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Qualify For A Great Business Loan Deal?
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  • EMGI Limited
  • Finbiz Funding Limited t/a Bizcap
  • LDF Operations Limited
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  • Take Payments Limited
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  • FirmEU BV
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  • Handepay Limited
  • ResQ Limited
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  • The Redwood Group and Associates Limited
  • Tide Platform Limited
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Our Products
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Securing a Business Loan With a Poor Credit Score

Securing a business loan with a poor credit score can be challenging, but there are options available

Key Steps To Improve Your Chances of Being Approved for a Loan

In the dynamic landscape of business, financial hurdles often appear when least expected. However, a less-than-perfect credit score can cast doubt on the feasibility of obtaining a business loan. The good news? A poor credit history doesn't necessarily slam the door on loan possibilities. 

 

With the right strategies and a proactive approach, businesses can significantly enhance their chances of securing the financing they need, even in the face of a less-than-ideal credit profile. This article focuses on how businesses with less-than-stellar credit scores can still secure the loans they need. We'll go through why adopting a strategic approach could mean your business can apply for loans with confidence, despite your credit score constraints.

 

Remember that lenders who offer loans to businesses with poor credit typically offer a higher interest rate than they would to a business with a good credit score. So it's best to prepare to receive a high interest rate from your lender. It's really important, therefore, to review your offer to ensure the proposed interest rate is affordable. Keep reading to find out how to improve your chances of being approved.  

1. Prepare Your Application Documents

When finding business loans with bad credit, it's important to prepare your application documents. Before approving a loan application, most lenders require a business plan and copies of financial statements; including a profit and loss statement, balance sheet, and cash flow statement. 

 

This is especially important when applying for a bad credit business loan because it demonstrates your ability to repay the loan, despite your poor credit score. It may also boost your chances if you provide proof of collateral; this gives a lender more confidence that they'll be able to recoup any losses. 

2. Improve Your Credit Score 

This might be an obvious solution but, while it may take time, improving your credit score can help you qualify for better loan terms in the future. Making sure you pay your bills on time, keeping your credit utilisation low, and disputing errors on your credit report.

 

Over time, these things will mean your credit score could improve. While you may require a loan sooner rather than later, if you can hold off to focus on improving your credit score, this might be the best plan for you to not only improve your chances of getting a loan, but also to get a better interest rate offer.   

3. Look For Alternative Methods

Not all lenders are willing to work with business owners with bad credit. Your bank may be willing to work with you if you have a relationship with them, but you might need to look for an alternative business lender like a private investor or a crowdfunding campaign. You can also take steps to reduce your operating expenses and apply for a lower loan amount. 

Qualify For A Great Business Loan Deal?
Find Out In Minutes

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Start Your Application Now

%%INSERTTEXT0%%

  • %%INSERTTEXT0%%
  • %%INSERTTEXT1%%
  • %%INSERTTEXT2%%
How much would you like to borrow?
50,000
  10,000   50,000   100,000   150,000   200,000+
Merchant account suppliers
  • Worldpay Limited
  • Take Payments Limited
Our Partners
  • EMGI Limited
  • Finbiz Funding Limited t/a Bizcap
  • LDF Operations Limited
  • Rise Funding Limited
  • Risecap Limited
  • Swoop Funding Limited
  • Take Payments Limited
  • TIGER LION FINANCIAL LIMITED
Our Partners
  • Consultiv Utilities Limited
  • Path Energy ltd
  • Utility Bidder Limited
Our Partners
  • Barclays Bank PLC
  • CommercialExperts.com
  • FirmEU BV
  • Fiserv (Europe) Limited
  • Handepay Limited
  • ResQ Limited
  • SumUp Payments Limited
  • Take Payments Limited
  • Teya Services Limited
  • The Redwood Group and Associates Limited
  • Tide Platform Limited
  • WorldPay (UK) Limited
  • Yotta Digital Ltd
Our Products
  • Business Accountancy
  • Business Epos Systems
  • Business Telephone Systems
  • Commercial Waste Collection
  • Digital Marketing
  • Fleet Tracking
  • Invoice Finance
  • Merchant Accounts
  • Website Design

FAQs

Your Questions Answered

It's often harder than it usually is to get a business loan if you have poor credit but, with the right strategies and a proactive approach, your business can significantly enhance its chances of securing the financing it needs, even in the face of a less-than-ideal credit profile. 

One of the best things you can do is compare the loans that are available to you and, although you might not meet the criteria for the most favourable rate, the potential for savings remains through the comparison of loan providers. Click below to find the best deal for you. 

