Bad credit business loans in the UK

Business loans for bad credit scores give you the opportunity to access finance that you may not have been able to previously. This type of loan is designed for businesses that have experienced some financial difficulties in the past and as a result, have a less than perfect credit history.

However, this doesn’t mean that your business is doomed to fail – there are plenty of opportunities out there for businesses with bad credit. We have products that your business can benefit from even if it has an adverse credit history. So don’t despair, and get in touch today to see how we can help you get the finance you need.

If your business’s credit is not as strong as it should be take a look at the different types of lending that is available to traders.

Businesses need funding for a variety of reasons, such as to pay for stock, new equipment, or even to expand their premises. However, if you have a bad credit score, you may struggle to get a loan from a bank or other traditional lender. That’s because they will see you as too high a risk to lend to. Fortunately, there are still a number of options available to you. T

here are specialist lenders who are more willing to lend to businesses with bad credit scores. They understand that not all businesses are perfect and that occasional bumps in the road are inevitable. They also tend to focus on your business’s current financial situation rather than your past credit history. So, if your business is doing well despite having a bad credit score, you may still be able to secure the funding you need. There are also a number of alternative finance options available, such as peer-to-peer lending and crowdfunding. These can be useful if you struggle to secure traditional funding. So, don’t give up if you have a bad credit score – there are still options available to you.

What is a Bad Credit Business Loan?

A bad credit business loan is a type of financing that is specifically designed for businesses with poor credit. While traditional lenders typically require good credit in order to qualify for a loan, bad credit business loans are available from a number of alternative lenders. These loans often come with higher interest rates and shorter repayment terms, but they can be a valuable source of funding for businesses that have been turned down by traditional lenders.

Whilst a poor credit rating can make it more difficult to obtain finance from traditional sources such as banks, there are a number of business finance providers who are willing to lend to businesses with bad credit. These lenders will often take into account a range of factors when considering an application, such as the size of the loan required, the purpose of the loan and the repayment history of the business.

In some cases, a business with a bad credit rating may be required to provide security for the loan, such as property or equipment. However, there are also a number of unsecured finance options available for businesses with bad credit, such as merchant cash advances and invoice finance. Depending on your circumstances, it may still be possible to obtain funding from business finance providers even if you have a bad credit rating.

In addition, bad credit business loans can help businesses to rebuild their credit scores, making it easier to qualify for more favourable financing in the future.

Finance providers will also look into the following factors:

Business County Court Judgements – While a CCJ can be a major blot on your business’s record, it’s important to remember that it’s not the end of the world. There are plenty of lenders out there who are willing to work with businesses that have CCJs, and you may well be surprised at the positive outcome of your application.

Of course, lenders will look at the number of CCJs you have received and the frequency with which they have been issued, but don’t let this put you off from applying. With a little bit of research, you should be able to find a lender who is willing to work with you and provide the funding you need, despite your CCJ history.

Winding-up Order – Lender will also check if your company has been served with a Winding-Up Order. The court appointed Official Receivers will take control of your company and start to liquidate all your assets in order to repay creditors. However, this does not mean that you will not be able to access funding in the future. Many companies have Winding-Up Orders on their file and are still able to successfully apply for funding. So, if you have a Winding-Up Order on your file, don’t let it stop you from applying for funding. You may still be able to successfully secure the financing you need.

UK businesses are under more pressure than ever to maintain a strong cash flow and grow their operations. For many businesses, traditional forms of funding such as bank loans are no longer an option. As a result, online business loans have become an increasingly popular way to obtain funding. Online business loans give businesses a cash-flow injection which stimulates growth.

They also offer a number of other benefits, including flexible repayment terms and fast approval times. In addition, there are a number of UK government schemes or grants that can provide funding for your business. However, applying for these can be a timely affair with lots of administrative paperwork to process and certain criteria to be met.

If you have a bad credit score, our advice would be talk to a financial specialist. For personal debt advice, you can visit the Money Helper website. For specialist business debt advice, you can check out Business Debtline.

What is the minimum credit score for a business loan?

The minimum credit score for a business loan is dependent on a lender by lender basis and the type of loan product you apply for. Every lender has their own requirements and there are different underwriting techniques that help bad credit loan providers see the bigger picture of your business.

Whilst banks and credit unions typically require minimum credit scores of 700, online lenders are able to offer far fewer credit requirements, making it easier to access finance via alternative finance providers. However, it’s important to remember that just because a lender is willing to offer you a loan with bad credit, it doesn’t mean that this is always the best option for your business. Be sure to do your research and compare loan products before making a final decision.

What type of business finance can I get if I have a bad credit rating?

