The gig economy is wide ranging from Uber drivers and Deliveroo riders to online freelancers and even beyond, and it is increasing in the United Kingdom, and globally, every month. In the United Kingdom, one in every seven individuals has offered a monthly freelance job. There are even gig workers in the aerospace sector. Every sector can offer something to the Gig Economy and they contribute about £20 billion to the UK economy. The gig economy is a major and rising part of the workforce where short-term flexible employees are paid based on the completion of the project (known as gigs) instead of just the period of time they work. Numerous banks in the United Kingdom consider freelancers to be high-risk, and as a response, they may be hesitant to enter into a loan arrangement with them. Since a freelancer is recognised as a sole proprietor, he or she is solely responsible for any losses or debts incurred by his or her business.
In a perfect society, you would’ve been able to withdraw the cash you want from your own checking account, but you may require financial assistance periodically. We’ll look at the ideal business loans for freelancers in this article.
There are two main loan schemes:
The Coronavirus Business Interruption Loan Scheme (CBILS)- The Coronavirus Business Interruption Loan Scheme (CBILS) was established to give financial assistance to SMEs across the United Kingdom through a government-backed loan guarantee. As a result of the coronavirus epidemic, CBILS financing options are designed to assist firms who are losing income and experiencing cash flow disruptions. The CBILS is available to sole proprietors and freelancers.They will be eligible to apply if their commercial activity was performed using a business account.Sole traders, freelancers, corporates, limited partnerships, limited liability partnerships, and other legal organisations were eligible under the program.
Bounce Bank Loans for small businesses – Small businesses, such as sole proprietors and limited company freelancers, are more likely to use Bounce Back Loans since the sums are small and the government will cover the loan 100 percent. For the first 12 months, there will be no charges or interest to pay. The annual interest rate will be 2.5 percent after 12 months.
There are lenders who will consider freelancer workers, there is crowdfunding loans, as well as personal loans that could be used for business purposes, but before taking a loan, you should first consider that the loan is affordable and repayments can be made.