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Read more about how to save your business money
Getting a Business Loan to Buy an Existing Business

What is a Business Loan?A business loan is like any other loan, but one that is used specifically for business-related purposes. It's often one of the first things businesses consider when they want to raise capital.  Loans can be taken out to pay for exciting expansion plans, to buy new stock or specialised equipment, or, in some cases, they can be used to buy an existing business. Can You Borrow Money to Buy a Business?Yes, you can borrow money to buy a business. It's something many entrepreneurs do each year and it can often prove to be a quicker route to running a successful business.  Starting a business from scratch is a time-consuming process. It comes with numerous risks and challenges, whereas buying a business, though it's not risk-free, can be an easier, quicker and therefore preferable option. The Advantages of Buying an Existing BusinessBuying an existing business can often be a better option than starting one from scratch. The business you're buying is likely to have already established offices or premises and, more importantly, it may even already have an established brand and pre-existing customer base. These things are the result of years of work, and buying a business that has them in place already means you're able to bypass this work.  You'll also bypass many of the fees associated with starting a business, such as paying to get it registered, start-up costs like Wi-Fi, consultancy fees, and stock. All of this could, in the long run, save you money and is almost certain to save you time in the short to medium term. Getting a Business Loan to Buy a BusinessIf you want to buy an already-established business, various financial choices are often available. One option is securing a loan from a bank or building society, as you would for a mortgage. One of the main things that a lender will look at when evaluating your application is the business you are hoping to buy. Its financial track record will play a big part in how much you are able to borrow. If the business is in good financial condition, you will be able to borrow more because the bank will have more confidence in recouping the loan. A business in bad condition will therefore only warrant a smaller loan. Other factors, such as your own financial condition and value of assets will also be taken into account by a lender when they are assessing your borrowing capabilities. Get a Business Loan TodayIf you do decide that a business loan is the best way to finance buying the business you want, we can help. Just answer some basic questions about your finances and, using this information, we will find the most suitable loan provider for you. It's completely free and non-committal, so tap the button to get started. 

Government Business Loans: Your guide

Does the UK Government Offer Business Loans?There are several UK government loans available for business in the UK. At the time of writing this, there are 29 business loan schemes currently on the Government's website aimed at easing access to trustworthy sources of business loans. Some of them are catered to specific business sectors and industries, while others are catered to specific regions and locations. The Government's list may be a good place to start if you or your business is looking for a reliable place to secure a loan. The Government Start-Up LoanAs well as having schemes in place to help businesses find a loan, the UK Government also provides loans to businesses themselves. The Start-Up loan scheme is popular amongst small businesses in the UK. Unlike a traditional business loan, the Start-Up loan is a personal loan to be used for business needs, ranging from £500 to £25,000. They come with a fixed annual interest rate of 6%. Additionally, these loans are unsecured, meaning you don't have to risk any of your assets, and there's no need to find a guarantor to back your application.How Much Money Can You Borrow With a Start-Up Loan?Each owner or partner within a business is eligible to apply for up to £25,000 individually, with the total amount available for a single business being capped at £100,000. Those who are approved for the Start Up Loans program will receive 12 months of complimentary mentoring, which provides valuable guidance and access to exclusive business offers. These added benefits are aimed at increasing the chances of your business succeeding.Before You ApplyAs you can probably guess, there are a few requirements you and your business need to meet to apply for the scheme. To apply for the loan you need to live in the UK and be 18 or older. You also need to have started (or have plans to start) a business in the UK that has been trading for less than three years (36 months). Additionally, applicants will undergo a credit check as part of the application procedure.How to ApplyThe Government understands that you may not have a lot of spare cash lying around as you work to get your business up and running, that's why the application process doesn't require any fees. There's also a choice to repay the loan anytime over five years, and there are no penalties or fees for early repayment.

Business Loans: Everything You Need To Know

What Is a Business Loan?A business loan is like any other loan, but one that is used specifically for business-related purposes. It's often one of the first things businesses consider when they want to raise capital. Loans can be taken out to pay for exciting expansion plans, to buy new stock or specialised equipment, or to help your cash flow.  Whatever your needs, a business loan could help. Read on to find out everything you need to know about how they work, what types are available, and how to get one for your business. How Do Business Loans Work?Like most loans, there are two key components you need to be aware of. The Repayment Window This is how long you will have to pay back the amount you have borrowed plus the accrued interest. The longer you have to pay back the loan, the cheaper your monthly repayments will be. Although this seems like a great option at first, it will end up costing you more in the long run through interest payments.  The Interest Rate Also known as the "Annual Percentage Rate" (APR), this is how much extra you will have to pay back on top of the original loan amount. This is essentially how loan companies make their money.  Your interest rate will depend on a few things, but it can be boiled down to how much of a risk you are to the lender.  If you have good credit and secure an asset against your loan, you will find that you have much better terms than someone with poor credit and no security. Interest rates also come in two different types.  Fixed-rate Where the APR remains fixed throughout your repayment term, So if you agree to a 5% APR it will be the same from the day you take out the loan until your final repayment.Floating rateThe APR will change, or 'float' throughout the repayment window and will often be based on the Bank of England base rates.    What Types Of Business Loans Are Available?Not all business loans are created equal. One may be more suited to your specific business needs than the other.  We've broken down the four main types of business loans to give you a bit more understanding of which is best for you.