See which lenders will give you the best bad credit business loan. Instant online results.
This is a totally free process and will not affect your credit rating.
Borrow from $5,000 to $500,000
Fixed or variable interest rates
Repayments to suit your budget
Terms from 1 month to 5 years
Secured & unsecured options
Own a business and have an ABN
Business is GST-registered
Permanent Citizenship or Residency
Minimum business-operating time of six months
Can provide business bank statements
Bad credit business loans are a type of short-term business finance designed for businesses (and business owners) with a poor credit score or a history of defaults or dishonours. A bad credit history presents a greater risk to lenders, so interest rates will often be higher than other forms of finance.
A bad credit business loan in Australia is similar to an unsecured business loan — lenders will generally look at the credit history and revenue of the business to determine whether it is eligible for a loan. They can provide access to funds when a business is unable to obtain finance approval elsewhere.
If you are approved:
A lender will provide you with access to funds.
You will have immediate ownership of anything purchased.
You will make regular repayments to the lender for a fixed period of time.
Some lenders will consider applicants that have been recently discharged from bankruptcy, usually for a minimum of six months. There will be fewer lenders to choose from, and you should expect higher interest rates and fees reflective of the increased risk to the lender.
You may also need to supply collateral, or be asked to include a guarantor on your loan.
Before you apply for a loan following bankruptcy, consider:
How your assets and income have been affected by bankruptcy
Can you show lenders that you are able to meet your repayments?
What will your repayments be and how will they work with your budget?
Are there any other finance options available to you?
The approval process for bad credit business loans is similar to other types of small business loans, but puts greater focus on your ability to prove you can repay your loan and how the money will benefit your business.
To increase your chances of approval, you should prepare a business plan to illustrate:
How you intend to use the funds to grow or support the business
Financial projections for the business following funding use
Details of business expenditure and how you plan to successfully repay the loan
Interest rates on bad credit business loans can range anywhere from 15% to 35%. The actual rate applied to your loan will be dependent on a number of factors, including:
The trading history of the business
The reputation of the business with suppliers and customers
The credit history of the business
The length of the loan period
The value of any deposits or security — if any — used on the loan
The amount a lender will approve for a bad credit business loan will greatly depend on how much your business can afford to borrow. Depending on your risk profile and your capacity to service your repayments, you may be able to borrow between $5,000 and $150,000.
This can be a good way of improving your credit score and building trust with a lender. For example:
Your business wants to borrow $50,000
A lender may only be comfortable approving a $20,000 loan
You show that you are capable of repaying the $20,000 loan
The lender may increase the amount of available credit for future loans at a lower interest rate.
Most lenders will offer a bad credit business loan for a term of 1 - 12 months. The shorter terms compared to other forms of business finance are due to the increased risk presented to the lender.
Money.com.au aims to clear up the confusion around rates and approval, so we can provide the best consumer experience possible. We only show you real, personalised rates from lenders who can give you approval on the loan. No hidden fees, no inflated rates, no stress, and no impact on your credit score.
Just real rates, from real lenders, who you can apply with immediately to get real deals. (Yes, really!)
Bad credit business loans are generally used by individuals who have either defaulted on a previous loan or have some negative history on their credit file.
They can also be used by the director of a business when personal or business assets are tied up due to court proceedings — such as divorce — or if the director has a poor individual credit score.
Due to the higher risk in this type of lending, qualifying criteria may often be more rigid than with other types of finance.
In Australia, this type of business finance is often used by:
Business directors involved in a Part IX agreement
Business directors with a poor individual credit score
Businesses where assets are tied up in court proceedings or cannot be accessed
The qualifying criteria are similar to an unsecured business loan. Most lenders will be able to provide options if you have:
Been trading for at least 12 months; and
Have an ABN (Australian Business Number); and
Are registered for GST
However, you can still apply if you:
Are a sole trader
Have been trading for between 6 - 12 months
The fastest approval speed will be offered by specialist lenders. Often, you can apply online and receive approval and finance within 24 hours.
These lenders also offer a streamlined method of applying; many will allow you to compare offers and apply using our simple, online smart form.
However you choose to apply, you will need to demonstrate the ability to service your finance amount, and meet individual lender criteria, such as:
An ABN and GST registration
An acceptable credit rating
A minimum level of turnover
A maximum level of other debt
As this type of finance presents a high level of risk to a lender, they will often require more extensive documentation to assess your application. Here’s what you may need to provide to a lender when applying:
Proof of identity
An ABN and GST registration
An acceptable credit rating — the lender will ask to conduct a credit check
Business bank statements
Trust Deed if the business is held in a trust
Australian Tax Office (ATO) Portal access
Financial records (provided by your accountant) including Profit and Loss Statements and Balance Sheets
Money Tip: Business finance brokers operate all across Australia, and you can find one of these experts to help you with a bad credit business loan whether you're located in Melbourne, Brisbane, Sydney, Adelaide, Perth, Newcastle, or Canberra.
Bad credit business loans allow businesses in Australia to access cash that may not be available through other forms of finance.
Gives a borrower fast access to cash
Is often only assessed on the cash flow strength of a business
Will likely have higher interest rates and fees than other forms of business finance
May not require any collateral or security
Can be obtained from banks, non-bank lenders and through finance brokers
May require a personal guarantee from the director of the business