What is bad credit?

A bad business credit score is when your business is seen as unable to repay debt in full or on time. When banks, lenders and suppliers look at your credit, they’ll see a score based on your previous history of payment performance - the amount, frequency and speed of paying back funds. 

With a low credit score, your business is likely to be seen as risky to lend or borrow to - impacting areas including your supplier terms as well as your access to funding. 

Although you may find it harder to get finance through high street banks, we can help to match your credit and business with lenders who specialise in bad credit business loans.

What to avoid if you have bad credit

If your business currently has a low credit score, try the following to reduce any harm to your rating:

  • Pay old and existing debt off on time
  • Work out payment plans that work for your business
  • Avoid applying to lots of lenders individually 
  • Make sure no County Court Judgements (CCJs) are held against your business 
  • File your accounts on time and accurately 

Can I get a loan with a low credit score?

Yes. Even if your credit score is looking lower than you expected, there are likely still options available to help your business. Whether you’re looking for a short-term loan to cover an unexpected bill or needing a cash injection to cover a large fulfilled order - we’re here to help. 

All our finance options are designed with business owners like you in mind. We’ve got different options for when you need cash fast - all guaranteed to suit the size of your business and your credit score.

Match with finance in as little as 24 hours. Check the loans available for low credit scores, or connect with our team of funding specialists to help you get a plan in place.

What do lenders look for?

Business finance lenders often have different underwriting techniques, but all will be looking and investigating a wide range of factors to help give them an overall picture of your business. This includes looking at:

  • Business sales, annual turnover and profit
  • Years of accounts filed 
  • Number of years of accounts filed
  • Past payment performance 
  • County Court Judgements 
  • Winding-up orders 
  • Reviews and testimonials

By focusing on this wide range of factors, it means that businesses are much more likely to be approved for funding compared to when lenders simply look at credit history and credit score to assess risk.

If you have a bad credit score, there is a range of business loans that you can apply to

Types of loans for businesses with bad credit

Asset finance

Business loans against high-value assets

Invoice finance

Selling invoices to lenders to free-up cash


Just because you've had problems with credit in the past doesn't mean that the door is completely shut when it comes to sourcing finance for your business in the future.

Although you may find it harder to get finance through high street banks and building societies, Capitalise can help to match your credit history and business type with lenders who specialise in bad credit business loans.

Whether you're a startup looking to raise capital to launch your new venture or are simply looking to plug a cash flow gap in your existing business, there are plenty of alternative and independent lending streams available.


The short answer is yes, it’s still possible to access small business loans with bad credit. 

In truth, you may find it harder to get finance through high street banks and building societies. The good news is that there are plenty of lenders out there who specialise in business loans for bad credit. Independent lenders, for example, tend to be more flexible when assessing your application for funding. They look beyond just your credit profile at things like your projected revenue, business plan and previous business successes. 

If you’re a startup, your ‘bad’ credit profile likely comes from not having a long credit history – rather than having had problems with credit in the past. Without a revenue history to support your business loan application, you’ll need to show accurate projections to prove that you’ll be able to keep up with repayments. Another way to strengthen your application is to supply a thorough and up-to-date business plan.

You might have heard business loans referred to as ‘secured’ or ‘unsecured’ in the past. Business loans for bad credit will almost always be secured. What this means is that your business loan is backed by something valuable, your business assets or premises for example. Put simply, you agree to give the lender those assets or premises in the unlikely event that you can’t repay the loan.

If you have bad credit and you’re looking for a loan specifically to buy a piece of machinery, vehicle or even computer equipment, it could be worth considering asset finance. This is a funding option where a lender will essentially purchase the asset on your behalf. Then you’ll spread the cost over affordable monthly repayments. Or you can simply lease the asset for as long as you need it. 

Start by finding out what factors are having a negative impact on your credit profile. Are they things you can control? This is a great conversation to have with your accountant. They can help you unpack the contributing factors and put a plan in place for how to start improving your bad credit profile. They may suggest:

  • Working on your payment performance – paying bills and suppliers on time and in full is critical
  • Consolidating your debt – having several funding facilities with different lenders can harm your credit 
  • Checking whether your business is filed under the correct Companies House SIC code – and correct it if it isn’t
  • Being consistent in the way you file your accounts – always in full, on time and in the same month
  • Avoiding County Court Judgements – and resolving any that are currently outstanding

Keep in mind that making these changes will have a positive, but gradual, impact on your credit profile. You may have to wait a while to see meaningful improvement. If you’re looking for funding, the good news is that you might still be able to access small business loans with bad credit. In fact, some independent lenders specialise in business loans for bad credit by taking a more flexible and understanding approach. Make sure you provide evidence of previous business success, projected revenue and a thorough business plan to support your application. 

If a bad credit profile is holding your business back, it might be worth considering Credit Improvement. This is a service you can use to increase your business credit score. A Credit Improvement company will take a look at your credit profile and let you know what level of improvement is possible upfront. Find out from the outset whether you’ll be charged a fee regardless of the result or whether they offer a no-win-no-fee service.

