Credit for single mothers bad chances with banks

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Single mothers have to struggle with a difficult balancing act: since they have to take care of a child on their own, they have high financial needs. However, the time window is limited due to child-rearing obligations. Single parents have at best a part-time job. The income is not sufficient in many cases. Weak incomes, moreover, make it difficult to obtain a loan. We tell you how your chances of getting this are best.

"Can you even get a loan as a single mom?"

In fact, the greatest chances of getting a housewife loan on the Internet are if you are a single parent (we will discuss this further later in the article). In the branch or direct bank you trust, on the other hand, you will have great difficulty in obtaining an appropriate loan. What can be decisive reasons for this, we would like to present to you.

Reasons why single parents find it more difficult to obtain a loan from Haubank

Branch banks usually do not give loans to single parents due to creditworthiness problems. Credit repayment ability is insufficient in their eyes.

Most banks calculate those according to the following formula:

From the monthly income, all expenses of whatever kind (food, rent, electricity, savings reserves, etc.) are deducted.) deducted.

In addition, the potential credit rate is subtracted.

Now there must be a surplus of 150 euros on average (the value of most savings banks), or at least 100 euros left over.

Income of single mothers leads to problems in credit rating calculation

For single parents, the expenses for the child are also deducted.

This causes the following problems that you should know about:

Child support may not be recorded as income
Child support may also not be recorded as income. However, some banks offset this against the expenses for the child
Unemployment benefits I and II are also not booked as income, the same applies to social assistance for the child
Banks also plan for an additional risk factor in the case of part-time employment, because there is a risk that you will have to give up your job to look after the child

If you are a single parent, your child dramatically weakens your credit rating. The extra money that could compensate for this actually does not help you because it is not recorded as regular income.

Online or bank branch? How do I get a loan as a single person?

Banks: guarantors and collateral as a requirement when single parents apply for loans

As a single parent, you can practically only get a loan from a bank with guarantors. It is also often required that it is a full guarantee: The guarantor must accordingly agree to repay the entire loan in case of need.

Theoretically, there is also a chance that you will receive the loan through collateral. For example, they can pledge real estate property. In practice, however, it has been shown that most single parents do not have the necessary collateral.

Even if this is the case, a guarantee is more advisable: this way, you do not immediately lose your home in case of a failed repayment. The use of home ownership should therefore only be the very last resort.

Interest rates are usually slightly higher for single parents

Interest rates for a loan granted to single parents are mostly slightly higher without a guarantor. This finding is generally valid. Every lender knows about the increased risk of a corresponding loan and hedges this by higher interest rates.

Individual credit check in the online loan allows single parents better credit opportunities

If you need an online loan for single parents, it is advisable that you research other creditworthiness requirements. Make sure that money you receive as financial support (z.B. Child support, alimony and government payments such as z.B. Housing and parental allowance) are taken into account as fixed monthly income, as is the case with the online loan from VEXCASH.

Especially if your financial needs are comparably low and you only want to borrow a small amount of money, you can check your credit chances with us without obligation, without this having an impact on your Schufa score.

Corona crisis: cabinet goes all out in generous support package

On Tuesday evening, 17. March, the Cabinet presented a comprehensive support package to help Dutch businesses and self-employed people get over the Corona crisis. "Special times call for special measures," Hoekstra said. The support package serves to maintain the liquidity of companies on the one hand, and to avoid mass layoffs on the other. On this page we will keep you informed about the regulations and the consequences for you as an entrepreneur.

Attention: This page was last updated on: 18. March at 6.00 p.m. Of course, the facts and specific situation play a big role in formulating the right answer to the question. Want to be sure what rules apply or what you can do in a specific situation at your organization? In this case, please contact us using the contact details at the bottom of this page. We are happy to help you!

In a nutshell: The measures in place

The Cabinet introduces a new, much more comprehensive working time reduction scheme to replace the old one: The Emergency Employment Bridging Fund (NOW). The condition is that companies do not lay off their employees during this period and continue to pay their wages. The scheme also applies to flexible workers and people on zero-hours contracts.
The approximately 1.2 million self-employed in our country will also receive help. This scheme, which is valid for three months, supplements the income of self-employed persons up to the social minimum income (social assistance level). They do not have to repay this amount.
All entrepreneurs can apply for a special deferral of tax payments. Collection by the tax office will then cease immediately, and the application will be assessed with retroactive effect.
For the next three months alone, the government is making ten to twenty billion euros available for these measures.

