Being your own boss has its benefits – but not everything is easier when you work for yourself.

Take personal finance, for example. Like many other people, you may need a bit of extra cash to buy a car or upgrade your home – but it can be tricky to secure a loan when you can’t provide a salary certificate.

And, with thousands of people either owning a business or working as contractors for another company in the UAE, many people are in the same predicament.

[Compare UAE personal loans for self-employed | Compare UAE car loans for self-employed | Compare UAE mortgages for self-employed | Non-listed companies]

So where do you turn? The same place most people go when they need to borrow some cash.

Jitendra Gianchandani, chairman and managing partner of Jitendra Consulting Group, says: “In the case of a self-employed person, a personal loan (or a business loan as it’s commonly called) should be taken from the bank.”

The downside is that banks generally require three years of audited reports to consider extending a loan to the self-employed, he says.

Higher interest rates, lower tenures

Interest rates are also often higher than those offered to salaried employees, at around an 8 to 11 percent flat rate.

Self-employed individuals must submit bank statements of six months to one year along with their trade license and some other small documents, says Mr Gianchandani.

Although there are banks out there willing to lend to the self-employed, all banks have different ceiling loan limits, interest charges and tenures for the loan, so it is best to shop around.

Minimum balance vs salary

Although there is no minimum monthly salary requirement per se, you need to have been in business for three years, a balance of AED 360,000 in your personal account with Mashreq and an annual business turnover of AED 1.5m. Generally financing offers a minimum balance to be maintained for the self-employed, as opposed to a salary.

A number of entities are eligible under Mashreq’s terms, including a limited liability company (LLC), sole proprietor, partnership, free zone company and branches or subsidiaries of offshore firms. To apply, you need to fill out an application form along with a copy of the trade or professional license, passport with residence visa, utility bills, a signed memorandum and articles of association of the business, six months’ bank statements of the business and 12 months’ personal bank statements.

Other banks out there offer better interest rates.

Different options for professionals (services)

Emirates NBD, for example, offers a lower loan ceiling amount than Mashreq, at AED 300,000 over 48 months, but a better interest rate at 18.99 percent reducing rate (advertised – equivalent flat rate is 10.01 percent) per annum for professionals who have their own practices (such as doctors or lawyers) or 19.99 percent reducing (11.01 percent flat) for the ‘non-professional’ self-employed.

To take out a personal loan with Emirates NBD, however, your account should have a monthly average balance of AED 25,000 maintained over six months as a ‘non-professional’, AED 20,000 as a professional.

[Emirates NBD personal loan for professional self-employed | Emirates NBD for other self-employed]

Or there is Dubai Islamic Bank, which currently offers a very competitive interest rate of 10.4 percent flat rate (advertised rate – equivalent reducing rate is 18.87 percent) per annum, with a maximum loan amount of AED 1m over 48 months, but for salaries of AED 50,000 per month as a minimum in the last six months.

Self-employed people may not have as many choices as those who receive a salary each month, but there are options out there. Just be sure to compare them all to get the best deal.