For millions of gig workers and freelancers, monthly income can fluctuate wildly. Navigating this rollercoaster takes strength and spirit. It also makes it hard to qualify for traditional credit options.
In this context, loans against personal, movable assets come into their own. They can provide short-term liquidity for freelancers, quickly and without net asset or capital loss.
The feast-or-famine cycle
Freelancers face erratic income patterns. Workload oscillates between periods of too much and too little, and the balance in the bank account tends to peak and dip in unison.
Inconsistent income can strain resources, up anxiety levels, and make planning for the future almost impossible.
As one commentator puts it, the feast-or-famine cycle is … “akin to riding a wave – a rush of work followed by periods of uncertainty. The question is not whether you’ll experience it, but how you navigate through it.”
How many freelancers in South Africa
Despite the volatile nature of the the gig economy, an estimated two million South Africans derive their income from short-term contractual work.
That’s a figure backed by the World Bank. According to data quoted in an article by Momentum Savings, the international financial institution projected the number of self-employed to rise to 2,4 million in 2025.
Difficulty getting credit if you’re self-employed
When you’re self-employed, securing a loan is difficult at the best of times.
If your income varies widely and/or you have recently experienced lean months, banks and other traditional lenders are seldom interested in providing a loan or line of credit. The risk of default is too high.
Even when banks are willing to consider your loan application, they want to see a regular inflow of capital. Approvals are subject to credit history, employment status and whether you own property or other high-value non-depreciating assets, like listed shares or unit trusts.
Using what you own to bridge income gaps
When you don’t qualify for a bank loan, there is a solution – short-term loans against personal, movable assets.
These types of secured loans don’t rely on your operating performance, employment status or credit record. They use the quality, condition and appraised value of the item used as collateral as qualifying criteria.
What items you can use to secure credit
Any asset of value that you own outright can be used to secure credit.
Valuables accepted by asset-based credit providers typically include high-end jewellery, luxury wristwatches, designer handbags, artworks, antiques and vehicles.
How fast you can get funds
Funds backed by tangible personal assets are generally available within 24 hours. Approvals are quick, as no financial background checks or credit checks are required.
Pros and cons, relative to bank loans
Asset-based loans have easy qualifying criteria, quick approval times and flexible terms.
Unlike banks that require three months of bank statements, an active account at the bank in question, and a consistent flow of income into the account, paperwork is limited.
All that’s needed is a copy of your ID, proof of residence and proof that you own the asset used as security.
There is no long wait for the funds while the application is processed. The transaction is confidential, and has no impact on your credit score.
Once the funds are repaid, the asset is returned to you.
Accessing short-term liquidity with LoanAgainst
We offer short-term loans for freelancers. LoanAgainst is a trusted finance provider specialising in providing quick cash loans against personal items of value.
We offer competitive interest rates, easy terms and same-day approvals. Apply online now.
