Freelancers Continue to Experience Multiple Financial Restrictions in EU

All eyes will be on Britain for the next two and a half weeks as the country prepares to leave the European Union on 31 October. This fact is in spite of various reports that are currently circulating, noting that the deal is essentially impossible after a call between Angela Merkel and Boris Johnson. While leaving the European Union will impact the general public in countless ways, freelancers will face more disruption than most other workers. Even if Brexit does not materialise, freelancers in the EU confront multiple restrictions, many of which are finance-related.

EU funding has various limitations

Although freelancers account for nearly 7% of the EU workforce, up to 63% of them feel that they should be considerably more supported by policymakers. At this point in time, the majority of funding schemes in the EU, including Horizon 2020 and Erasmus+, are unavailable to freelancers. Much to the chagrin of the countless hardworking, law-abiding freelancers across the EU, they are excluded from the bidding process. Most of the financial mechanisms in the EU are designed with companies or SMEs in mind, naturally excluding the subdivision of micro-enterprises who consider themselves as freelancers. It is vital that the needs of freelancers are considered by the various publicly-funded schemes in order to prevent them from being continuously disadvantaged.

Freelancers in need of more adaptable banking options

Apart from funding schemes not making provision for freelancers, many banks and other financial institutions do not either. This makes it increasingly difficult for any freelancer to obtain financial assistance in the form of credit or loans. Freelancers can improve their chances of being approved for loans by managing their finances and illustrating their capability to pay. Governments should, however, continue to labour alongside institutions in order to make financial services more accessible to the EU freelancing community. The private finance sector should also make a greater effort to aid self-employed individuals and freelancers to save money and take out loans.

Substitute financial structures can benefit freelancers

Where traditional banks often fail freelancers, alternative financial service providers are picking up the slack. A little over a year ago, Qonto, the digital bank for SMEs and freelancers, secured an additional €21 million in funding from existing shareholders Alven Capital and Valar. Moreover, European Investment Bank (EIB) joined as a new investor. Qonto offers tailor-made business accounts to all freelancers together with fair and transparent prices as well as an ultra-modern interface. N26 is another financial institution that caters to freelancers. The Berlin-based bank offer freelancers and other self-employed individuals business accounts with lucrative benefits, such as free global card payments and cash back.

While it may be tricky to open a business banking account and get approved for a loan as a freelancer, it is by no means impossible. Until traditional banks embrace EU freelancers more readily, there are alternative ways in which financial assistance can be obtained, though not without challenges.