Bad Credit Commercial Loans

Get back in business with a bad credit loan through Savvy.

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, updated on August 28th, 2023       

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Kickstart your business

Businesses are not immune to the stresses of the modern world. Even if you or your business has a poor credit rating, Savvy can help with getting a bad credit commercial loan. If your business requires new performing or non-performing assets to keep serving customers who rely on your service or products, we can help find a loan that’s tailored to your needs. Whether it’s a chattel mortgage, hire purchase, or even an operating lease, you can compare options that help your business get the assets or equipment it needs.

Finance your success

As the saying goes, business isn’t about what you turn over, it’s what’s left over. Investment from a loan, even a sub-prime loan as a bad credit customer, is source of capital that can help your business with short-term or even long-term cash flow issues. We’ve helped businesses in retail, mining, construction, and professional services gain liquidity and a better financial standing. Get started with a free quote with us today.

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How you can get back on track with bad credit commercial finance

Get answers to your bad credit commercial loan questions

What is a chattel mortgage?

A chattel mortgage is a type of secured loan that works much in the same way as a home or car loan. You take ownership of the asset and pay off the loan until the “mortgage” is removed.

What is a hire purchase?

A hire purchase is much the same as a chattel mortgage, except ownership does not pass to you until the loan is paid off. This is advantageous for businesses that require operating cost accounting.

How can I get over 100% finance?

Chattel mortgages and hire purchases are not consumer credit products and are regulated differently. This means you can gain 100% finance for purchases and amortise other aspects such as insurance or maintenance.

What may my business buy with a bad credit loan?

We finance all types of vehicles, equipment, and IT infrastructure with our loans. Ask your consultant to see if we finance your asset purchase – it’s likely we do!

How much will a bad credit loan cost compared to a normal loan?

A bad credit commercial loan will attract higher interest rates compared with a prime commercial loan. However, your consultant will work hard to bring this number down as much as possible.

What is a comparison rate?

A comparison rate is a number expressing the base interest rate and most mandatory fees and charges as one single figure. This gives you a clearer idea of how much the loan will cost over time.

Do I need a deposit?

No – However, your lender will look favourably on your business if you can provide some kind of equity up front.

Can I claim tax back on my purchase?

Yes – business can claim the GST back on purchase price and tax deductions on depreciation, interest payments, and the fuel input tax credit for vehicles

More about bad credit commercial loans

Why business loans are different

Commercial loans are very different to consumer loans because the National Consumer Credit Protection Act 2009 regulates the latter. This gives more freedom to borrowers to secure loans of up to 100% of the value of an asset, or even more. With the extra money, you can pay off maintenance, registration or insurance costs over the course of your loan. Business can also claim the GST on the purchase price, depreciation and interest paid on repayments, and even the GST on any balloon payment. However, these loans are usually secured, especially if you have bad credit. If you default, your lender can repossess your assets.

What is a balloon payment?

A balloon or residual payment is a portion of the loan left aside as a lump sum payable on the last regular repayment of your loan. This can vary anywhere between 20%-50%. The advantage to your business is that your regular repayments are lower than if you amortised the entire amount over the length of the loan term. This means you can pay off your amount quicker, but you will need to come up with the amount when the loan term is up. In car loans, this is an opportunity to trade your car in, give it back as a sort of lease, or pay the balloon and keep the car.

Why have a deposit?

If your business has a bad credit rating, you should try to put up a deposit for it. It will help approval and even get you a better interest rate. Though you can finance a car without a deposit, it’s generally a better idea to put some money upfront to have ‘skin in the game.’ This puts less burden of risk on your lender that may influence your offered interest rate. Businesses with bad credit may not have this luxury, but it is worth thinking about.

Can you refinance a bad credit loan?

Some mistakenly believe that a bad credit loan will mean the same high interest rate for the entire life of the loan. However, in many select cases, a good financial standing means you could refinance your bad credit commercial loan for a more favourable interest rate, or even a normal, “prime” interest rate. You may need to convince your lender of your improved financial standing, but it can save you a lot of money – or be used to fund even more asset purchases if you are looking at expansion.

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