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Bad credit business loans

Your credit history doesn't have to lead you to a dead end. Find the way forward with a bad credit business loan.


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When you apply for a business loan, your business's credit history is one of the most important factors a lender considers. It's an indicator of your business's financial performance and its history of managing financial commitments. So, if you have bad credit history it can result in your loan applications being denied. However, this doesn't eliminate your chances of securing finance altogether. That's where a bad credit business loan comes in.

Expert overview: The 3 things you should know when getting a business loan with bad credit

  • Lenders consider the financial standing of the business itself as well as its directors, so having bad credit won't necessarily prevent you from getting a loan.
  • Having bad credit makes it more difficult for you to get finance from high street banks, but there are a number of smaller lenders who will consider your application.
  • Bolster your application with a business plan, detailed financials and financial forecasts for the best chance of getting approved.

What is "bad credit" and can I still get a business loan?

There's no one definition of bad credit, especially when it comes to business loans. Lenders will generally look at the personal credit histories of company directors, and if the business is established they may also look at the business's credit file and credit score.

If you personally have bad credit, that is, default listings, missed or late payments, multiple credit enquiries or just a low credit score, you may find it difficult to be approved for a business loan. Difficult, but not impossible.

Business loans and your credit file

What's the difference between a personal and business credit file?

Both your personal and business credit file contains information that helps lenders and creditors determine whether they want to do business with you. Your personal credit file also contains information of your commercial undertakings.

  • Personal credit file. This includes your name and other personal information, details of consumer and commercial credit accounts you've held, any negative listings such as defaults or missed payments and information on the public record such as bankruptcies and court judgements. You will also have a personal credit score.
  • Company credit file. Your company's credit file will include the company's structure and its shareholders, the company's credit information including applications and defaults, any business events that are lodged with ASIC or details lodged with the Personal Property Securities Register will be included, as will a company credit score.

How can I get a business loan with bad credit?

Traditional banks may be tough on businesses with bad credit, but alternative financial lenders tend to have more relaxed criteria. You could also apply for a different type of loan or put up business or personal assets as collateral.

Secured bad credit business loans

If you apply using assets as collateral, the lender may be more ready to approve your application. Here are a few things to keep in mind when applying for a secured business loan:

  • Assets such as business equipment, vehicles, property and funds in savings accounts can be used as collateral for a secured business loan.
  • These kinds of loans are generally granted by banks. Terms and conditions differ, so it's a good idea to shop around for the loan that best suits your budget.
  • Since your application is fortified with collateral, you generally benefit from more competitive interest rates and flexible repayment terms.
  • If you can't make your repayments, the lender will sell your assets to cover what you owe.

Alternative lenders

Following the proliferation of small and medium businesses in Australia, there has been a growth in the number of alternative financial lenders offering loans to business owners with less-than-perfect credit or with no security.

Here's why many business owners turn to alternative lenders:

  • They offer a selection of small, short-term loan products.
  • Bad credit history isn't a determining factor, you just need to show that your business has the capacity to repay.
  • Repayments are made over a shorter period, and responsible borrowers can be rewarded with better rates the next time they apply for a loan.
  • Loan terms are tailored to what you can afford.
  • Alternative lenders don't require security for the loan amount.
  • The application is quick, often with same-day approval.
Data indicated here is updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Valiant Finance Business Loan Broker
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Prospa Business Loan
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least twelve months trading history and a monthly turnover from $6,000 is necessary.
Max Funding Unsecured Business Loan
1 month to 1 year
$0 application fee
An unsecured business loan from $2,000 that offers convenient pre-approval and no early repayment fees.
OnDeck Business Loans
6 months to 2 years
3% of loan amount
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
ANZ Secured Business Loan
Up to 15 years
Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.
Westpac Business Loan
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
ANZ Unsecured Business Loan
Up to 15 years
Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.

Compare up to 4 providers

Invoice factoring

If you have outstanding invoices that are locking up your cash flow, you can consider invoice factoring. Invoice factoring involves selling your unpaid invoices for a fee in order to receive the outstanding payments more quickly. This option is becoming increasingly popular amongst business owners because:

  • Bad credit history isn't a factor.
  • No real estate is required as collateral.
  • You have the option to finance some or all of your invoices.
  • You can enter into an ongoing arrangement with the factoring company.
Data indicated here is updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Timelio Invoice Finance
Up to 4 months
Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.
ScotPac Invoice Finance
From 1 year
No set amount
Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.
ScotPac Selective Invoice Finance
1 to 3 months
Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.

Compare up to 4 providers

Even with bad credit history, you can get the cash boost your business needs with terms to suit your financial situation.

Bad credit doesn't lock you out of finance in Australia, but it's important to compare your options to find the right type of finance available to your business.

How can I compare my bad credit business loan options?