Measure 1: The working time reduction (wtv) scheme will be replaced by the temporary measure of the emergency bridging fund.

As an entrepreneur, do you expect a loss of sales (at least 20%)?? Then you can apply to the UWV for a wage subsidy for a period of three months (maximum 90% of the wage bill, depending on the loss of sales). The UWV will grant an advance of 80% of the aid requested. Retroactively, it then determines what the actual loss in sales has been. The scheme applies to lost sales from 1. March 2020. For large applications, this requires a declaration from an auditor.

The grant pays for the payroll of permanent employees as well as those on a flexible contract, as long as they remain employed during the application period. This period can be extended once for three months. This will allow you to continue to pay your staff. Read more about the Emergency Jobs Bridging Fund (NOW)>

Measure 2: Additional support for the self-employed

The Cabinet establishes a temporary simplified scheme to support the self-employed, which includes freelancers, so that they can continue their operations. The scheme is implemented by the municipalities.

The self-employed can receive support for three months in the form of supplementary aid for living expenses and/or working capital. Living allowance supplements income up to minimum social income and does not have to be repaid. One can also avail of a working capital loan at a reduced interest rate to absorb cash shortages.

In this temporary aid scheme for the self-employed, there is no need for an assets or partners check. The viability check that the Bbz (Decision Granting Aid to the Self-Employed) normally carries out does not apply, so requests can be dealt with quickly. This will provide income support for living expenses within four weeks (instead of the usual thirteen weeks) for a period not exceeding three months. It is possible to work with advances.

Measure 3: The emergency switch

An emergency switch is set up to provide aid for the first distress among entrepreneurs. This is in addition to the other measures listed in this letter. In particular, these are restaurants and other establishments that will have to stop most of their activities by necessity, such as beauty salons and others that may run into problems because of the 1.5 meter distance regulation. Their income largely decreases, while their fixed costs continue as normal and in many cases their expenses have already been incurred. This revenue will also be difficult to recover once the COVID-19 outbreak is over. However, the condition is that they are businesses that have a physical facility away from home. This is a one-time lump sum of €4000 for the period of three months, which only applies if your business meets all the above conditions in terms of type and industry. The conditions are currently being worked out and will be further updated if necessary.

Measure 4: Relaxation of a deferral of payment of taxes and reduction of fines

You can apply to the tax authorities for a special deferral of payments due to the impact of the Corona crisis. This is possible for all income tax, corporate income tax, VAT and payroll tax assessments.

In this application, you ask for a deferral of payments, stating that you are experiencing payment difficulties due to the Corona outbreak. You will automatically receive a deferral of payment for 3 months. It is possible that a deferral of 3 months is too short term for you. You can also apply for a longer deferment. In this case, you will need additional documents, possibly a certificate from an external expert.

You do not have to pay a possible fine for not paying sales or payroll tax on time. The legal interest rate, which normally kicks in after the payment deadline, is temporarily reduced from 4% to almost 0%. The rate of tax interest will also be temporarily reduced to almost 0%. This reduction applies to all taxes to which a tax rate applies. The cabinet will adjust the tax rates as soon as possible.

Reduction of advance tax payments

Expect a lower profit due to the Corona outbreak, and have already been imposed an advance payment for 2020 income tax or 2020 corporate tax? Then the advance payment can be lowered.

Other measures

Temporary relaxation of the BMKB scheme (guarantee credit) Under this scheme, the state guarantees 75% of an additional credit (loan or overdraft) granted to cover liquidity shortages. The maximum guarantee is € 1.500.000 and the term will not exceed 8 quarters. The guarantee commission is 3.9%, and the bank determines a risk premium and possibly a closing commission by application.
Temporary relaxation of the GO (guaranteed corporate finance) regime. The total budget for GO has been increased from € 400 million to € 1.5 billion. In this context, the government guarantees 50% of the new credit facility (bank loans and bank guarantees). The minimum amount per company is € 1.5 million, the maximum amount has been temporarily increased from € 50 million to € 150 million.
Qredits is an institute that grants microcredits. Qredits offers businesses a temporary deferral of repayments for a maximum period of six months. During this period, interest rates are also reduced to 2.0. The cabinet supports this measure in the maximum amount of € 6 million.
For agricultural enterprises in the agricultural and horticultural sector, there is also a temporary relaxation of the BL scheme (guarantee for agricultural loans for small and medium-sized enterprises). The guarantee is 70% of the credit with a maximum maturity of 8 quarters.
There is a coordination between the state and the municipalities about the possibility to stop local taxes (like tourist tax) and to withdraw already imposed tax demands. The state is also consulting with the cultural sector on supportive measures.

