Whether its past insolvencies, director bad personal credit score or company CCJ’s, certain business loan options may still be available. However your individual circumstances will dictate which options are available and will vary from business to business.

Also another important factor is what purpose the business loan is for. There are hundreds of lenders that specialise in specific types of business finance, with many of them willing to consider bad credit. The purchase of an asset like a vehicle or property may be easier than just general cashflow funding.

So read on the find out what options there are.

Can You Get Business Loan With Bad Credit?

The short answer is yes, you may be able to get business loan even if you have bad credit. However the longer answer is it depends on your circumstances. If you have assets to secure the finance against, then it will be much easier to find a supportive bank/lender.

What Types of Assets Can You Lend Against?

Any of the following might be used to provide security for a business loan.

Commercial Property
BTL Property
Main Residence
Vehicles – Cars, Vans, HGV etc
Equipment & Machinery
Debtor Book
Work In Progress (WIP)
Valuables
Stock & Inventory
Stocks, Shares, Investments
Other Businesses You Own
Third Party Guarantor

Its worth noting that any security you provide for a business loan, could be at risk of repossession if you fail to keep up with the payments.

What If I Don’t Have Any Assets?

If you don’t have any specific asset to secure against there are still a few options. However it would be very likely that you would need to meet the following criteria:

Business Trading More Than 2 Years
Annual Accounts Prepared
Making a profit (Profit & Loss)
Positive Net Worth (Balance Sheet)

Also if the owner/director(s) have a positive net worth, then they may need to give a personal guarantee for any lending. Understanding if its the business or business owners personally that have bad credit, is important in ascertaining what lending may be available.

Continue reading below to see what the different lending types are.

Speak To A Business Finance Expert

At Bolton Business Finance we are experienced at supporting companies across the UK with poor credit to secure funding. Get in touch today.

If you have bad credit and would like to speak with one of our funding experts please call 0161 5469128 or submit the quick contact form below.

Different Types of Loans With Bad Credit For Business

Lets take each potential option one by one and discuss what it is and what type of circumstances its available for.

If you have a CCJ, it may be worth reading our specific article “Business Loans With A CCJ“.

Unsecured Business Loans For Bad Credit

Perhaps the more difficult to get accepted for, an unsecured loan is most suitable for established businesses with minor bad credit. Some unsecured lenders will still accept applications from businesses with small CCJ’s or a small number of missed payments.

Secured Business Loans For Bad Credit

If you have sufficient equity in a property then this could be used to apply for a secured business loan or bridging loan. The property either needs to be mortgage free or have a mortgage usually under 50% LTV. There are many providers that will lend to businesses and individuals with poor credit who have security available.

Invoice Finance & Factoring With Bad Credit

If your business is owed money from its customers, then this is an asset that you can use to raise finance for your business. Invoice Finance (Factoring is a type of Invoice Finance) give you instant access to unpaid customer invoices. They do this by purchasing the debt and therefore can accept businesses with bad debt, as they have security.

Basics Criteria for Invoice Finance:

Trade B2B
Trade on credit terms e.g. your customer has 30 days to pay
Turnover Above £50,000 per year (or predicted for start ups)

Its also possible to do this against one single invoice if its over £10,000.

Commercial Mortgages

Provided you have sufficient equity or deposit (Usually minimum of 25%), then it may still be possible to get a commercial mortgage. If you have bad credit then you will likely have to pay a higher interest rate than normal.

Asset Finance For Bad Credit

It is still possible to get finance with bad credit for assets like cars, vans, trucks, equipment and machinery. This could be for a new purchase or to release money from existing assets a business owns. A new purchase will still usually require a deposit or at least 10% and to refinance there need to be sufficient equity in the asset.

Business Loans For Sole Traders With Bad Credit

The same options we have discussed above are usually available to sole traders as well as limited companies. There are some lenders that only deal with Limited companies but there are many that will accept sole traders.

