Business loans with bad credit

By Bhavi Chadha · Updated 25 October 2026

A past default or low credit score doesn't always rule you out. Some non-bank and private lenders look beyond your credit file, especially if you can offer property as security.

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In a nutshell

You can sometimes get a business loan with bad credit. Banks rarely lend after recent defaults, but some non-bank lenders weigh your current cash flow more heavily than your credit file, and private lenders focus mainly on property security and the exit. Expect a higher cost, smaller amounts if the loan is unsecured, and questions about what happened. Property security, steady revenue, up-to-date tax lodgements and a clear explanation all improve your chances.

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At a glance

Banks: Rarely, after recent defaults
Non-bank lenders: Some, based on cash flow
Private lenders: Often, with property security
Cost: Higher than for clean credit
Helps most: Property security and steady revenue
Interest rates: Vary by lender and business

How lenders look at bad credit

Lenders check the credit files of the business and its directors. What matters is how serious the issues are, how recent they are, and whether they've been resolved. A paid default from three years ago is treated very differently from an unpaid judgment last month.

Banks rarely lend after recent defaults or judgments.
Some non-bank lenders put more weight on current cash flow in your bank statements, and may lend smaller unsecured amounts despite past issues.
Private lenders focus mainly on property security and how the loan will be repaid, so credit issues matter less.

When a first or second mortgage might be necessary

With more serious or recent credit issues, or when you need a larger amount, a loan secured by a first or second mortgage over property is often the main option. Private lenders lend against the equity in residential or commercial property, usually for 3 to 24 months, with a plan to repay from a sale or refinance once your credit has recovered. See second mortgage business loans, caveat loans and business loans secured by property.

How to improve your chances

Explain what happened. A short, honest explanation of the issue and what's changed helps more than you'd think.
Show steady cash flow, with no recent dishonours or overdrawn days.
Get tax lodgements up to date, and have an ATO statement ready if you owe tax.
Resolve outstanding defaults where you can, or show a payment arrangement.
Avoid multiple applications. Several enquiries in a short time can make lenders cautious.

The cost of borrowing with bad credit

Expect to pay more than a borrower with clean credit, and compare offers on the total amount you'll repay, including fees. A short-term private loan can be a bridge to cheaper finance once your credit file improves.

Eligibility and documents

What lenders usually look for

Steady revenue in your business bank statements
A clear explanation of the credit issue and what has changed
Up-to-date BAS and tax lodgements, or a plan to catch up
Property as security, for larger amounts or more serious credit issues

Documents you may need

Identification for each director or owner
6 to 12 months of business bank statements
Details of the default, judgment or other credit issue, and any repayment arrangement
Property details, if offering security

Requirements vary by lender. All lending is subject to each lender's credit criteria and assessment.

What lenders publish about credit issues

Here's a selection of lenders that say they consider applicants with credit issues. It isn't a full list of lenders or a ranking.

Fundspot offers business loans secured against equity in residential, commercial or industrial property, including caveat and second mortgage loans, and says it considers new businesses and bad credit. Profile →
Max Funding offers caveat and equity loans secured against property, alongside unsecured and low doc business loans of up to $1 million. Profile →
ABR Finance lends $10,000 to $300,000 or more without real estate security, and says a credit blemish or ATO arrears isn't necessarily a problem. Profile →
Commercial Equity Group finances equipment and raises capital against it without property security, and lists credit-impaired and complex scenarios among its funding solutions. Profile →
Iron Capital's Rent to Purchase Option focuses on the equipment rather than credit history, with minimal paperwork up to $750,000. Profile →
Moshav Financial offers private first and second mortgages, development and mezzanine funding, including for borrowers refused by mainstream banks. Profile →

A sample of lenders, as published by each lender, checked 25 October 2026.

Your options with bad credit

What lenders focus on

Unsecured non-bank loan: Current cash flow
Property-secured private loan: The property and the exit
Asset or invoice finance: The asset or your customers' credit

Usually suits

Unsecured non-bank loan: Minor or older credit issues
Property-secured private loan: Serious issues, ATO debt or larger amounts
Asset or invoice finance: Equipment purchases or B2B invoices

Amounts

Unsecured non-bank loan: Smaller
Property-secured private loan: Larger, depending on equity
Asset or invoice finance: Linked to the asset or invoices

Cost

Unsecured non-bank loan: Higher than clean credit
Property-secured private loan: Usually highest
Asset or invoice finance: Varies

Your options with bad credit
	Unsecured non-bank loan	Property-secured private loan	Asset or invoice finance
What lenders focus on	Current cash flow	The property and the exit	The asset or your customers' credit
Usually suits	Minor or older credit issues	Serious issues, ATO debt or larger amounts	Equipment purchases or B2B invoices
Amounts	Smaller	Larger, depending on equity	Linked to the asset or invoices
Cost	Higher than clean credit	Usually highest	Varies

Related guides

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FAQs

Questions about business loans with bad credit

Sometimes. Some non-bank lenders focus on current cash flow rather than your credit history alone, and private lenders lend mainly against property. Banks rarely lend after recent defaults.

Yes, a lot. Private lenders focus mainly on the property and the exit, so property security opens up options that unsecured lenders won't offer. See our guide to business loans secured by property.

Defaults, court judgments, late payments, a low credit score, a past bankruptcy or Part IX agreement, or ATO debt that's been reported. Lenders look at how serious and how recent the issues are, and whether they've been paid.

Each credit enquiry is recorded on your file, and several in a short time can make lenders cautious. A broker can identify likely lenders before you apply, so you don't apply blindly.

Explain what happened and what has changed, show steady revenue and no recent dishonours, get your tax lodgements up to date, pay or arrange any outstanding defaults, and offer security if you can.

No. There's no cost to you for our service. We're paid by the lender when your loan settles, and there's no obligation to proceed.

This page is general information only and isn't credit, tax or financial advice. Lender details are taken from each lender's published information, checked 25 October 2026, and can change. All lending is subject to each lender's credit criteria and assessment.