5.6 C
New York
December 1, 2023

What Are the Loan Options for a 1099 Contractor?

Being a 1099 worker has many perks, but it has its financial uncertainties. You will have more creative freedom over your business and working hours. But the client base will always be random and sporadic. So, your income will always be unpredictable.

During slow months, 1099 workers often find themselves looking for financial help. Lenders will put them through more scrutiny as 1099 workers don’t have a fixed salary. A 1099 worker will be required to produce more documents to back their claim of being able to repay the loan.

What Is a 1099 Worker?

Businesses and companies usually temporarily hire 1099 workers or independent contractors when needed on a project-to-project basis. So, contractors typically get a flat rate or are paid by the hour.

1099 Worker vs. Self-employed

1099 workers and self-employed people may appear the same, but they are not categorized together. Contractual workers can be classified as self-employed, but self-employed people aren’t always contractual workers. Lenders will group small business owners under the self-employed umbrella.

How To Get a Loan as a 1099 Contractor Worker

Finding a suitable loan option with the terms you want as a contractual employee is overwhelming. But with proper research and resources, you can still find competitive options in the market. Listed is some valuable information compiled by us to help you understand what options are available for a 1099 worker and what you may need.

  • Small business administration loans

SBA loans are available only for small business owners and sole proprietorships. If your business has been registered for over two years and you have a good credit score, you will be eligible for SBA loans. The terms and interest rates are usually competitive for such loans and may be a good fit for your business.

  • Lines of credit

A line of credit is a revolving credit loan with a high approval rate. There are two types of lines of credit; business-related and personal lines of credit. You can use a business line of credit only for business-related expenses, while a personal line of credit can be used for all expenses, whether business or personal. It’s easy to get accepted for a loan application, but remember that lenders will charge a higher interest rate.

  • Payday loans

These are suitable only for short-term, quick cash needs. Payday loans offer small amounts, and you will be required to pay off the entire debt before your next payday, which means you have about 2 to 4 weeks to pay off the loan.

  • 1099 income contractor loan

A 1099 contractor loan is meant to help 1099 workers and other self-employed individuals find secure loans. Since they are explicitly meant for self-employed and contractual workers, you can qualify for loans at much more flexible terms. After the pandemic, an increasing number of lenders have come forward to offer various 1099 contractor loan options. If you are struggling, it would be wise to look these up and see if they suit your situation.


If you are a 1099 worker having trouble making ends meet, getting accepted for a loan can be difficult. We hope this gives you a nudge in the right direction and helps you find a suitable loan option. Most of the loans we have listed here require a stable income and decent credit score, but most lenders can accommodate depending on your income. Remember that some of these will have a higher interest rate than others and that the rates can change depending on your credit score and history.

Related posts

Get Fast Cash With Slick Cash Loan: Personal Loans For Bad Credit Up To $5000

Jake Theodore

Demat Account for Small Investors: Is It Worth It?

Jake Theodore


Jake Theodore