Here’s the good news:  If you have a bad credit score, it’s not impossible to get a loan. Whether your bad credit rating is personal or business related, there are ways you can still borrow money if you need to.

You have options

The best way to apply for and secure a loan when you have a bad credit rating is to engage the services of a finance broker. A broker can find those lenders who best serve your needs. As well as acting as your ‘go-between’, facilitating all the information the lender requires to approve the loan. A broker will also help you fully understand the financial obligations you’re undertaking when you commit to repaying a loan.

As well as helping with the application process, a broker will also work through potential scenarios that can affect you once you get the loan, such as changes to interest rates and repayment structures.

A broker can also put you in touch with other services if you need them, such as an accountant or financial planner, who can review your overall financial position. Sometimes, if you are struggling with debt, debt consolidation can be a good strategy. Understanding your ‘expensive debt’ (credit cards, rent-to-buy, car finance etc) and paying it off as quickly as possible will also improve your situation. It may also be worth having the broker do a quick check on your home loan arrangements if you already have one to see if it might be possible to save on that.

Business credit

All businesses go through boom cycles and downturns, and these are not always predictable. Because of this, most entrepreneurs and small business owners at one point or another have found themselves in financial difficulty. Bad credit happens to business owners more often than it does to non-business owners but it doesn’t need to stop you from pursuing your goals and succeeding.  

Most lenders understand that from time to time, businesses require capital. They don’t all have the same black and white definition of ‘bad credit’ when it comes to business either, they know that ‘growing pains’ are natural and cash flow can suffer. 

How to apply

There is a wide range of lenders you can talk to if you need a business loan and have a bad credit history. However, the lenders do want detailed paper work. Ensure you have a solid, achievable business plan, detailed accounting /tax information and financial forecasts. It can also help to conduct a strategic high-level assessment of risks too and consider in detail how you’re mitigating any potential threats to your business while maximising opportunities.

A broker can help you work through what you need to apply for and secure the loan and liaise with appropriate lenders to ensure that you get funds to keep your business on track.

If you’d like to talk about your circumstances, contact us.