Summary

In summary there are lots of different types of business loans and lending facilities available in the UK. A very wide number of circumstances are catered for and just because you have been declined elsewhere, does not mean nothing is available.

Depending on the reasons why you have bad credit, sector and turnover, will all have an effect on your available loan options.

Its recommended to speak with an expert commercial finance broker such as ourselves. This will help your quickly narrow down your search and find an appropriate bank or specialist lender.

Apply Below For A Business Loan

We can speak to you about your specific circumstances and access what finance options may be available to you. Regardless of your company or personal credit circumstances, we may be able to assist.

Call 0161 5469128 or fill in the form below

For a free no obligation assessment, fill in the form below.

Disclaimer

This post is purely for educational purposes and does not constitute advice.

EXCELLENT

13 reviews on

Gerad Barclay

2024-04-02

Exemplary Business Finance Service Bolton Business Finance and its MD Marcus Wright are professional and an example to others in the industry. Strongly recommended. Most business people searching for a business finance broker will have dealt with Estate Agents, Recruitment Agencies, or both. You know the types; recruitment “consultants” that try to palm you off with unsuitable candidates having doctored the CV to look great, or estate agents that assure you the enquirer is a “Cash Buyer” or in a fabulous position when in fact they have not even got an offer yet for their overpriced property. Many Business Finance Brokers are as above, probably worse. They work the numbers game of collecting applicants then punt the applicants around the types of lenders that want to tie you down with crazily high interest rates, unviable repayment terms and the ubiquitous PG. My advice is to look out for these shady practitioners. They want your personal ID, 6 months Bank Statements and annual accounts before even discussing solutions to your problem. They have only a passing conversational interest in your business. Be especially alert to the additional introduction “Fee” for getting to offer stage. One such broker added a 5% fee unto an already sky-high rate of interest front-loaded unto the principle, no reduction for early settlement, and of course the dreaded PG. Try getting 5% Interest per year on deposit of £200,000…. It is currently almost impossible yet, some brokers want 5% (£10,000 on that £200K) just for the introduction. That’s 3–5 times what Estate Agents will charge, and they typically must do some work and wait 6 months for the transaction to complete. The broker may well have punted your most personal details by email to any number of lenders leaving you exposed in many ways. Marcus did none of the above. He listened to the requirements. Noted preconditions, made no promises but came back very quickly with imaginative propositions. Very personal details and confidential information were requested only when there was agreement in principle. I will certainly use again.

Tyler Homeyard

2023-04-12

Great company to deal with. Marcus is a great guy and knows what he’s doing. They helped me with factoring my invoices on Courier Exchange. Very seem less process. Highly recommend.

TICS Global

2023-04-12

Fantastic speedy and attentive service.

Adam O'Rourke

2022-10-11

I've have never accessed commercial finance before and I was daunted by the process. Bolton Business Finance made the process simple, easy and fast. I've been funded and got exactly what I needed. Outstanding service, wouldn't hesitate to recommend!

Jamie Wynne-Griffiths

2022-10-05

What a top job. Absolute pleasure to work with Marcus. He understood exactly what we needed and didn't stop until he got it. Highly recommended!

Westhoughton Motors

2022-06-30

Great service, always kept updated and responded fast to any questions. Thanks to the team at Bolton Business Finance.

nasrat zamiri

2022-03-28

I had recently applied for Business Cash Advance facility through Bolton business finance. The process was easy and smooth, and received the requested funds within 3 days. Would highly recommend to any businesses who are looking for funding. Thanks Marcus

Matthew McClellan

2021-06-30

I recently approached Marcus at Bolton Business Finance to assist with sourcing and implementing a new invoice finance platform for my business. Marcus was professional and very knowledgeable from the very start and I would highly recommend his services. We will certainly be using Bolton Business Finance going forward.

michael walls

2021-03-15

Marcus arranged my CBILS loan and i found him a pleasure to deal with, no hassle , no fuss just gave me exactly what i needed ( sound advice ). Many Thanks