Bad Credit Commercial Finance Australia: Options for Business in 2026

Quick Answer: Commercial finance with bad credit is available in Australia through specialist commercial lenders and non-bank financiers — but rates of 10–22%+ apply compared to 6–9% for clean-credit commercial borrowers. Directors' personal credit files heavily influence business lending decisions, so a personal default can block commercial finance entirely. If that default was listed unlawfully under the Privacy Act 1988, removing it first can unlock mainstream commercial lending and save substantial interest over the financing term.

Commercial finance covers a broad range — commercial property purchase, business premises fit-out, equipment acquisition, working capital, and trade finance. What these products have in common is that lenders look at both the business finances and the personal credit file of directors. A default on a director's personal file can be as significant as a default on the business itself.

How Personal Credit Affects Commercial Finance in Australia

For SMEs and sole traders, there is often no meaningful separation between personal and business creditworthiness in a lender's assessment. Directors providing personal guarantees — which is standard for most commercial lending — put their personal credit on the line. And when a lender checks a director's personal file as part of commercial due diligence, active defaults are just as disqualifying as they are for consumer lending.

Real Case Study: Elena, Hobart — Commercial Equipment Finance After 39-Day Credit Repair

Elena, 45, ran a specialist food production business in Hobart and needed $320,000 in equipment finance to expand capacity for a new wholesale contract. Her business financials were strong — the new contract alone covered the repayments. But her personal Equifax score was 448 because of a $640 default from a mobile phone account listed four years earlier.

The default had been listed, we established, while Elena had a written dispute lodged with the telco and a TIO complaint in progress. Dual dispute protection under the Credit Reporting Code had been ignored.

ACS challenged the listing. Removed in 25 days. Elena's personal Equifax score moved from 448 to 692.

The commercial lender approved the $320,000 equipment finance at 9.2% p.a. — compared to the 17.4% specialist quote she'd received before approaching ACS.

Result: Elena's personal Equifax score moved from 448 to 692 in 25 days. On $320,000 over a 5-year equipment finance term, the rate difference of 8.2% saved approximately $68,400 in total interest. The contract she'd secured was worth $1.2M to her business. She waited 39 days from first contacting ACS to finance approval. She only paid when we succeeded. Subject to individual assessment; results may vary.

Preparing a Commercial Finance Application With Bad Credit

1. Get the director's personal credit reports from all three bureaus
2. Get a free ACS assessment — personal defaults blocking commercial lending are often removable
3. If removable, fix the personal credit file before applying commercially
4. Prepare business financials: 2yr P&L, BAS statements, bank statements, tax returns
5. Engage a commercial finance broker with non-conforming expertise

Options for Bad Credit Commercial Finance

Personal credit repair first. If a director's personal default is the core issue, removing it under the Privacy Act 1988 typically takes 30–90 days and unlocks mainstream commercial rates.

Non-bank commercial lenders. Lenders like Pepper Commercial, Liberty Business, and specialist commercial brokers access a range of non-conforming commercial products. Rates are higher but approvals are possible.

Asset-backed finance. Equipment, vehicles, and receivables can all serve as security for finance even with impaired personal credit. The asset reduces lender risk and can partially offset credit concerns.

Invoice finance. For businesses with outstanding invoices, invoice factoring or discounting provides working capital based on receivables quality rather than credit score. A viable option for cash flow needs that doesn't require personal credit approval.

Frequently Asked Questions

Can a business get commercial finance with a director's bad personal credit? It depends on the product and lender. For small unsecured business finance, some lenders weigh business revenue more heavily than personal credit. For larger commercial loans — particularly commercial property — directors' personal credit is a critical part of the assessment, and active personal defaults often block approval at mainstream lenders.

Does a business credit file exist separately from personal credit in Australia? Yes — businesses can have their own commercial credit file separate from directors' personal files. However, for SMEs seeking commercial finance, lenders routinely assess both. Strong business financials can partially offset a director's personal credit issues but rarely overcome them entirely for larger amounts.

What credit score do I need for commercial finance in Australia? There's no single published benchmark, as commercial lending is more individually assessed than consumer lending. As a rough guide, mainstream commercial lenders prefer directors with Equifax scores of 650+. Non-bank commercial lenders will consider lower scores, particularly with strong business revenue and asset security.

How do I separate my personal credit from my business finances? Establishing clear corporate structures — operating through a Pty Ltd company rather than as a sole trader — provides some separation over time. However, personal guarantees (which most commercial lenders require) mean your personal credit remains relevant regardless of business structure.

Can I get commercial property finance with bad credit in Australia? Yes — through specialist commercial lenders who accept impaired credit applications, typically at higher LVR restrictions (60–70%) and higher rates. For commercial property specifically, the property's income yield is a significant factor alongside credit profile.

Fix the Personal Credit Barrier First

If a personal default is blocking your commercial finance application, find out in 24 hours whether it can be removed. The business revenue you're leaving on the table every month it stays listed could dwarf the cost of doing nothing.

Australian Credit Solutions — ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild. No Win No Fee. 98% success rate on accepted cases. Award winner 2022, 2023, 2024.

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This article provides general information only and does not constitute legal or financial advice. Australian Credit Solutions Pty Ltd holds ASIC ACL 532003. Results may vary.

Related reading: Business Loans With Bad Credit → | Default Removal Services →

Free credit reports: equifax.com.au. Verify ASIC licences: asic.gov.au. Financial guidance: moneysmart.gov.au.