Things I wish I knew before becoming a freelancer

If there was one thing I wish I new before I became a freelancer was how hard it is to get a loan from a U.S. bank as a freelancer. Chase Bank doesn’t care that I have double the income I had as a staffer. They needed me to sign all these affidavits and crazy forms and FECK ME. The ONLY thing saving me was that I had a bunch of income from freelance that paid me as a staffer via W2 payroll.

So before you become freelance, make sure you buy a car and refinance your mortgage if need be. SHEESH. Or be prepared to wait a solid 2 years before banks will give you the time of day.

What do you wish you knew before you went freelance?

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The fact that forums need a safe space, because as adults apparently replacing the letter U with E is all that is needed to not offend someone.

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fuck that . . .

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I found that to be much less of an issue once I was able to show a previous tax return as an independent.

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Yes, I occasionally edit Topic Titles in an effort to keep things professional and safe for work.

*Things

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Doesn’t mirror my experience. Though I didn’t go through regular banks, but instead worked with business lenders directly to lease equipment. They just needed 3 months bank statements and the usual paperwork. I am registered as an LLC though, not as a 1099er. That can make a difference, but is worth it anyway. It also brings in a separate credit score into the picture.

I was able to borrow substantial amounts to front load the growth of the business in terms of equipment.

That is a problem with your bank, not your income stream.

Chase is too big. Try your local / specialty credit union where you are not one of a billion customers.

We have a local lender. We are an established customer with human beings; we know them and they know us and we’ve used them for multiple mortgages and lending. We are not a faceless entity, and that goes a very long way for relationship building and trust. :sunglasses:

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I prefer the old English style “fuque.”

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Randy, I feel your pain. Last year when I bought a house the experience was grueling and I wasn’t sure it would go through. Didn’t matter that my corporate revenue was higher than ever. They wanted to see W2, which was crap.

We did the same thing in LA for 25 years at the credit union, and we also used a mortgage broker who we had a relationship with.

When we moved to Michigan we had to re-establish ourselves & buy a house and we didn’t even live here…so we went to a local bank.

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First Entertainment Credit Union. They know all about VFX people :sunglasses:

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The credit unions often have very favorable lending rates in our experience. And if you need a car loan they were the lowest loans we ever saw.

Also, your don’t have to keep all your money & do all your banking at the new bank or credit union. Just open an account. Boom you’re a customer. You can still “bank with Chase”…

I bank with BOA, which is a cartoonish version of Mr. Robot EvilCorp

What i found amazing is how hard it was for me to get a mortage as a small company owner, but my one and only member of staff found it easy as she is in full time employment paid by good self. Amazing!

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that your health insurance is going to rise about 10% a year and you don’t have any options like a group policy to help lower costs at least non that I know of that are of any good.

Definitely start a company they cap write offs for individuals but not companies so you can have more expenses.

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I’ve not used First Entertainment but I know friends that have and they’ve been very happy with them.

I would also put City National Bank on the short list. They specialize in the entertainment industry so they understand 1099 v. W2, being self-employed, COVID-related production slowdown, etc. They’re USA West Coast based but have at least one branch in most major US cities.

In general, a big bank like Bank of America, Chase, Citi, Wells Fargo, etc. don’t have much of an incentive to work with you as a small (freelancer) business.

One other thing I’ll suggest – once you’ve identified the (hopefully smaller) bank or credit union you want to work with, go to a branch office so you can personally meet a banker (or even the branch manager) to start building a relationship – “relationship banking” is the relevant term here.

When I started freelancing I didn’t think there was much of a difference between banks. I’ve since learned that a mainstream consumer bank, in general, is not in your corner as a freelancer.

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I’d recommend that having a personal line of credit (PLOC) is essential.

Think of them as an unsecured line of credit that you can use instantly like a credit card cash advance but with a much lower interest rate.

If you have a number of accounts with a particular bank or credit union, start there first as they’ll already have a good idea of your financial situation.

A wise friend suggested that the best time to seek credit is when you need it the least.

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Absolutely! Personal baking makes all the difference!! Well said.

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great british baking show GIF by PBS

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