In the chamber letter about the emergency package for jobs and economy (NL) you can find an elaborated overview and the justification of emergency measures.

The generous business policy of the banks

In addition to the government's extensive support package, banks have also worked out joint measures to give business customers a little more leeway. Companies that are fundamentally sound can be granted a six-month grace period for their current loans. ABN AMRO, ING, Rabobank, Volksbank, Triodos Bank and BNG Bank have decided to.
The joint approach of the banks offers corporate customers of all sectors room for financing up to 2.5 million euros. For the group with a higher liability, banks will be watching closely for further developments. This may lead to further steps in consultation with the government and regulators. This is a minimum regulation under which banks can offer additional tailor-made solutions for corporate clients.
For the three major banks, ABN AMRO will go the furthest in suspending repayment obligations. For the above mentioned target group, not only the repayment obligation but also the interest payment will be suspended for a standard period of six months. If customers do not want to make use of this option, they must report it.
There will also be a provision for entrepreneurs who are at risk of having problems with their private financing (e.g., the government).B. of the mortgage for home ownership).

Both Rabobank and ING have opened an online portal where entrepreneurs can submit their request to defer repayment. Applications will be considered individually in the order in which they are received.

Who can you contact as an entrepreneur?

Banks can submit applications for the extended credit schemes (BMKB and GO) to the "Rijksdienst voor Ondernemend Nederland" (NL), the implementing organization of the Ministry of Economic Affairs and Climate Change. As a company, you can contact your credit institution in this regard.
With regard to the tax measures, you can contact the company office of the tax office (Belastingdienst Zakelijk) about Belastingdienst.nl/coronavirus (NL). The regulations of the Ministry of Social Affairs and Employment will be published as soon as possible.
For other questions about the coronavirus, you can take a look at Rijksoverheid.nl/coronavirus (NL) or to the website of the RIVM (NL).
Would you like to find out what the labor law consequences are for your employees? Frequently asked questions.
On our website you will find more information about the emergency fund to bridge the employment situation (NOW) and the consequences of the corona virus for your current contracts.

Prices in the U.S. real estate market continue to rise to new highs. (Image Michael Vi/Shutterstock)

Real estate markets are running hot. When the bubble bursts? Nordea Asset Management draws parallels to the subprime crisis.

History tends to repeat itself, which is due to a variety of mechanisms. Thus, central banks can tighten monetary policy too much, households can become too indebted, and capital can be allocated to the wrong sectors. At the same time, however, this opens up the possibility for investors to better manage their risks. Nordea Asset Management has summarized the lessons that can be learned from the subprime crisis in a market commentary.

After the U.S. recession in 2001, tax cuts and loose monetary policy supported growth and demand for Chinese goods, which was reinforced by an artificially weak renminbi. China and the BRIC countries (Brazil/Russia/India/China) rose by exporting deflation, while U.S. banks financed the purchase of increasingly expensive houses even for buyers with poor credit ratings. Banks simply bundled and resold these risky subprime mortgages on the market. Eventually, the real estate market collapsed and an enormous global credit crisis ensued. The question is whether the very expensive real estate market in China is now facing a similar turning point.

Is the house of cards collapsing?

The period after 2008 was characterized by a very loose monetary and, to a certain extent, fiscal policy worldwide, which in China led to a massive increase in investments in infrastructure and real estate. Financial assets rose, with the value of equities rising much faster than debt, reducing leverage. In the search for real assets, real estate, technology and eventually cryptocurrencies benefited tremendously. In China, for example, most of the wealth of private households is invested in the real estate market. With inflation now rocking the economy, the question is whether the house of cards will come tumbling down. As with the subprime crisis, various markets send out early warning signals.

This time it is (somewhat) different

China is unlikely to succeed in preventing the credit crunch, also because of the zero-covid strategy. In contrast, banks in Europe and the U.S. are far more tightly regulated than they used to be, and central banks are more concerned with financial stability, allowing them to influence the value of expensive assets by managing liquidity. The main focus could be on the very expensive real estate markets.

Stocks outside the U.S. are starting to look attractively valued to Nordea Aasset Management, while they are still far from fair value in the U.S. – apart from the tech sector, where many unicorns have already fallen sharply in value. At a time of continued economic and political instability, Nordea Asset Management recommends focusing on less risky companies that are cheap and offer a solid earnings path, such as Coca-Cola and Air Liquide.