If the self-employed need a new line of credit for themselves or their company or even the extension of an existing credit line, you have to prove to the lender that their creditworthiness is sufficient to repay the desired loan.
If a self-employed person or a company applies for a loan, a bank or a savings bank is legally obliged to make the loan decision dependent on a positive, more detailed examination of the financial situation. In the case of an employee, checks are carried out on the basis of the payroll; in the case of the self-employed, credit is only available with a BWA.
Annual accounts and BWA
Since freelancers, companies and other self-employed people cannot show third-party pay slips, income and assets must be checked against a balance sheet with an income statement. Since these are usually only created once a year in the context of annual financial statements, the so-called business evaluations – BWA – are used instead.
BWA for companies and entrepreneurs
The basis of the BWA are the current records of the accounting. In this way, information about costs and revenues, including profits or losses, can be provided within a business year that has not yet been closed. However, an economic evaluation not only provides information about the current economic and financial situation of a company, but you can also see from it what income the management and the entrepreneur himself generates from the company. In this respect, this evaluation is meaningful for a loan with BWA for the company, its management and its owners, provided that they have no other sources of income.
Lenders not only use business evaluations to determine a financial result, but also use the data to calculate the future prospects of the potential borrower. Because these tests take some time, in practice you have to allow some time before the loan decision. Because business evaluations are so important, they should be created professionally to provide sufficient information. Anyone who wants to successfully apply for a BWA loan for himself or his company as a self-employed person should not only have a successful entrepreneurial background, but also be able to prove this through meaningful, professional business evaluations.