In the case of salaried employees and civil servants, income can usually be read off quite simply from the pay slips. But how does it work with self-employed? How do banks determine the income of self-employed persons or freelancers when granting loans??
Banks take very different approaches to determining the income of self-employed persons. However, they all have in common that they calculate the income on the basis of the actual income of the last 2-3 years. This distinguishes self-employed from employees or civil servants, where the income of the last years is rather uninteresting. Self-employed persons have to go far back into the past and present corresponding proofs of income. These proofs of income consist of the last tax assessment (and the corresponding tax returns) as well as the profit calculations (income surplus account) or corresponding balance sheets.
Self-employed persons need the provable figures of the last 3 years (a few banks are also satisfied with the figures of the last 2 years). If these figures are available, each bank, savings bank or other lender proceeds differently. Some banks use the profit of the last year for the income calculation. The others take the average of the last 3 years. Still others use the lowest value of the last 3 years. As I said: every bank cooks its own soup.
Who earns less than 2 resp. has been self-employed for 3 years is considered by the banks to be a business start-up. There it becomes then with the real estate financing rather narrowly, because only few banks let themselves be on it. This is due to the fact that experience shows that self-employed people fail especially in the first 2 years of their self-employment.
How to calculate the disposable income?
The linchpin of the lending decision is the sog. disposable income. This is the income that is available to you each month after all fixed costs have been deducted and must be sufficient to cover u.a. to service the interest and redemption installments with the lender. To determine this disposable income, take the profit that you make in the year. The income tax to be paid is deducted from this profit. The then remaining amount you divide by 12 (months) and thus have your monthly income. From this, however, further amounts are deducted:
- contributions for health insurance (which must be proven in the amount)
- Contributions to the pension plan (but at least 20 percent of the profit after taxes and usually at least 500 euros per month)
The amount then remaining is roughly comparable to the net income of an employee or civil servant.
Depreciation as a point of contention
While service workers usually do not have large fixed assets (machines, vehicles, etc.).), the situation is quite different for craftsmen, for example. These fixed assets are written off in the profit calculation or balance sheet. These depreciations thus lower the profit, but are ultimately only theoretical costs.
Banks deal with these write-offs differently when calculating income. Some banks add back all or part of the depreciation to the profit in a cash-flow analysis, others actually use only the profit after depreciation. After all, entrepreneurs would have to build up reserves to replace fixed assets as soon as they are depreciated. However, this lags when machines o.ä. continue to be used as soon as they are written off or replacement is financed by means of loans anyway. Here one must if necessary. Persuasion is needed.
What to do in case of reported losses in the past years?
If you have reported losses as a self-employed person in the past years, the situation becomes tight. Unless any special effects are responsible, every bank will "zero out" your income. And with it a credit granting is usually no longer possible. If, on the other hand, there is only one year with a negative result in between, one must have a logical and comprehensible explanation ready for this as well.
Do corona aids count as income from the bank's point of view?!
With the so-called. Corona aid depends on the "big picture" to. The paid subsidies are supposed to compensate for the corona-related loss of income. In this respect, the Corona aid is booked as normal in the income and thus increases the profit or loss of the company. minimize the loss. Those who have received Corona aid, however, must be prepared for tough talks with the banks. There are said to be banks and bankers who question the entire business model of a company in this case.
What proof of income must be brought?
The tax documents such as tax assessment notices, tax returns and the corresponding balance sheets serve as proof of income or. Profit statements, lists of totals and balances ("SuSa"). Important: Banks generally do not accept tax returns that you have prepared yourself, but require that they have been prepared by a tax advisor. This is especially true if the last tax assessment for the penultimate calendar year is available, because then banks usually want to see figures certified by the tax advisor.
Tip: talk to your tax advisor!
Before you start looking for real estate financing, you should discuss your current income situation in detail with your tax advisor. Based on his or her experience, this person knows what numbers the banks are calculating and can give you tips on how best to present your numbers. Remember that it doesn't make a very good impression on banks if you can't give good answers to questions about your income situation. You don't necessarily have to be a specialist in reading balance sheets, but banks rightly expect a certain basic knowledge.
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