Bad credit? Your business can still borrow
Yes, you can get a business loan with bad credit in Australia. Defaults, arrears, tax debt, Part IX debt agreements and other credit events are considered case by case. Property-secured loans focus on your equity more than your credit file, while unsecured loans focus on whether your cash flow supports repayments.
At a glance
- Defaults, arrears, judgments, tax debt and Part IX considered case by case
- Property-secured loans weigh your equity more than your credit file
- Unsecured loans look at whether cash flow supports repayments
- Checking your options won't add an enquiry to your credit file
- No lectures, no judgement, just a clear answer
- Sole traders, partnerships, companies and trusts can apply
Can you get bad credit business loans in Australia?
Yes, bad credit business loans are available in Australia, and plenty of owners with a less-than-perfect file get funded. The trick is going to lenders who look past the score and at the full picture.
Banks often run your credit file through a system that says yes or no in seconds. Private and specialist lenders in our network take a more human view. They want to know what happened, what's changed, and how this loan will be repaid.
Life happens. Customers don't pay, a partnership ends badly, a health scare takes you out of action for a few months. A credit file records the wobble, not the recovery. We care more about the recovery.
What counts as bad credit?
Bad credit usually means your credit report shows one or more negative events. These can include:
- Defaults on phone, utility, finance or credit card accounts
- Missed or late repayments showing in your repayment history
- Court judgments from unpaid debts
- Tax debt with the ATO, including debts that have been disclosed
- Part IX debt agreements or Part X personal insolvency agreements
- Previous bankruptcy, once discharged
- Lots of recent credit enquiries in a short period
A low credit score can also happen without any single disaster, just from a thin file or a cluster of applications. Either way, it's not automatically a deal-breaker here.
Which credit bureaus do lenders check?
Lenders in Australia can check any of three credit reporting bodies: Equifax, illion and Experian. Each keeps its own file, so your details and score can differ slightly between them.
It's worth requesting your free report from all three before you apply. That way there are no surprises, and if you spot something wrong, like a default you already paid or a debt that isn't yours, you can ask the bureau to correct it.
How do lenders view different credit events?
Lenders view each credit event differently depending on what it is, how old it is and whether it's been dealt with. Here's a general guide.
| Credit event | Roughly how long it stays on file | How our lending partners tend to view it |
|---|---|---|
| Paid default | 5 years from listing | Usually viewed more kindly, especially with a good explanation |
| Unpaid default | 5 years from listing | Considered case by case; may be paid from the loan |
| Late repayments | Around 2 years of history | Recent patterns matter more than old ones |
| Court judgment | Around 5 years | Assessed on the story and whether it's settled |
| Part IX debt agreement | At least 5 years | Possible, particularly with property security |
| Discharged bankruptcy | At least 5 years | Possible, depending on the security and exit |
| ATO debt | Large overdue business tax debts can be reported | Very common; loans often used to clear it |
| Many recent enquiries | 5 years | A flag, but rarely a deal-breaker on its own |
The common thread is that context counts. An old default from a dispute with a phone company isn't treated the same as a pile of recent missed payments.
Which loan works best with bad credit?
The loan that works best with bad credit depends on whether you own property.
If you own property: property-secured loan
This is usually the strongest option. Borrow from $20,000 to $5 million against real estate you own, and the property matters more than your credit history. No tax returns or financials are needed, either. It works as a first mortgage or as a second mortgage behind your existing home loan. See no doc business loans and second mortgage business loans for how those work.
If you don't own property: unsecured cash-flow loan
Weaker credit can still be considered, as long as your business has an ABN, at least six months of trading and bank statements that show you can comfortably handle repayments. Here the cash flow does the convincing.
That's the gist. Want your options?
Just show meWill applying make my credit worse?
No. Our short online form counts as an enquiry rather than an application for credit, so your file stays untouched. That matters when your credit is already bruised, because a string of formal applications can pull your score down further.
A lender only runs a formal credit check if you decide to go ahead with an application. You'll know before that happens.
What helps a bad credit business loan application?
A few simple things help a lot, and none of them involve pretending the credit file is spotless.
- Be upfront. Mention defaults, tax debt or a Part IX early. Lenders will see them anyway, and a heads-up builds trust.
- Have a one-line explanation. "A customer went bust owing us money" is all most lenders need.
- Show what's changed. New contracts, steadier income or paid-off debts all help.
- Have a clear exit. For secured loans, a realistic repayment plan often matters more than your score.
- Use the loan to fix things. Paying out a default or an ATO debt can be part of the purpose.
What does this look like in real life?
Here are some illustrations.
A landscaper in Mandurah has two unpaid defaults from a tough patch a few years back. He owns a house with good equity. A second mortgage lets him clear the defaults and buy a new trailer, with repayment planned from a refinance once his file is tidier.
A beauty salon owner in Parramatta finished a Part IX debt agreement recently. She doesn't own property, but her business account shows solid weekly takings. A lender looks at her cash flow and is willing to consider an unsecured loan for a fit-out.
A transport operator in Townsville has an ATO debt that's snowballing. His credit score is poor because of it. He uses equity in a commercial yard to clear the debt in one go, which is covered in detail on our ATO debt business loans page.
Ready to see what's possible?
If your credit file has a few dents, the easiest next step is the 60-second form. It's free, it won't mark your file, and a real person will tell you plainly which route might work. Pricing is worked out around your circumstances, and our team hunts for the sharpest deal on offer for someone in your shoes.
That's the gist. Want your options?
Just show meBad credit, good business. Just tell us the story.
FAQs
Can I get a business loan with bad credit in Australia?
Often, yes. Through our lending partners, credit events such as defaults, arrears, tax debt, court judgments and Part IX debt agreements are considered case by case. When real estate is the security, the equity carries more weight than your file. Without property, a lender can still look past a patchy history if your takings comfortably cover the repayments.
Which credit bureaus do Australian business lenders use?
Australia has three main credit reporting bodies: Equifax, illion and Experian. Lenders may check one or more of them, and each can hold slightly different information about you and your business. It's worth requesting your free credit report from all three so you know exactly what a lender will see before you apply.
Will checking my options hurt my credit score further?
No. Our form just starts a conversation with our team, so nothing is lodged with Equifax, illion or Experian and no mark appears on your file. A lender will only run a formal credit check later if you decide to proceed with an application. That keeps you from stacking up multiple enquiries while you work out which route suits you.
Can I get a business loan while in a Part IX debt agreement?
It can be possible, particularly with a property-secured loan where the lender relies mainly on the equity in real estate you own. Each situation is assessed case by case, including where the agreement is up to and what the funds are for. Being upfront about it from the start makes the process much smoother.
How long do defaults stay on my credit file in Australia?
Defaults generally stay on your Australian credit report for five years from the date they were listed, even once they've been paid. Paying a default usually updates its status to paid, which lenders tend to view more favourably. Court judgments also typically stay on file for around five years.
What's the best business loan option if my credit is poor?
If you own property with equity, a property-secured private loan is usually the strongest option, because the lender focuses on the security and your exit plan rather than your credit history. If you don't own property, an unsecured loan may work if your bank statements show steady income that can comfortably cover repayments.