There are a few options you can consider for your business, but as any business venture is a serious undertaking, it's important to opt for the best one for your needs. Here's how to find it:

  • Flexibility to match your business structure

    Business loans vary in terms of their flexibility, with each of them offering a variety of different repayment terms, loan amounts, top-up options and other features. Make sure you understand what your business needs before you select the type of loan you're applying for. Your cash flow estimates should show when periods of fluctuations should occur, and therefore what type of repayment structure and loan type may suit you best.

  • Loan term

    While banks tend to offer minimum loan terms of one year with standard business loans, alternative lenders have been offering terms as short as three months, giving you a range of terms to choose from. You also have line of credit loans and overdrafts to add into your comparison, which each having no set terms.

  • Eligibility criteria

    Bad credit loans will come with more flexible criteria but you still need to ensure your business meets the minimum criteria that are set. Check for minimum monthly turnover and a minimum operating period for non-startup loans.

  • Features to match your needs

    Deciding what your business needs out of the loan should help when you're comparing your options. If you are a startup, you may be unsure of your cash flow projections and so want the ability to top-up your loan. If you're taking out a loan to buy stock that will be sold in the next six weeks, you will likely not want a loan with terms longer than a year. Consider the purpose of your loan, your business's financials and then compare your options by features that will suit.

Questions we've been asked financing a business with bad credit

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10 Responses

  1. Default Gravatar
    DesleyJuly 26, 2019

    I have a business loan on my property. I have a for sale contract on it, once I pay out my loan, I will clear $215k. I have only been working for 3 months in my new casual job and 3 years previously in my last job, but I am having trouble on finding someone to give me a credit card. Is there any bank/credit unions that would be flexible to help me? As I need the credit card to help with my move.

    Thank you.

    • Avatarfinder Customer Care
      JeniJuly 27, 2019Staff

      Hi Desley,

      Thank you for getting in touch with Finder.

      Sorry to hear about your difficulty in finding a credit card issuer to apply with.

      Since you mentioned that you currently have a business loan, if your loan was with a bank, you may ask them about applying for a credit card. If you are self-employed or working part-time when applying for a credit card, you may need to provide your accountant’s information and previous Tax Assessments in order to verify your income. You may try credit card providers on this page. Please make sure though to read the eligibility criteria, features and details of the card, as well as the relevant PDS/ T&Cs of the card before making a decision and consider whether the product is right for you.

      You may use this page as a guide on how your credit card application will get approved.

      I hope this helps.

      Thank you and have a wonderful day!


  2. Default Gravatar
    IanApril 2, 2019

    I owe 57000 to a bank, but i’ve lost my job if i want to get a business loan in the future am i able to

    • Avatarfinder Customer Care
      MaiApril 3, 2019Staff

      Hi Ian,

      Thanks for reaching out.

      You can still get business loan even if you have a bad credit however, you may find it difficult to be approved as the lenders will be looking at your credit file and check your credit worthiness.

      The article on this page provides guidelines on how you can go about getling a business loans despite having a bad credit. It also discusses what can be the alternatives in case you gets declined.

      Hope this is helpful.

      Kind Regards,

  3. Default Gravatar
    TanyaOctober 16, 2018

    I would like someone to talk to about purchasing an existing business

    • Avatarfinder Customer Care
      JohnOctober 17, 2018Staff

      Hi Tanya,

      Thank you for leaving a question.

      You may visit this link to see a panel of lenders who you could speak with regarding your query. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” or “Enquire now” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.

      Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!


  4. Default Gravatar
    MariaAugust 15, 2018

    I want to purchase an existing business. The owner is willing to pay 10% for me to obtain a business loan. The financials show 500k for 2 locations. Will a lender consider this if I am 1 year out of a chapter 7?

    • Avatarfinder Customer Care
      JoshuaAugust 26, 2018Staff

      Hi Maria,

      Thanks for getting in touch with finder. I hope all is well with you. :)

      There are different things that a lender assesses when determining your eligibility for a loan. Even if you are one year of out bankruptcy, you might still be able to be approved for a loan provided that you have met other requirements. The bottom line is that if you can prove to the lender that you are able to make repayments then your chance of getting approved will increase.

      Of course, there are things you can do to ensure that you get a loan. For one, if you have a property which you can use as a security, then that would decrease the risk of lending you money. You may also want to present a business plan, detailed financials and financial forecasts to convince even further your lender to give you the funding.

      Aside from asking traditional banks, you may also try other financial lenders who might be more lenient when approving loans.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!


  5. Default Gravatar
    KateMay 7, 2018

    I want to purchase an existing business. I have no collateral but my parents have offered to use a property as collateral for me. Will a lender consider this? I have financials for the business for the last 5 years and it turns over 700k pa.

    • Default Gravatar
      ArnoldMay 8, 2018

      Hi Kate,

      Thanks for your inquiry

      Yes, there are lenders that will allow you to apply for a business loan with a property as a collateral with the owner’s consent. Please check your options for business loans by clicking on this link. Please note that eligibility requirements vary between lenders, it would be best to check them out before applying.

      Hope this information helps


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