeking this type of finance to consult the bank that they have a personal account with first, as they will be aware of your history and more likely to be of help. Another potential source of finance for a freelancer is a government grant, scheme or loan. Examples of grant providers include the Prince’s Trust, which considers applications for grants or loans from young people aged 18-30 who may be of limited means, unemployed or underemployed.
Across the full range of grant providers, criteria vary widely depending on such factors as business location and sector, as well as the number and type of employees. The sums that are granted also vary greatly, but when you are new to freelancing and only just starting to take advantage of contractor accountancy, you might not fully appreciate how much every little saving helps. European Commission grants and loans are also a possibility.
It may be the case that you are not intending to remain a freelancer forever, perhaps having ambitions to establish a larger business over time – in which case, you may want to consider investment from a business angel. In the meantime, Freelancer Accounting (http://www.freelanceraccounting.com) is on hand with contractor accountants to guide you in the efficient structuring of your tax affairs as a freelancer.