If you're a business owner, you'll likely have a relationship with an accountant or tax preparer to keep your finances in order. These professionals can help you with a check stubs maker to provide proof to potential lenders.
Keep in mind that even with check stubs, many lenders still require tax returns to show your salary. This provides them with added security that your income matches your pay stubs.
Having an accountant provide both options to your lender gives more credibility to your stated income on your loan application.
The next type of self-employment is a freelancer. Freelancers often work for corporations and can simply ask for proof letters from HR.
Freelancers are considered independent contractors by companies, but basically follow the same set of rules as full-time employees. Even if you're temporary at the firm, you're still considered freelance if you have access to the payroll or HR department within the company.
The final type of self-employment is gig workers. This worker typically does odd jobs with sporadic income.
If you're a gig worker, you won't have access to a payroll department to get a letter and probably don't work with an accountant. But gig workers can still provide past years' tax returns and bank statements as proof.
The length of time required to show stable income varies based on the lender. But expect a lengthier verification process when making major purchases like a car or a house.
There are car dealerships that don't ask for proof but be wary of fees. These car dealerships rely on interest to compensate them in the event you default on a loan.
Most lenders won't deal with high-risk borrowers who can't prove they can afford to repay the debt. Income proof protects you from high interest and the employer from default.
Forms of Self Employment Proof of Income
Knowing how to get proof of income if self-employed can save you a headache when trying to get financing. Proof of income is much simpler than most people imagine.
But if you're new to self-employment, it might be intimidating to think of handling your own payroll without the help of a big HR department. Avoid going through the process alone by enlisting the help of a part-time accountant to lighten your load.
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