If you’re looking to improve bad credit, there are a number of options available. Simply understanding what goes into your credit profile is the first step to improving it. When you identify the factors that are having a negative impact, you can face them head on. 

A big part of your credit profile is your business credit score. If yours is low, then that’s a great place to start. The exact factors impacting your score will be specific to your business but here are some general strategies to try:

  • Pay your bills and suppliers on time
  • If you have several funding facilities with a few different lenders, try to consolidate them into one manageable loan from a single lender
  • Check whether your business is filed under the correct Companies House SIC code
  • File your full accounts with Companies House, on time and in the same month every year
  • Make sure your business and its directors stay solvent, avoid County Court Judgements and resolve any that are currently outstanding

Of course, some aspects of your credit profile are out of your control – the age of your business for example. Others, while still tricky to change, might have a little more wiggle room. You may not be able to help the years of experience your directors have under their belts but you can look at steadily appointing new directors over time. This shows healthy growth in your business. Simply making sure that your director information is complete and up to date will have a positive impact on your profile. 

It’s important to remember that your credit profile was built over a long period of time, so these strategies will have a gradual, rather than immediate, effect. If improving your credit profile is fairly urgent, perhaps because bad credit is holding your business back, you may be better off speaking to a Credit Improvement specialist. Credit Improvement specialists will work directly with the main credit rating agencies to improve your business credit score. Often the service doesn’t carry any fees unless the process is successful. If you’re unsure, speak to your accountant who may be able to connect you with a specialist or begin the process on your behalf.

There are several factors that go into your business credit profile. The one you might be most familiar with is your business credit score. Our credit agency partner, Experian, uses the Commercial Delphi Score from 0 (the highest risk) to 100 (the lowest risk). 

Other factors that go into your credit profile include your annual accounts filed with Companies House as well as general information on your annual confirmation statement. Your credit profile will also take into account public information about your board of directors and a review of their past and present business activities. Public records such as any legal notices registered against your business will also be factored in as well as your payment performance.

Of course the goal is to have a good business credit profile but things don’t always go to plan. There are things you can do to improve a bad credit profile, from small changes like building healthy habits to working with a credit improvement agency. It’s also important to remember that there are lenders out there that have specifically designed business loans for bad credit, so funding your ambitions is still possible.

When a lender is assessing your application, essentially they’re trying to determine whether or not your business would be able to pay back any money you borrow. In other words, how much of a risk is it to offer your business a loan?

One of the key things that lenders look at to make their decision is your business credit score. The higher your score, the more likely it is that your business can keep up with the repayments on a loan. A lender will feel more comfortable offering your business a loan if they believe the risk of you not paying it back is relatively low.

Your business credit score is one part of a wider credit profile that lenders will take into account. Some of the factors they’ll be looking out for in your credit profile include your consistently filed annual accounts, good payment performance and no outstanding County Court Judgements.

Lenders will also look at the age of your business. A trading history of two years or more gives a lender a good sense of your ability to repay any money they lend to your business. They’ll also be interested in the sector your business operates in because some are considered lower risk than others.

When you apply for a business loan, a lender will want to know about any other debt or credit facilities that your business already has. That’s not to say that you can’t get a  business loan if you already have another kind of funding. But a lender will consider whether or not your business can afford to take on more debt.

You can improve your chances of being approved for a business loan by taking the time to provide a well thought out application. A detailed business plan, for example, that clearly shows how you’ll use the loan can go a long way to strengthening your application. Especially if you have a young business with a shorter track record to rely on.

Applying for a business loan can feel overwhelming and you want to make sure that you get things right. It can be helpful to lean on your accountant to support you during the process, to answer questions and provide sound advice. Depending on the firm your business works with, your accountant may even be able to apply on your behalf. There’s no harm in asking!

It’s understandable that owners might worry about being able to access small business loans with bad credit. But understanding the factors that go into a so-called bad credit profile is the first step to improving your credit.

A low business credit score will have a negative impact on your business credit profile. The higher your credit score, the less of a risk lenders will see it to offer you a business loan. For example, a score of 2 to 15 is considered very high risk while 81 to 90 is seen as very low risk. 

Filing your annual accounts late or inconsistently contributes to a bad credit profile, as does a weak balance sheet and having more debt than equity. Credit agencies will also consider the age, industry and location of your business as well as your annual confirmation statement. Other factors that contribute to a bad credit profile include registered Gazette notices or County Court Judgements against your business as well as poor payment performance.

Having an inexperienced board of directors can negatively affect your business credit profile. Their past and present business activities might also be contributing factors. Simply making sure your director information is complete and uptodate can actually help your business avoid a bad credit profile.

Yes, it’s still possible to get a business credit card with bad credit. In-fact, credit cards are a great solution for businesses with low credit scores. They can help you:

Build your business credit history when you pay on time every month 
Cover short-term cashflow issues 
Separate your business and personal spending 
Get rewards and perks from your provider 

Yet, it’s no secret that when applying for a business credit card with a low credit score, you may find your options are more limited than businesses with a good credit score. That’s why we work with Capital on Tap, who look at your business and credit history for eligibility and let you know in an instant if they can offer you a credit card loan. 

To make the process easier, faster and help your business get the funds it needs.