Key Takeaway
Yes, you can get a business loan with bad credit in Australia — but the director's personal credit file is almost always checked, and personal defaults will affect business lending eligibility and rates. Specialist and non-bank lenders offer business finance with bad credit at rates from 12–35% depending on security and risk profile. If personal defaults are inaccurate or unlawfully listed, removing them under the Privacy Act 1988 first — typically 30–90 days — unlocks dramatically better rates. For urgent needs, unsecured business lenders and invoice financing offer faster access.
Quick Answer: Yes, you can get a business loan with bad credit in Australia — but the director's personal credit file is almost always checked, and personal defaults will affect business lending eligibility and rates. Specialist and non-bank lenders offer business finance with bad credit at rates from 12–35% depending on security and risk profile. If personal defaults are inaccurate or unlawfully listed, removing them under the Privacy Act 1988 first — typically 30–90 days — unlocks dramatically better rates. For urgent needs, unsecured business lenders and invoice financing offer faster access.
Bad credit and a business to run. It's a painful combination. You need capital to grow — equipment, stock, staff, premises — and your personal credit file is standing between you and the funding that makes it happen.
The reality is that business lending in Australia almost always involves personal credit assessment of the directors. A default on your personal file is a default that affects your business borrowing capacity.
But it's not a dead end. Here's what's actually available.
Why Personal Credit Affects Business Lending in Australia
Most small business lenders — banks and non-bank alike — require personal guarantees from directors. When you sign a personal guarantee, you're personally liable if the business can't repay. That means the lender will always check your personal credit file.
For businesses with less than 2 years of trading history, or turnover under $500,000, the director's personal credit score often carries more weight than the business's own financial position.
This is why a single personal default — even a $400 telco bill from years ago — can block a six-figure business loan application.
Your Options: Business Loans With Bad Credit
| Loan Type | Who Offers It | Rate Range | Security Needed | Timeline |
|---|---|---|---|---|
| Secured business loan | Non-bank specialist lenders | 9–18% | Property or asset | 2–4 weeks |
| Unsecured business loan | Fintech and non-bank lenders | 18–35% | Personal guarantee | 24–72 hours |
| Invoice financing | Specialist invoice funders | 1.5–4% per 30 days | Outstanding invoices | 24–48 hours |
| Equipment finance | Asset lenders | 10–22% | The equipment itself | 3–7 days |
| Merchant cash advance | Payment processors | Very high | Future revenue | 24 hours |
| Bank business loan (mainstream) | Big 4 + second tier | 6–10% | Property + clean credit | 2–6 weeks |
The mainstream bank option — lowest rate, cleanest structure — requires a clean personal credit file in most cases. Everything else is available with bad credit but costs more.
The Highest-Leverage Move: Fix the Personal Credit File First
If you have a default on your personal credit file that was listed unlawfully — which is more common than most people expect — removing it before applying for business finance can save tens of thousands of dollars in interest.
Under the Privacy Act 1988 and the Credit Reporting Code, defaults must be listed in compliance with specific procedural rules. Telco and utility providers in particular frequently breach the Section 21D notice requirement — the obligation to issue written notice before listing a default. When that notice wasn't issued correctly, the listing is invalid regardless of whether the debt was real.
A successful removal moves your score 100–200+ points. That shift can take a business loan application from non-conforming rates (18–25%) to mainstream rates (8–12%) — a saving that compounds over every year of the loan term.
Get a free assessment from Australian Credit Solutions →
How to Access Business Finance With Bad Credit: Step by Step
- Get your personal credit reports from Equifax, Experian, and Illion — all three
- Get a free ACS assessment — identify any removable defaults on your personal file
- If removal viable and timeline allows: pursue removal first (30–90 days), then apply for mainstream business finance
- If urgent: engage a commercial finance broker with non-conforming expertise — not a direct bank
- Prepare your business documentation: 2 years of financials (P&L and balance sheet), BAS statements, bank statements, ABN and GST registration
- Place one clean application through a broker — not multiple direct applications that each create enquiries
Real Case Study: Victor, Parramatta — $280,000 Business Loan Unlocked
Victor ran a small building supplies business in Western Sydney with 4 employees and solid revenue of $1.1M per year. He needed $280,000 in equipment finance to take on a major contract — a CNC machine and two delivery vehicles.
His mainstream bank knocked him back within a week. A $890 Origin Energy default and a $640 Optus default sat on his Equifax file, dropping his score to 488.
He contacted Australian Credit Solutions. We identified that the Optus listing had been made while Victor had an active complaint with the TIO (Telecommunications Industry Ombudsman) — a direct breach of the Credit Reporting Code. The Origin listing was investigated and found to have an incorrect listed amount — $890 instead of the actual arrears of $310 at the time of listing.
Both were disputed. The Optus default was removed in 27 days. The Origin listing was corrected to $310 and subsequently removed on the incorrect amount ground in 41 days.
