Bad Credit Business Loans
Get approved for your business loan even with bad credit.
- Borrow from $300 to $5,000
- Outcome in 60 seconds
- Flexible Repayments
- 100% Online
Fact checked
It is common for businesses to want to capitalise on promising opportunities with their finances, but many could struggle to produce the required funds and carry an imperfect credit rating that may hinder standard loan applications.
Whether you’re aiming to start a new business or continue to expand your existing one, bad credit business loans can be a great way to access the funds which you need to make your business finances work for you.
Read about how to successfully find a lender that can offer you a bad credit business loan and how to maximise your chances of approval here.
Can I get a bad credit business loan with guaranteed approval in Australia?
No – there are no lenders who can offer guaranteed approval for bad credit business loans, as this represents too great of a risk for them to take on and also risks placing unreasonable financial burdens upon those in untenable positions. Despite this, though, bad credit lenders still provide an option for business owners in need of financing.
Bad credit business loans work the same way as regular business loans; however, they are designed specifically for businesses which have poor credit scores, have owners under Part 9 Debt Agreements or have assets frozen due to legal proceedings. These loans are generally offered by specialist, online lenders whose focus is on providing fast solutions for businesses or individuals who need extra funds to launch or continue to operate their business.
Because these loans are essentially the only option available to individuals or businesses with poor credit histories, you will find that the associated fees and interest rates will be higher than a regular business loan. You will also be more limited in terms of your borrowing range, although providing security can increase this significantly. Despite this, though, bad credit business loans provide a pathway for business owners to obtain the financing they need to help run their business.
How do I maximise my chances of approval for my bad credit business loan?
There are several methods you can employ to vastly improve your chances of having your application for a bad credit business loan improved. Some of these methods include:
Applying for a joint business loan
If you have an associate with a strong credit score, you could consider applying for a joint loan. This provides lenders increased confidence in your ability to repay your loan and could result in not only having a higher chance of your getting loan getting approved, but also a more competitive interest rate.
Only apply for what you can manage
By choosing a loan term and borrowing amount that is most suitable for your business’ projected cashflow, your lender will see how you are able to meet your repayment obligation and will be more likely to issue you credit. This might mean opting to repay your loan over a longer period of time where possible or borrowing a smaller amount for your business, which can make your monthly repayments are more manageable.
Provide security
If you are in a position to provide an asset as security, you will be able to improve your chances of having your application approved. Such assets can be either personally owned or owned by your business and can include your family home, other investment properties or commercial assets such as shopfronts or machinery.
Take steps towards improving your credit score
Ensuring that your credit score is as strong as possible before applying for your business loan will improve your chances of being approved. You can do this in the lead up to your application by ensuring that your personal and business bills and rent are paid promptly and that your credit limits are lowered.
Formulate a strong business plan
By providing your potential lender with a thorough business plan and financial forecasts for your business, you can clearly demonstrate that your business will be able to make its repayments and give confidence to your lender that you are fit to receive your loan.
What affects your approved borrowing range on a bad credit business loan
Your business’ current and future outlook
If your business already generates solid revenue and you can present a business plan that clearly demonstrates that this is likely to increase, or your balance sheet shows assets that can be sold off to cover debts if the need arises, your potential borrowing amount will increase.
Using assets or guarantors as security
By providing your individual or business assets as security for your loan or including an associate to act as your guarantor, your lender will be able to offer you a greater amount of credit. Assets that can be used as security for a bad credit business loan include residential properties, commercial properties and commercial equipment such as machinery or vehicles.
The purpose of your loan
Depending on what you plan to spend your funds on, your lender might be more willing to lend you a greater sum. For example, if your loan is taken for the purpose of buying a new asset for your business such as a vehicle or commercial machinery, your lender may increase your borrowing limit to reflect these needs. Conversely, if your borrowed funds are going towards covering smaller expenses such as staff wages for a handful of other employees, they will have no incentive to lend you more than the necessary amount.
Your personal financial situation
If you are planning to borrow for a new business, then by demonstrating that you are in a strong financial position personally, you will be likely to be able to borrow a greater amount. You can demonstrate this by showing bank records that display a steady, meaningful income and savings, making sure that all of your bills and rent are paid on time, and that you have no extraneous outstanding debts. Lenders won't approve unsecured loans without personal credit checks, so it's an important factor to consider.
