Can you Get Guaranteed Approval Bad Credit Business Loans in Australia?

By: Aaron Robbins0 comments

The road to business success is seldom a smooth ride. The Australian Bureau of Statistics reported that in June 2022, almost a third of employing businesses found it difficult to find suitable staff, almost half of all businesses experienced increases in their operating expenses, and over 40% of business faced disruptions to their supply chain.

The undulations of your business journey can leave their mark on your business’ credit rating. If you’re a business owner who needs finance to elevate your operations, but know you’re going to face difficulty due to a bad credit rating, then read on — we discuss how to approach business finance when you’ve got bad credit.

Are there bad credit start up business loans with guaranteed approval?

Unfortunately in Australia, no legitimate finance option is going to offer guaranteed approval, even for individuals or businesses with excellent credit ratings, let alone poor credit scores. However, that isn’t to say that businesses with bad credit are ostracised from borrowing money. There are several means to accessing business finance with a poor credit history, business owners simply need to do their homework and take a few extra steps to ensure they get a look in when applying for a business loan.

How to get a business loan with a bad credit score

Bad credit business loans are one option for businesses whose credit report leaves a lot to be desired, though, there are additional actions that can be taken to improve a business’ position (and even increase their chances of accessing a bad credit business loan).

We step through our top tips to accessing bad credit business loans, below.

Know what your business credit score is & what’s on your credit report

They say that knowledge is power, and this certainly rings true when it comes to having a bad credit history. Many people know that they can access their personal credit record to check their credit score and identify their strengths sand weaknesses, but many don’t realise that credit reporting agencies also make their business credit file available.

Understanding what your current credit score is and what led to your bad credit history can help you identify patterns or decisions to avoid in the future, and sets a starting point to help your credit reputation.

Unlocking business success starts with accessing a copy of your business credit report directly through one of the three major credit reporting bureaus in Australia.

Top tip: Most credit reporting bureaus will provide guidance and insights on what you need to further strengthen your credit rating. For example, if you’ve never had a credit check performed on your business, then your credit file will likely have little to no information available, which actually drives your credit rating down!

Improve your cash flow

Chances are that as a business owner, cash flow is front of mind for you. Making consistent efforts to smooth your cash flow can be one of the best actions that small business owners and large company directors alike, can do to help improve their financial standing before seeking out a business loan. If your credit reputation is lacking, then prospective lenders will turn their attention to your bank account conduct to assess your creditworthiness, instead.

Keeping your bank accounts in the green, chasing outstanding invoices and unpaid invoices consistently can do wonders when showcasing to lenders your diligence around financial management and your capacity to repay a business loan.

Make repayments on time

This one perhaps goes without saying, but paying all of your existing loan repayments (including paying bills on time) can help to improve your credit rating over time, as well as avoiding unnecessary fees, reduce the risk of having a default recorded against your business name and also to show lenders that you can sufficiently manage a business loan. Repayment history for credit accounts is also recorded on a business credit file.

The prospect of taking on further debt may seem overwhelming if you’re already managing multiple debts, however, don’t forget that you can use bad credit loans to help consolidate your debts into one business loan, which should make staying on top of your repayments easier (not to mention only being charged one interest rate and one set of loan fees)!

Have you considered? Some vendors will conduct soft pull credit checks before entering into business agreements with you, so it pays to work with suppliers or vendors who report to one of the three main credit reporting agencies so that your efforts are reflected directly onto your credit file.

Opt for secured business loans

Unsecured business loans are typically harder to be approved for, as the lender does not have any security against the loan in the event that you default and are not able to repay your business loan. Consider using a secured loan to provide the lender with additional security to lower their risk of lending money to you. Real estate property is commonly used as collateral for business loans, however, vehicles and equipment can also be used if you’re applying for vehicle or equipment finance.

Use private lenders over traditional lenders

If you have a low credit score, most lenders will display resistance in lending further money to you. This is because traditional lenders are bound by strict lending criteria that is inflexible if you don’t pass their credit check.

Unlike traditional banks, private lenders have flexibility with their lending criteria and can overlook bad credit or a low credit score provided they can assess your capacity to repay the loan. Also unlike most other lending institutions, private lenders and bad credit business lenders have a sound reputation for providing speedy finance. Forget weeks or months waiting around anxiously for a decision on your loan application, at Diverse Funding Solutions, we can approve and fund business finance in as little as 48 hours.

What can I use a bad credit business loan for?

The beauty of bad credit business loans is that, in most instances, you can use them for a range of different business purposes. Whether it’s to purchase inventory, pay off personal loans that you took out as a start up business, consolidate debt, pay tax debt or put on staff, a bad credit business loan can help you leverage your business to new heights and out of low credit scores.

Diverse Funding Solutions can help bad credit businesses

Want a bad credit business loan with competitive business finance rates, friendly service, flexibility and fast funding? We work with Australia’s top private lenders, to put you in front of the right lender for your needs. A bad credit loan may be the start of good things to come, contact Diverse Funding Solutions to get started.

Frequently asked questions about bad credit business finance

Can I access a bad credit loan as a start up business?

Start up businesses find it notoriously difficult to access finance due to having no trading history. Most finance options require start up businesses to be trading for a minimum of six months. Talk with us about your options as a start up business owner with bad credit.

Do bad credit loans have high interest rates?

Most bad credit lending does come with higher interest rates than loan products for borrowers with excellent credit scores. However, business finance often comes with individual pricing models, which is why it pays to talk to your lender before applying. You can also get a free quote before talking to our team.

Are there no credit check business loans in Australia?

Some private lenders don’t need to run credit checks on businesses before offering them finance. However, ‘no credit check business loans’ are not an available product type in most instances. To discuss secured bad credit loans through private funding, reach out to our team.

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