Victor's Equifax score moved from 488 to 721. He reapplied through a commercial broker. The equipment finance was approved at 9.8% — compared to the 19.4% non-conforming quote he'd received while his file was impaired.
On $280,000 over 5 years, the rate difference saved Victor approximately $62,800 in total interest over the loan term.
He only paid when we succeeded.
Get a free assessment from Australian Credit Solutions →
Types of Business Finance Available With Bad Credit
Unsecured business loans are the most accessible for urgent needs. Non-bank lenders like Prospa, Lumi, and OnDeck assess based primarily on business revenue and cashflow rather than personal credit score. You can access $10,000–$500,000 within 24–72 hours. Rates are high — 18–35% — but for short-term cash flow needs they can be the right tool.
Invoice financing (also called debtor finance or factoring) converts your outstanding invoices into immediate cash. The lender advances 80–90% of the invoice value and collects from your debtor directly. Personal credit is a factor but less critical than invoice quality and debtor credibility. Useful for businesses with solid clients but slow payment cycles.
Equipment finance uses the asset itself as security. If you're buying a truck, excavator, or CNC machine, the equipment secures the loan — which reduces the lender's exposure and often means better approval rates despite bad personal credit. Asset lenders are more flexible than business loan lenders in this regard.
Secured business loans against property offer the best rates for bad credit borrowers with equity. If you or the business owns property, that security substantially offsets personal credit risk. Rates from 9–14% are achievable even with defaults on the file.
What Lenders Want to See (Even With Bad Credit)
Business lenders with bad credit applicants focus heavily on:
Revenue consistency — 12+ months of consistent business bank statements. Volatile revenue or declining turnover is a harder case to make regardless of credit score.
Serviceability — can the business cash flow support the repayments? Lenders want to see the loan repayments represent no more than 20–30% of average monthly revenue.
Time in business — most non-bank lenders require at least 6 months of trading. 12+ months significantly widens your options.
Purpose clarity — knowing exactly what the funds are for and how they generate return makes a stronger application. "Working capital" is weaker than "equipment finance for a named contract."
Security position — any security — property, equipment, invoices — improves your rate and approval probability significantly.
Frequently Asked Questions
Can I get a business loan with a default on my personal credit file in Australia? Yes — non-bank and specialist lenders offer business finance with personal defaults on file. Rates are higher than mainstream lending. If the default was listed unlawfully, removing it first under the Privacy Act 1988 unlocks much better rates. A free assessment identifies whether removal is viable for your specific listing.
Do business loans check personal credit in Australia? Almost always yes. Banks and most non-bank lenders check the personal credit file of all directors who provide a personal guarantee — which is required for most small business loans. The director's personal credit score directly affects loan approval and the rate offered.
What credit score do I need for a business loan in Australia? Mainstream banks typically want a score above 650 (Equifax scale) for business lending. Non-bank lenders will work with lower scores but charge accordingly. Removing defaults that bring your score into the 650–700 range can mean the difference between non-conforming rates and mainstream access.
How quickly can I get a business loan with bad credit? Unsecured non-bank lenders can approve and fund within 24–72 hours in many cases. Secured loans or larger amounts take 1–4 weeks. If you pursue default removal first, add 30–90 days — but the rate saving over a 3–5 year loan term almost always outweighs the wait.
Can I get a business loan if I've been bankrupt in Australia? Bankruptcy is recorded for 5 years from discharge (or 7 years from filing, whichever is longer). During this period, mainstream lending is generally inaccessible. Some specialist lenders will consider applications from discharged bankrupts with strong business revenue and security. After the retention period ends and the listing is removed, standard lending eligibility returns. Subject to individual assessment.
What's the difference between a business loan and equipment finance for bad credit borrowers? Equipment finance is often more accessible with bad credit because the asset secures the loan — the lender can repossess the equipment if you default. This security reduces their risk. Unsecured business loans rely more heavily on personal credit and business revenue. For bad credit borrowers needing to acquire assets, equipment finance is typically the easier approval path.
Get Started
A free assessment identifies whether any personal defaults are removable — and gives you a clear picture of which lending path makes most sense for your business situation.
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Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.
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What Our Clients Say
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"After being rejected for a car loan due to an old default, I contacted Australian Credit Solutions. Within a few months, the default was removed and I got my loan approved!"
"I'm very happy with the outcome and the service provided. The team was very helpful throughout the process and kept me informed every step of the way. Highly recommended!"
"They managed to remove my default quickly, which is truly impressive. Their efficiency and dedication exceeded my expectations. I highly recommend Australian Credit Solutions."
"I had multiple enquiries hurting my score. The team explained exactly what could be done and delivered results faster than I expected. Worth every penny!"
Elisa Rothschild
(BA/LLB)Principal Solicitor & Director
With over 12 years of experience in credit law, Elisa has helped thousands of Australians remove unfair credit listings and rebuild their financial futures. She leads Australian Credit Solutions' legal team with a focus on consumer advocacy and regulatory compliance.
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