Many self-employed entrepreneurs and business owners assume that they are unable to access finance solutions to help fuel their business success and smooth over gaps in cash flow.

With a team like ScotPac behind you, that simply is not the case. Whether it is a business line of credit or an alternative solution, there are a number of different options available for contractors, freelancers and new businesses.

You can find out more about the fast and flexible funding solutions available from ScotPac here.

Why might you benefit from a business line of credit?

When you are a contractor, independent professional or freelancer, there are a lot of opportunities for success.

But with those opportunities come challenges.

Flexible funding allows you to maintain:

  • Control over your cash flow
  • Daily operations
  • Consistent and reliable access to working capital

At ScotPac, we understand the dynamic nature of self-employed work. That is why we work with our clients as partners to ensure that whether you are a contractor or just self-employed, you can make an informed decision about the suitable funding options that meet your needs.

Who can qualify for a line of credit as a contractor or freelancer?

ScotPac is the largest non-banking financial lender in Australia. As such, we are able to reduce much of the strict lending criteria required by more traditional institutions.

However, if you are a contractor or freelancer looking to access a business line of credit, you will need to meet the following criteria to qualify:

  • Be 18 years of age or older
  • Be an Australian citizen or permanent resident
  • Have consistent trading history for 12 months or longer
  • Demonstrate a minimum turnover of $50,000 per month in total sales
How do applications work? 

A Line of Credit application with ScotPac is simple and quick.

  • Just complete our online form, which takes less than 5 minutes.
  • Then upload your bank statements and documents.
  • Receive a credit decision in as little as just 24 hours.
  • Access funds within one business day from approval.
What do you need for your business line of credit application? 

In addition to photo identification, you will need to provide at least 6 months of business bank statements.

How much can you borrow? 

At ScotPac, our borrowing range includes line of credit facility limits of up to $500,000, or 150% of your average monthly sales.

What if you do not qualify for a line of credit? 

For contractors or freelancers not yet meeting the eligibility criteria, we recommend speaking to the lending specialists here at ScotPac to discuss alternative funding solutions that may be better suited for your needs and circumstances.

Ready to explore funding options for the self-employed, contractors and freelancers?

Whether a business line of credit is the right funding solution for your needs, or you want to find the most flexible solution for your future success, we are here to help.

ScotPac has over 35 years of experience helping Australian businesses access the solutions they need to grow, and we currently support over 9300 different businesses.

Whether you’re a contractor, freelancer or just running your own business, contact us today.

Frequently Asked Questions about Line of Credit for Contractors & Freelancers

Can sole traders or freelancers apply for a line of credit?

Yes, any business can apply for a line of credit. However, it is important to note that you will need at least 12 months of trading history and a minimum monthly turnover of $50,000 to qualify. 

What are alternative funding options for contractors and freelancers?

If you are self-employed and ineligible for a line of credit, we offer other funding solutions, , that may be suitable for your needs. 

Does variable income disqualify a business automatically?

No. 

Here at ScotPac, we take a holistic approach to approving business. Even if your month-to-month inflow of cash varies – as it often does for consultants and freelancers – you may be able to access a business solution. 

Make sure to get in touch with our team for a custom consultation with a ScotPac lending specialist. 

Is my personal credit history important or just business credit?

For new and small businesses, especially contractors and freelancers, a strong business and personal credit history can be helpful. 

If you are concerned that your creditworthiness is not as sharp as it could be, speak to a ScotPac representative today to discuss alternative solutions. 

How can you improve your eligibility for a business line of credit?

There are a few ways in which you can improve your eligibility for a business line of credit or other finance solutions. 

  1. Achieve more consistent turnover 
  2. Ensure sales stability and predictable cash flow 
  3. Negotiate stronger agreements, such as contract length and renewal frequency, with clients 
  4. Increase your client diversity to lower the risk and dependency 
  5. Maintain strong finance and banking documentation 
  6. Consolidate debt to improve your credit history 

 

How can contractors use a line of credit to grow their business?

Self-employed entrepreneurs can use a business line of credit to: 

  • Smooth out gaps in cash flow 
  • Purchase new assets or equipment 
  • Fund materials or inventory at bulk price and upfront 
  • Take on larger contracts 
  • Cover business expenses 
  • Consolidate debt and repay loans 
  • Smooth out turnover over seasonal fluctuations in sales 

What is the benefit of a business line of credit?

Unlike a traditional business loan, a line of credit allows flexible drawdown and repayment. Not only does this save on costs as you only pay interest on the amount you draw and not the entirety of your approved limit, but it helps maintain day-to-day operations and enable sustainable growth. 

How can you prepare for a line of credit application?

Once your business meets the line of credit application criteria, here is a step-by-step guide to prepare for your application: 

  • Make sure you have up-to-date banking statements. 
  • Document your long-term contracts or recurring client work. 
  • Check your documentation to ensure it is accurate. 
  • Ensure your business banking is separate from your personal banking. 
  • Have your photo ID ready and available. 
  • Talk to a ScotPac credit specialist to determine if a business line of credit is the best-fit funding product.