Bad Credit Business Loans Guaranteed Approval Australia

Can you get guaranteed approval on a bad credit business loan in Australia?

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, updated on October 3rd, 2023       

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If your business’ credit rating isn’t currently at its best, the idea of getting a “guaranteed approval” bad credit loan seems pretty attractive. Is that possible in Australia, though? Explore your options for bad credit business finance with this useful guide.

In Australia, is it possible to get a bad credit business loan with guaranteed approval?

No – in Australia, you’re not going to get guaranteed approval on a legitimate business loan of any sort, bad credit or not. No matter what the loan or the situation, there’s always going to be an application process with some level of checking and safeguards, which means there’s always a chance the lender will say no.

Fortunately, even if your business is struggling with a poor credit rating, there are still options on the table. Bad credit loans exist specifically for these situations. A bad credit loan works around the credit score issue – by charging higher interest rates, they offset some of the risk involved with the loan, which means the lender can approve applications even if the business in question has a less-than-perfect credit history.

Nowadays, there’s a wide variety of lenders who offer loans for businesses with poor credit. Many of them offer online services and very quick turnaround – which can help a lot if your business ends up needing short-term finance in a hurry.

Is a bad credit business loan the best option if my business has a poor credit?

Generally, yes – for a business struggling with a low credit rating, they’re quite likely to be the best option available. Bad credit loans are among the most accessible loans on the Australian market and they’re available to businesses in very difficult financial circumstances. They don’t come cheap in terms of interest rates, so if you have other types of loan on offer (such as an unsecured business loan from a very credit-tolerant lender), they might be worth exploring. However, the reality is that bad credit loans normally come in to play when your other options run out, at which point they’re typically the only choice on offer.

You can compare your best bad credit business loan options with Savvy. With access to some of Australia’s top lenders and loan products for businesses with bad credit, we can get you started with the comparison process to help you find the best business loan to suit your needs.

How can I improve my business's credit rating?

Don't miss loan repayments

One of the best ways to show a lender that you can be responsible with a loan is by being responsible with your existing loans. Make your repayments on time, every time. If possible, pay a little more than the required amount. If you’re struggling, talk to your lender and work something out.

Limit credit usage

Maxing out your available credit isn’t just expensive in terms of interest: it's also bad for your credit rating. Keeping below 30% of your available credit will help a lot when you’re rebuilding your business’ credit score. It’s also a good idea not to have too much credit available, as this is seen as something of a liability to credit agencies.

Don't borrow too much money

Juggling multiple loans doesn’t look great on a credit report, not to mention that multiple loan applications might have contributed to your low credit in the first place. Look to either paying some off or consolidate your debts to positively impact your rating.

Pay your bills on time

Unpaid bills have a negative effect on your credit just like missed loan payments. Make sure all the bills are paid by the due date where possible. A digital calendar which can be shared between staff members and generate automated reminders – such as Google calendar – can help to stay on top of these deadlines.

Frequently asked questions about bad credit business loans

In Australia, can you refinance a bad credit business loan?

Yes – if your credit rating situation improves down the track, it could be a good idea to refinance to potentially access a better rate on the loan. You’ll want to do your homework, though – many lenders charge substantial fees for additional repayments, settling a loan early, and refinancing. Make sure you’re not losing out over all when you factor those fees in.

If I do find a lender in Australia that offers a bad credit business loan with guaranteed approval, should I apply?

No – whether you’re a start-up or you’ve been trading successfully for decades, in Australia there’s no legitimate lender that will genuinely offer guaranteed approval on a business loan. As such, if you come across a person or website that’s offering guaranteed approval, they’re quite possibly not a legitimate lender – so you’re better off walking away. The Australian Government’s Moneysmart website also maintains a listof vendors to steer clear of.

How can I check on my business's credit rating?

You can apply for a copy of your business’ credit report from one of Australia's major credit agencies – most notably Equifax, Experian, and illion. This is something that very few businesses take advantage of – it’s estimated that only 15% of businesses ever apply for a credit report. If there’s any errors on your report, you can also apply to have those corrected.

Will my personal credit affect my ability to get a business loan?

Yes – when assessing a loan application, most lenders will also examine the credit ratings and histories of the company’s directors, so your personal credit can have an impact. It’s always worth looking after your credit rating as best you can.

In Australia, will the bad credit rating of my previous business affect the credit score of my new business?

It can, indirectly. It’s more accurate to say that your business’ credit score is affected by the credit history of its directors – so previous bankruptcies or court judgements can impact on the credit rating of the new business. In Australia, when you’re looking into loans for a new start-up business, there’s no way to get around a credit check showing any problems with your credit history.

Can I get a better rate on a bad credit business loan by offering collateral?

Yes – offering collateral will lessen the risk for a lender, which can potentially translate into a better interest rate on the loan. It’s worth discussing the option with your lender if you have assets suitable for collateral and seeing what you can work out.

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