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Car finance for the self-employed, small business owners who don’t have a steady income

self-employed finance

Going on your own can be the best thing you have ever done and whether you are self-employed, run your own SME or work as a freelancer, there are so many advantages that those that work from home or run their own businesses often wished that they made the change earlier. However, when you are your own boss, income is never a guarantee, and that has an impact on your credit score when you are looking to finance a vehicle.

What can you do to give yourself the best chance of gaining credit when you are starting out and don’t have a steady income and just as importantly, how can you protect your credit rating?

What can small businesses do to get finance for a car?

Lenders are obviously most interested in if you have the ability to pay them back or not. Some won’t consider new businesses until they have a firm, established track record. If you have a Companies House registered company then they will be interested in your accounts and the income that the company has made (in many cases over the last three years, although one year of trading will work for some) before granting credit to a business.

Other lenders will be more interested in your income, how regular it is and the amount you have earned over the last three to six months. Some will want to understand how your business is structured, for example, how many directors there are.

Of course, if you are looking to get finance through a business application, they will also want to check if you have a credit history (with other lenders) and if you have any adverse credit incidents like County Court Judgements (CCJ’s). They will often want to see detailed accounts and be able to judge income versus expenditure before granting credit, particularly if a company has been trading for less than three years.

So it’s key that you have clean accounts and are able to demonstrate a track history of income and expenditure which would allow the business to qualify for a car finance loan. Thinking ahead and ensuring that you can demonstrate a solid trading history and clean accounts will make all the difference when applying for credit.

Sole traders

Many self-employed people, small businesses and freelancers aren’t registered as companies however and operate instead as sole traders. In this case, the lender will still want to see how much you earn per month and are likely to want to see evidence of your ‘discretionary income’ which is what is left when you subtract your non-discretionary (unavoidable outgoings like gas and electricity bills or rent/mortgage payments) from your income.

For this reason, it’s important to be able to show regular income over a period of at least the last three months and the lender is likely to take an average per month over this period, but are more inclined to grant credit if the income is regular rather than sporadic.

Hippo Motor Finance will not recommend that you take out car finance if you can’t afford it, but we also realise that income can be seasonal in nature so it’s a good idea to check your past earnings for seasonality trends and factor this in when you apply for finance.

Check your chances first

It also does not hurt to look and see if you will be accepted in the first instance, provided that the broker or finance company you are using is using soft search. That’s why Hippo Motor Finance has a soft search facility to check if you will or will not get credit and because we have such a big panel of lenders you are more likely to be approved in the first place but also more likely to gain a favourable APR rate. This is key when checking, make sure your finance broker or lender has a soft search if you are starting out.

Let Hippo Motor Finance check if you qualify without damaging your credit score using our Instant Car Finance Check soft search tool. For more information call 01254 956 777.

Representative Example of Credit

We expect more than 51% of our customers to achieve this rate.

Loan Amount Total Cost of Credit Representative APR 60 Monthly Payments Deposit Amount Loan Term Total Amount Payable
£7,500 £3831 19.1% APR £188.85 £0 60 Months £11,331

All offers are subject to change at any time, you must be 18 or over and finance is subject to status, vehicle availability and terms and conditions apply. We can introduce you to a limited number of finance companies, a commission may be received. Failure to maintain payments may result in termination of your agreement and the vehicle being returned, this could affect your credit rating and make it more difficult to obtain credit in the future. All prices correct at time of publication.

We purchase a wide variety of vehicles from all over the country to ensure the best quality and value for our customers, all of our cars go through a thorough inspection process and if they do not meet our standards we do not sell them. We endeavour to inform our customers (where possible) the provenance of the vehicle they are buying and as such we will always inform you if the vehicle has previously been either an ex fleet or hire car. Should your vehicle be an ex hire/fleet car please do not be concerned as we would never value this vehicle differently when you come to part exchange it and there is no difference to the CAP valuation either.

You should try and estimate the distance you will travel as accurately as possible to try and avoid excess mileage charges at the end of your contract.

All pictures and/or photos and car descriptions on this site are for illustration and reference purposes only and are not necessarily the vehicle on offer. All offers are subject to change at any time and are subject to finance approval and vehicle availability. All prices correct at time of publication. E & OE.

Hippo Vehicle Solutions t/a Hippo Motor Finance is authorised and regulated by the Financial Conduct Authority. FRN 658076. We are a Credit Broker not a Lender and can introduce you to a limited number of lenders. Subject to status and to UK residents only (excl. the Channel Islands). Individuals must be 18 or over. Guarantees and indemnities may be required. We typically receive a fixed commission calculated by reference to the vehicle model, product or amount you borrow, for introducing you to a lender but this does not affect the interest charged on the agreement, all of which are set by the lender. Images for illustrative purposes only. Hippo Vehicle Solutions t/a Hippo Motor Finance is an Appointed Representative of AutoProtect (MBI) Limited for insurance distribution purposes. AutoProtect (MBI) Limited is authorised and regulated by the Financial Conduct Authority. Its firm reference number is 312143. You can check this at

We endeavour to ensure that all information including the specifications and finance availability are accurate. Whilst we make every effort to display correct information we are aware that errors may occur occasionally. We are not able, therefore, to guarantee the accuracy of all information especially when given to us by third parties. If you do require clarification of some information you have seen on our website, please email us at . This does not affect your statutory rights.

We are a broker not a lender and our registered office is Unit 26 Trident Park, Trident Way, Blackburn, BB13NU.