Business Loans Without Personal Credit Check

Find out more about your business loan options and whether a credit check is required today.

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, updated on September 4th, 2023       

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Your business’ credit score and your personal score are quite separate figures, but both can come into play when applying for a loan. If your personal credit is a little lacking, it is possible to get a business loan without the need for a personal credit check? Learn about your finance options in Savvy's helpful guide.

Can I get conventional business loans without needing a personal credit check?

In a word, no – you generally can’t get business loan funding without a personal credit check coming in to play. While the idea of sidestepping a credit check might be an attractive one if your credit record isn’t spotless, the reality is that running credit checks on a business’ directors is standard practice for any Australian lender. Partly to check on your past track record with loans and credit, but also for purely administrative reasons – confirming details about you and your business and checking everything is above board. So pretty much any legitimate lender you approach will be running one.

Fortunately, if your credit is less than perfect, that doesn’t need to be the end of your business loan story – there are still options open to you. In recent years, Australia has seen a growing number of loans from private online lenders coming on to the market. Unlike banks – which are notoriously intolerant of poor credit – online lenders have a well-established reputation for being lenient when it comes to credit ratings.

Your choice of loan can also have a huge impact. For example, an unsecured business loan is a type of loan that requires no asset for security, is quick and easy to apply for, and they're well known for being available to customers with widely varying credit. Savvy can help you find and compare a range of these loans – easily comparing a range of Unsecured loans from some of Australia’s top lenders, and choosing the best for your business.

If your credit score is particularly low, there are also a range of loans known as bad credit loans that might still be open to you when few other loans are. These are well wort looking into if you’re in the process of rebuilding after past financial troubles.

Are there alternatives to a traditional business loan without a personal credit check being needed?

There are a few alternative types of business finance that do place far less emphasis on your credit – particularly your personal credit. These options might only be suitable for certain businesses, but they can be a great option if you do qualify.

Invoice financing is a form of business lending suitable for businesses which have a backlog of unpaid invoices (as in money that people owe your business, rather than the reverse). It involves taking a number of those invoices and transferring them to the lender, who then pays you the majority of their value. The lender then collects the debt themselves. And because you don’t need to make any repayments in this process, your credit rating isn’t significant – the lender places much more weight on your customer’s credit rating than yours.

A merchant cash advance is another business lending alternative. It involves borrowing money from a lender, who takes their repayments as a percentage of your business’s cash flow rather than a regular set value amount. And because it’s not technically a loan – it’s technically a “sale of future revenue” – the rules are a little different, and the lender can focus more on your current cash-flow numbers than your recent credit history. The downside is that they’re not cheap – weighing in among the most expensive loans on the market.

How can I improve my loan approval odds, despite bad credit?

Frequently asked questions about bad credit business loans

Can I still get a good interest rate with a bad credit loan?

Probably not. Loans for businesses with poor credit charge higher fees to offset the risk on the loan – the extra money acts a like a bit of an insurance policy for the lender. As such, bad credit loans will generally be a high interest version of a regular (normally unsecured) loan.

What if I've kept my business finances and personal finances entirely separate?

Even if you’ve been painstakingly careful not to mix your business and personal finances (which is a good idea), lenders will still generally look into your personal credit – and that of any other owners or directors the business has – when assessing your loan application. It’s part of the process of getting a snapshot of your business and its finances.

Could my business partner get a loan without me needing a personal credit check?

Not if you’re still an owner or director of the company. If you stepped down from that role and effectively disassociated yourself from the company, then the results of your personal credit check would no longer affect the business or any loan funding it applies for. But that’s a fairly major solution with far reaching consequences, and there’s probably better options to explore first.

Can I check my personal credit score without needing to pay for it?

Yes. Under Australian law you’re entitled to a free personal credit check every three months. You can contact one of the major credit agencies to request this – most notably Equifax, Experian and illion.

If I get a bad credit loan and my finances improve, can I upgrade to a better loan?

You generally can’t upgrade the terms on a loan halfway through, but there’s generally nothing stopping you refinancing and getting a new loan with better terms to pay off the previous loan. Check the fees attached to your existing loan first though, to make sure you’re not likely to get stung too badly for settling the loan early.

How long does negative information stay on my credit record?

Depends on the information. Most details stay on your record between two and seven years. Small stuff like what credit products you’ve held and your repayment history generally stays on your record for two years. Larger things like defaults on bills and loans will be on there for five to seven years. And big stuff like bankruptcy and debt agreements will almost certainly be on for the full seven years.

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