There are a number different types of business finance open to businesses with a bad credit rating, including merchant cash advances, secured or unsecured business loans, or asset finance. However, business finance can be tailored to suit your specific business needs. For example, if you have a bad credit score, you may be able to get a secured loan which uses an asset as collateral.

This means that if you default on the loan, the lender can take possession of the asset. Alternatively, if you have a good credit score, you may be able to get an unsecured loan which doesn’t require any collateral. Whichever type of business loan you choose, it’s important to compare different offers and make sure that you understand the terms and conditions before signing any contract.

Merchant Cash Advance

A merchant cash advance is a type of funding that allows businesses to borrow money based on their future credit card sales. The lender provides the funds upfront and in return, the business agrees to repay the loan with a percentage of their future credit card sales. Merchant cash advances can be a quick and easy way to get funding, but they also come with some risks. The biggest risk is that the borrower may not be able to repay the loan if their credit card sales do not meet expectations.

This can lead to the lender taking possession of the business’s credit card receivables, which can damage the business’s relationships with its customers. Another risk is that merchant cash advances can be expensive, with APRs that can reach into the double digits. For these reasons, it is important for businesses to carefully consider whether a merchant cash advance is right for them before signing on the dotted line.

Read more: Do Merchant Cash Advances need a credit check?

Secured Business Loan

Secured business loans are a type of loan in which the borrower offers an asset, such as a piece of property, as collateral. This provides the lender with security in case the borrower is unable to repay the loan. Secured business loans typically have lower interest rates than unsecured loans, making them an attractive option for businesses looking to finance their operations or expand their facilities.

However, it is important to remember that if you default on a secured loan, the lender may be able to seize your collateral. As such, it is important to carefully consider whether you will be able to repay a secured loan before signing on the dotted line.

Unsecured Business Loan

An unsecured business loan is a type of financing that does not require collateral. This can be a good option for business owners who do not have the assets to pledge as collateral or who would prefer not to use their personal assets as collateral. Unsecured business loans often have higher interest rates than secured loans because they are riskier for lenders. However, they can be a good option for business owners who need funding but do not want to put up their personal assets as collateral. When considering an unsecured business loan, it is important to compare offers from multiple lenders to get the best rate and terms.

Asset Finance

Asset finance is a type of financing that allows businesses to purchase equipment, vehicles, or other assets and spread the cost of the purchase over time. This type of financing can be useful for businesses that need to upgrade their equipment but may not have the cash on hand to make a large purchase all at once.Asset finance can also be used to fund the purchase of new vehicles, such as cars, trucks, or vans. This type of financing can be beneficial for businesses that require new vehicles but do not want to tie up all of their cash in one purchase.

There are several different types of asset finance, including leasing, hire purchase, and chattel mortgage. Each type of asset finance has its own advantages and disadvantages, so it is important to choose the option that best suits your business needs. Asset finance can be a flexible and convenient way to finance the purchase of essential equipment or vehicles for your business.

Invoice Finance

Invoice finance is a type of funding that allows businesses to borrow money against outstanding invoices. This can be a helpful way for businesses to access working capital, as it does not require collateral and can be obtained relatively quickly. Invoice finance can take two main forms: invoice factoring and invoice discounting. With invoice factoring, the business sells its invoices to a third-party company at a discount. The company then collects payment from the customer and gives the business the remainder of the funds, minus a fee.

Turnover Loan

A turnover loan is a type of business loan that is used to finance the costs associated with a business’s inventory, such as purchasing raw materials or finished goods. The loan is typically structured as a line of credit, which means that the business can borrow up to a certain amount and repay the loan over time. The interest rate on a turnover loan is usually higher than the interest rate on a traditional business loan, but the terms are typically shorter, which can make the overall cost of the loan less expensive. Turnover loans can be a useful tool for businesses that need to quickly free up cash to take advantage of opportunities or meet short-term goals.

Can I get a business start up loan with bad credit?

You can get a startup business loan with bad credit, they maybe difficult to obtain but we have lenders that may support your business idea. Lenders that offer loans to businesses with bad credit tend to charge high interest rates to mitigate their risky lending profiles. As a result, your startup will need to be generating steady income before you’ll be able to qualify for one of these loans.

In addition, you’ll typically be asked to sign a personal guarantee, which puts your personal assets at risk if you default on the loan. All things considered, it’s generally easier to secure small business loans for bad credit if your company has been trading for 3 – 5 years or more. At this point, your business is more established and has demonstrated its ability to overcome the initial challenges that all startups face.

