Self-employed face ‘staggering’ declines in credit card and loan access as SEISS extends | Personal Finance | Finance
Self-employed workers have been applying for SEISS grants by the millions as coronavirus battered the economy. From today, claimants will be able to apply for a second and final grant from the scheme, which will be capped at £6,570.
In the coming months, workers of all kinds will likely need to try and get used to a new normal as the various support schemes come to a close.
The government has detailed that the majority of their measures will come to a close around October 2020, with Rishi Sunak repeatedly detailing that it is highly unlikely that they’ll be further extensions.
Hopefully, those who are self-employed will no longer need state support come October but they may face difficult times if they’re still struggling.
New research from ClearScore has revealed that the self-employed have struggled to gain access to personal loans and credit in recent months, a key part of many financial plans.
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As Justin Basini, the CEO and co-founder of ClearScore, detailed: “Our data at ClearScore shows that not only have the self-employed struggled with business grants and support from the government, the number of personal loans and credit cards available to those who are self-employed has dropped by a staggering 75 percent.
“On January 1 of this year, the average number of loan products a self-employed person could expect to see was 2.33, this has dropped to just 0.55 as of August 1.
“For the same time period, the average number of credit card products available has dropped from 17.36 to just 4.43.
“This massive reduction in the number of credit products available means that those who are already financially struggling with their business have even less access to emergency funds in the form of personal credit and may be pushed to seek more risky forms of credit such as payday loans.”
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The economy has been struggling with coronavirus for some time now but it has taken a bit hit recently as the UK officially entered a recession.
This, unfortunately, will impact the self-employed the hardest as Justin continued: “Those who are self-employed are significantly more likely to have had their working status affected by Covid.
“Over a third (36 percent) say they are now no longer working compared to an average of just 12 percent.
“They are also three times more likely to say they have applied for benefits (32 percent vs. 11 percent of the total sample).
The government also detailed that anyone who has been adversely affected by coronavirus should keep any evidence proving this.
This could include:
- business accounts showing a reduction in turnover or increase in expenditure
- confirmation of any coronavirus-related business loans they have received
- dates their business had to close due to lockdown restrictions
- dates they or their staff were unable to work due to coronavirus symptoms, shielding or caring responsibilities