What Is a Bad Credit Business Loan?
Bad Credit Business Loans are designed for business owners with low credit scores or a history of defaults. These loans are typically short-term and may carry higher interest rates compared to standard financing options.
Running a business is challenging, and it’s common for business owners to have more credit issues than non-business owners due to past uncontrollable events. While a poor credit score can make obtaining a traditional bank loan difficult, it doesn’t mean you can never secure financing.
At Asset Funder, we assist business owners with less-than-perfect credit by providing solutions through our Bad Credit Business Loans.
Eligibility Criteria
- Active ABN
- Operating for more than 6 months
- Minimum monthly turnover of $5,000
To start the loan process, first determine the loan amount needed to achieve your intended purpose.
Our Loan Guide
$5k - $500k
Starts from 15.99% p.a.
3 – 36 months
-
Pre - approved time
2 - 4 hrs -
Unconditional approval & settlement time
24 – 72 hours -
Pay Cycle
Daily/ Weekly/Fortnightly -
Security
Depends on the loan amount.
Disclaimer - The information provided in this critical information sheet is for general guidance only. Please contact us if you require further details.
What you need to know?
Can be used for
- Buying stock/Inventory
- Paying wages/rent
- Expansion into branches or another unit
- Renovating business premises
- Other working capital needs
Documents required (low doc approval)
- Last 6 months bank statements
- Valid identification proof
Documents required (full doc approval)
- Financial statements
- ATO statement
What you should know about Bad credit business loans
Key Considerations Before Applying for a Bad Credit Business Loan
- Applying randomly with multiple lenders
- Providing dishonest or incomplete information
- Borrowing more than necessary
- Submitting applications in quick succession Allowing multiple credit checks
At Asset Funder, we work closely with our clients to find the loan best suited to their business needs while helping them avoid these common pitfalls. Simply complete the application form or send us a message, and one of our lending specialists will contact you to discuss your financing requirements.
Advantages and Disadvantages of Bad Credit Business Loan
Advantages
- Access funding even with bad credit
- Can use funds for many business needs
- Opportunity to improve your credit score
- Faster approval than traditional loans
Disadvantages
- Interest rates may be higher
- Late repayments could affect credit
How Much Can You Borrow with a Bad Credit Business Loan?
Without a strong credit history, lenders focus on other key factors when determining your loan amount:
- Financial Strength: For unsecured loans, lenders assess your business’s cash flow and ability to repay. Higher average monthly revenue can increase the loan amount you’re eligible for.
- Time in Business: Lenders often view a longer operating history as a sign of stability. Businesses running for more than a year are generally considered capable of managing additional debt. New businesses may start with smaller loan limits, which can grow over time with consistent, on-time repayments.
- Industry: Loan amounts can vary depending on your industry. Businesses selling directly to consumers (B2C) often receive payments immediately via cash or card, which lenders favour. Businesses mainly operating in B2B, where invoices and delayed payments are common, may be considered higher risk, potentially limiting the loan amount.
- Quality of Accounts Receivable: Timely payments from your customers can help secure a higher loan, as they indicate reliable cash flow.
- Value of Security: If you pledge an asset, you may secure up to 75–80% of the asset’s value. Acceptable assets can include vehicles, equipment, or business appliances.
Don’t let these factors discourage you. At Asset Funder, we understand that every business has unique strengths, and we help present them effectively to lenders so you can secure the financing you need.
Required Documents for a Bad Credit Business Loan?
Bad credit business loans up to $150,000 can often be approved with minimal documentation, including:
- Bank statements from the last 6 months
- Valid identification
For larger loans or detailed assessments, additional documents may be required:
- Financial statements
- ATO statements
- BAS statements
Tips to improve your credit rating
It’s important to take proactive steps to strengthen your credit score. Here are some strategies to help you achieve that:
Avoid Shopping Around
Submitting applications to multiple lenders increases the likelihood of multiple credit checks. If any application is declined, these checks can negatively impact your credit score, making it harder to secure financing in the future.
Make On-Time Payments
Ensure all bills and loan repayments are made on time, including utilities like gas and electricity, as well as rent or mortgage payments. Timely payments positively impact your credit file and help improve your credit score.
Communicate with Your Lenders
Lenders usually evaluate a company’s cash flow and ability to service a loan when deciding on the loan amount. Businesses with higher average monthly income may qualify for larger loan amounts.
If you’re struggling to meet repayment terms, contact your lender. They may be able to set up a payment plan to help you through slower periods, preventing missed payments and avoiding a default on your credit file.
Steps to Apply for an
Unsecured Business Loan
1. Check your
Eligibility
Check your business’s basic loan eligibility and complete the application form in just 60 seconds.
2. Submit your
application
Once you submit your application form, we’ll contact you to discuss your business needs and guide you on the documents required.
3. Get an approval as quick as in 24hr
Once we have all the required documents, we submit your application to the most suitable lender and can secure loan approval in as little as 24 hours.
