How to Provide Proof of Income as a Gig Worker

Most lenders ask for proof of income when you apply for a loan. For people with traditional employment, meeting this requirement is as easy as showing their last few pay stubs. While showing proof of income as a gig worker can be a little more challenging, the good news is it has gotten much easier over the years as more people earn a living through non-traditional means.

Start by Locating Your Tax Returns

Submitting tax returns to your lender legitimizes your gig work and shows that you earned a profit from it. If you have worked independently for at least a few years, showing a pattern of increasing income can be especially helpful. Your lender may ask for tax returns from the last two or three years depending on the size of the loan request.

Prove Your Cash Flow with a Year’s Worth of Bank Statements

Bank statements can work to your advantage in obtaining a loan, but it can complicate matters when you have your personal and business finances mixed together. If you receive most or all income through independent contract work, consider establishing a separate account to track income and expenses. That way you just need to print statements from that account to show as proof of income, expenses, and positive cash flow when you apply for a loan.

Use an Online Accounting Service to Track Income and Expenses

Investing in an inexpensive cloud-based service such as FreshBooks or QuickBooks can help you keep track of income and expenses in real time. These types of services also make it easy for you to print various types of reports such as a profit and loss statement or an income statement. Some also provide the option to generate your own pay stubs, which makes things as simple as possible to verify your income for borrowing purposes.

You May Not Need to Prove Income if You Have a High Credit Score

Some lenders are satisfied that a high credit score means you can afford to repay the loan you are requesting. However, you should not go into a loan situation expecting this. If you know you will be applying for a larger loan in the next few months, consider obtaining your credit report and score to see where you stand. Having a credit score in the very good to excellent range can provide you with greater negotiating power when it comes to interest rates and repayment terms.

About the Author: Lisa Kroulik has worked as a freelance content marketing writer for 10 years. She loves the work and the lifestyle it affords. Learn more about Lisa’s work and availability through Writer Access.