Bad credit business loans from £1,000

Yes, it is possible to get a business loan with bad credit. While it may be more challenging, some lenders specialise in offering finance to businesses with poor credit histories. However, the loan terms may not be as favourable, meaning you could face higher interest rates, stricter repayment terms, or additional security requirements.

Qualifying for a bad credit business loan depends on several factors beyond just your credit score. Lenders will typically look at your business’s revenue, cash flow, and trading history to determine whether you can afford the loan.

In some cases, lenders may require security, like assets, a guarantor, or a personal guarantee, to reduce their risk. While poor credit can limit your options, having strong business financials or offering collateral can increase your chances of approval.

In general, depending on the type of finance, lenders will consider the following:

• Credit score: A key factor in eligibility and interest rates.
• Business revenue: Proof of consistent and sufficient revenue to ensure repayment.
• Time in business: Typically 3-12 months to show stability.
• Cash flow: Positive cash flow to demonstrate your ability to manage loan repayments.
• Collateral: Assets or personal guarantees to secure the loan and lower the lender’s risk.
• Business plan: A clear plan on how the loan will be used and its benefits for the business
• Industry risk: Some industries are considered higher risk, impacting approval chances and terms.
• Personal financial history: Lenders may review the personal credit of business owners, particularly for smaller or newer businesses.

Improving your business credit profile requires consistent financial responsibility and a proactive approach. The exact factors impacting your score will be specific to your business, but here are some general key steps to follow:

• Pay all business bills, loan repayments, and supplier invoices on time
• Reduce outstanding debts
• Register your business with credit reference agencies to help identify and address any potential credit issues
• Keep financial records up to date and accurate
• Address any existing County Court Judgements (CCJs) and work to resolve them quickly
• Ensure your business and its directors remain solvent
• File your full accounts with Companies House on time

There are several strategies to improve your credit score. Every business is different, but by consistently demonstrating financial responsibility, such as paying bills on time, reducing debt, and maintaining accurate financial records, you can significantly strengthen your business’s credit profile and unlock better financing opportunities.

In some cases, especially for smaller businesses or sole traders, applying for a bad credit business loan may impact your personal credit. This is because many lenders require a personal guarantee or review your personal credit score as part of the approval process.

Rest assured, checking your loan options with us won't impact your credit score, allowing you to compare offers with no risk to your credit.

The time it takes to secure a bad credit business loan varies by lender and loan type. Some lenders can provide funding within 24 hours, while others may take several days to process your application and disburse the loan.

Yes, County Court Judgments (CCJs) can impact your ability to get a business loan. Lenders see CCJs as a sign of past financial difficulties, making them cautious about lending. However, approval is still possible depending on:

• The age of the CCJ – Older CCJs (over 3 years) may have less impact
• The amount owed – Smaller CCJs are seen as less risky
• Whether it’s settled – A satisfied (paid-off) CCJ looks better to lenders
• The Lender’s criteria – Some lenders specialise in bad credit loans

Remember: If you have a CCJ, improving your credit profile before applying for funding can help boost your chances of approval.

For more details, read our guide on getting a business loan with a CCJ.

Yes, it is possible to get a business loan with an Individual Voluntary Arrangement (IVA), but it may be harder and usually requires permission from your Insolvency Practitioner (IP). Some lenders specialise in working with businesses that have an active or completed IVA, though rates and terms might be stricter.

Learn about the types of funding available and how to boost your chances of getting a business loan with an Individual Voluntary Arrangement in our IVA guide.

Yes, we can help startup businesses with bad credit find suitable business loans, although the options may be more limited. Some lenders consider factors like your business plan, income, and collateral instead of just your credit score. Comparing lenders can help you find the best options available.

If you're considering a bad credit business loan, it's important to weigh the pros and cons. While it can provide quick access to funding for your business, taking on debt without a clear plan can put your business at risk. You may end up in a cycle of borrowing that hampers profitability and growth.

However, if you're confident in your business's ability to repay and have a strong strategy in place, a bad credit business loan can be a valuable tool for funding yor future growth. However, be sure to carefully read the loan terms to ensure it aligns with your financial goals.

No, bad credit business loan approvals are never guaranteed. However, there are specialist lenders who focus on providing funding options for businesses with poor credit histories. These lenders may offer higher approval rates than traditional banks by looking at your overall business performance, revenue, and repayment ability — not just your credit score.

At BLFBC, you can compare bad credit business loans online by completing our application form. By comparing lenders with us, you can find the best rates and terms available, increasing your chances of securing the right financing for your business.