The benefits of alternative finance providers

The benefits of an alternative finance provider if you have poor or bad credit over traditional funding lines means it is possible to get a business loan if you have a bad credit rating, but alternative finance means:

• Tailor-made loans to suit the needs of your business.
• Fast, flexible and affordable, short-term repayment times means no long term payments required
• Speed of an applications once agreed means that the funds are provided swiftly, normally within a matter of days.
• No footprint on your credit report, leaving you free to seek other funding opportunities.
• Paperless – as there is no need to provide business plans or complex financial records.
• This type of business finance are transparent  and there is no unexpected fees.

Does my business qualify for a bad credit business loan?

If you need a business loan but have a poor credit score, you may still be able to qualify for funding by meeting certain criteria. Your business must be registered in the UK, and you must be able to show at least two years’ worth of trading history. Depending on the type of finance you are applying for, you may also need to demonstrate solid growth or offer an asset as security against the loan.

However, it is important to remember that bad credit business loans often come with higher interest rates and less favourable repayment terms. As a result, it is essential to shop around and compare different lenders before agreeing to any loan.

Do I need to provide security or a guarantee?

When applying for a business loan, you may need to provide security or a guarantee. This means that the lender can take possession of the asset if you fail to repay the loan. The type of asset that can be used as security depends on the type of loan you are applying for.

For example, a car loan may require you to use your car as security, while a home loan may require you to use your house as security. If you are unable to provide security or a guarantee, you may still be able to apply for a business loan, but the interest rate will likely be higher.

Are business finance providers regulated by the FCA?

Not all business finance providers are regulated by the Financial Conduct Authority (FCA). That means you should do your research to ensure that you are getting the safest and best financing possible for you. Many business finance lenders are regulated by the FCA.All of the lenders we work with adhere to best financial industry practices and many of are regulated by the FCA.

They may also be members of trade associations such as the National Association of Commercial Finance Brokers (NACFB). This gives you peace of mind that you’re working with a reputable and reliable business finance provider. You can check whether a business is regulated by the FCA on their website. If you’re not sure, please get in touch and we’ll be happy to help.

How do I get a business loan with bad credit?

To get a business loan with bad credit, we are happy to assist you, to get a bad credit business loan, simply follow these simple steps:

• 1. Carry out a quick check of your  business’s credit score and its current financial status.
• 2. Ensure there are no outstanding debts, in order to decide if your business can afford to borrow at this time.
• 3. Carry out research of your financial options to get an feel of what’s available for your business.
• 4. Complete our easy online application below, we will ask for details about your business and funding requirements.
• 5. We will contact you with  funding quotes that are tailored to your business’s credit situation.

Frequently asked questions

Can you get business loans with bad credit

A person or business with bad credit will find it harder to be approved for a loan. Those seeking business loans for poor credit may only be offered credit at high interest rates, reflecting the greater risk they represent to the lender. Bad credit can be improved gradually by paying off old debt and managing new debt responsibly.

How to get business loan with bad credit

You can apply online for a business loan with bad credit via our online application process. You will need to complete a quick online application to provide some basic information about yourself and about your business.

What are the costs of bad credit business loans?

The interest rates on bad credit loans are higher than for other types of loans, due to the higher risk they present. There may also be fees charged for early repayment and late payment penalties. This is less the case for credit unions. The amount of interest credit unions can charge on their loans is three per cent per month (one per cent in Northern Ireland) or 42.6 per cent APR.

Get business funding with bad credit from PDQ Funding

we believe that the finance options available to your business should extend beyond traditional business loans. Your credit history shouldn’t have to be the be all and end all when it comes to getting finance, which is why we care about your business performance, not just your credit history.

Can we get a merchant cash advance with bad credit

Yes we offer merchant cash advances to businesses who have bad credit, we look at your ability to make repayments not your personal credit score or financial history.

 

Apply for business funding with bad credit

We’re here to help in your search in the competitive markets of business finance in the UK and give our advice as a trusted lender. Our bad credit small business loans are packed with many advantages which can act as a complete financial saviour to business owners.

The loan application process for your business is so easy to get started, follow these simple steps to start to grow your business:

Step 1:

Applications can be processed online by clicking on “Get a Quick Quote”. The following information will be required:

• The registered name of your Limited Company or trading name
• Company registration number
• Registered office address
• Your businesses monthly turnover
• Loan amount, how much is required to borrow

Step 2:

The next step will be a request for some personal details, including:

• Full name
• Your contact number
• Email address so we can send you out terms and conditions

Step 3:

You will need to agree to the terms and conditions.

Step 4:

We will review the application and assign an account manager to your application. If it is approved, we will let you know within 24 hours.

Step 5:

Both parties need to sign the agreement before the loan can be paid out. Our turnaround of completion usually takes between 2 – 5 days from recipe of application form.