Bad credit business loans: who lends and what it costs

Can you get a business loan with bad credit?

Yes, and the honest version of the answer has three parts. A small number of online lenders say in writing that they will consider a poor credit file, and one says in writing that it will not.

Most say nothing, assess your last six to twelve months of bank statements, and decide case by case. And if you or the business own property, the file matters much less, because a secured lender is lending against the asset. Which of those three you fit decides the rate you pay far more than the score itself.

Which business lenders consider bad credit?

Checked against each lender's published page on 19 September 2026. Policies change without notice; confirm with the lender or your broker before relying on them. Where a lender does not publish a policy the cell says so.

What counts as bad credit to a business lender?

Both files: the business's and each director's. The events that matter are defaults, court judgments, Part IX debt agreements, bankruptcy, and ATO enforcement action; OnDeck names bankruptcy, insolvency, debt restructure and tax enforcement as the exclusions that make a file unacceptable.

A low score with no event behind it is a pricing problem. A recent event is an eligibility problem, and the lenders in the first two rows of the table are where it is solved.

What does a bad credit business loan cost?

A higher rate

Most lenders quote only after reading your bank data; Max Funding's published starting rate of 1.75% a month on its startup product is a fair guide to where specialist unsecured pricing starts.

A shorter term

Often 3 to 12 months at the unsecured lenders, which pushes the annualised cost above the monthly figure and raises each repayment.

More security

A director's guarantee is standard, and a poor file makes a deposit or asset security more likely on top. Compare the total amount repaid over the term, not the instalment, and check the establishment fee, which commonly runs 2% to 3.5%.

Is a secured loan the better route?

If you own property, usually. Property-secured lenders such as Funding.com.au assess the equity and the repayment plan rather than trading history or the credit file, lend from $25,000 to $15M, and price well below unsecured bad credit lending. The trade-off is the property itself as security.

Equipment and vehicle finance sits in between: the asset is the security, so a poor file is less of a bar than for an unsecured loan. The secured business loans guide covers the options.

How do you improve the odds?

• Pay or settle any default you can, then have the credit file updated; a paid default reads very differently to an unpaid one.
• Put any ATO debt on a payment plan before you apply. Tax enforcement is a named exclusion at OnDeck and a red flag everywhere; a plan in place is not.
• Run all revenue through one business account for six months so the bank-statement read is clean and complete.
• Register for GST and lodge BAS on time; it is independent evidence of turnover.
• Offer security if you have it, and say so up front; it changes which lenders are open to you.
• Apply once, through a broker who knows which lender is currently saying yes to files like yours. Each declined application is another enquiry on the file.

If the business is struggling to meet its existing debts, talk to the free Small Business Debt Helpline (1800 413 828) before taking on more.