Updated May 15, 2025
If you’re self-employed or an independent contractor, you may be wondering if small business loans are within reach. Many assume that these types of loans are geared toward larger businesses with employees, but the truth is that there are options available for you too.
Small business loans can help you secure funding to launch, stabilize, or grow your business, and the eligibility requirements may be more feasible than you realize.
Let’s talk more about what that means and how you may be able to leverage funding for your venture.
What Does It Mean to Be Self-Employed?
Put simply, self-employed individuals earn income by working for themselves, but the IRS offers more specific guidance for what self-employment can mean, including:
- Being a sole proprietor or independent contractor for a trade or business
- Being a member of a trade or business partnership
- Or otherwise being in business for yourself
Your business could be structured in several ways — sole proprietorship, partnership, LLC, etc. — and the way it’s organized may impact your loan options, but essentially being self-employed means you run your own business and make money for yourself.
How to Get a Loan While Self-Employed
Generally speaking, applying for a self-employed loan is similar to a personal loan. Here are a few tips to help you know what to expect from the process:
- Research lender eligibility requirements. Finding out what loans you qualify for is step number one before you apply for anything. Take a look at what type of credit is needed, what businesses entities are eligible, and if you need to put up any collateral.
- As you apply for the loan, ensure you upload the right documents for the lender. Applications often need a lot of financial background and revenue information, so work with your lender to understand what information they may require.
- If your loan is accepted, carefully read through the contract. It may sound obvious, but you don’t want to sign something you don’t understand. If you have any questions about the contract, ask your lender to clarify.
How Much Funding Can You Get with Small Business Loans?
Each type of loan has different limitations on what you can borrow based on your eligibility. Microloans, for example, allow borrowers up to $50,000 for startup costs. Other small business loans, such as SBA(7a) loans, have limits up to $5,000,000.
How much you can borrow will depend on what you are using the money for and what type of business you are in. To understand how much you qualify for, speak to your local lender about the different options available to your small business.
Alternatives to Small Business Loans for the Self-Employed
Traditional loans aren’t always the best fit. Fortunately, there may be alternative funding options that can offer more flexible requirements, like:
Business Credit Cards – Like personal credit cards, business credit cards are often used to buy everyday items and larger purchases within your approved limit. They can help you build up your business credit, which may help you get a business loan down the line if you so choose.
Lines of Credit – Similar to a credit card, a commercial line of credit is a financing option that allows borrowers to use funds for qualified business expenses up to a pre-approved limit. Unlike a lump sum loan, lines of credit can be used to draw funds over time as needed and repayment is structured accordingly.
Crowdfunding – Many self-employed entrepreneurs use crowdfunding as a source to start their businesses or fund products. This often requires a product that will appeal directly to consumers through a strong marketing campaign. It’s also important to understand how your chosen crowdfunding platform works, including requisite fees or other limitations, and what expectations donors may have after you’ve reached full funding.
Getting Funding for Your Small Business
Self-employed businesses often face unique challenges when seeking funding, but you’re not alone. With a clear plan and the right resources, you can explore financing options for what you need from a lender you can trust.
SouthEast Bank is here to support your business goals and help you navigate your options. Explore our products and services, and don’t hesitate to visit your local banker to learn more why business customers in Middle and East Tennessee choose us.
Learn more about our limited-time $400 Core Business Bonus!
Note: Information contained in this blog is for educational and informational purposes only. Nothing contained in this blog should be construed as legal or tax advice. An attorney or tax advisor should be consulted for advice based on your circumstances.
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