As an entrepreneur, you have a vision for a new business venture that you’re eager to bring to life. But in order to get your new business up and running, you need to secure a loan from a bank. If you’re an independent contractor, you may find that verifying your work history can be a bit more complex than for employees. This guide will help you navigate the process and equip you with the tools you need to secure a loan for your new business adventure.
Get Organized
The first step in verifying your work history as an independent contractor is to get organized. Gather all of your tax returns, invoices, and contracts that demonstrate your income and work experience. Having all of your information in one place will make the verification process much easier and more efficient.
Use a calendar to track progress and deadlines for each part of your loan application process. Depending on the sizes of the tasks ahead of you, it may be helpful to use project management software.
Verify Income
One of the most important aspects of securing a loan as an independent contractor is demonstrating your income. Banks will typically require tax returns and invoices to verify your income. Make sure that your tax returns accurately reflect your income as an independent contractor, and ensure that your invoices are clearly dated and show the amount of money earned for each project. Certain jobs may be eligible with services that provide free verification, such as this Free Employment Verification for Uber Drivers.
In addition to tax returns and invoices, banks may also require proof of ongoing projects or contracts that demonstrate a steady stream of income. Having a portfolio of current and past projects, as well as contracts with clients, can provide the bank with the assurance that you have a consistent income stream.
Verify Experience
When seeking references, it’s important to choose individuals who can speak to your work ethic, professionalism, and ability to complete projects on time and within budget. Testimonials from colleagues, clients or other professionals in your industry can also provide valuable insight into your work experience and the quality of your work. Ask for testimonials from a variety of people within your professional network and present it along with your other documents.
Write Your Business Plan
In addition to verifying your work history, banks will also want to see a detailed business plan that outlines your goals, target market, and projected financials. Your business plan should demonstrate your understanding of the market and your ability to effectively manage and grow your business. Having a well-written business plan can also demonstrate your commitment to your new business venture and provide the bank with the assurance that you have a clear plan in place for the future.
Verifying your work history as an independent contractor can seem like a daunting task, but with the right preparation and documentation, the process can be a smooth one. Remember to stay organized, have a clear and well-documented business plan, and demonstrate your income and work experience using a variety of methods.
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